Sunday, Aug. 9, 2015 | 2 a.m.
This scenario plays out frequently for sports handicappers wagering on futures bets in Nevada: Betting odds for the New York Giants to win the Super Bowl are listed at 40-1 in the preseason, but they lose their initial two games and don’t appear to have a championship-contending team. Because futures bets on championships are available all season, oddsmakers adjust their line to 100-1 with hopes of enticing bettors who think it’s not too late for the Giants to turn around their season.
You bite and make a bet.
Then, the Giants win three consecutive games. Oddsmakers respond again and lower the odds to 25-1, making your 100-1 ticket valuable. If the Giants win the title, you would receive a better payout at $100 back for each $1 wagered than casinos offered at 25-1.
In that gap, there is value — and a business idea.
PropSwap, launched Aug. 1 by Ian Epstein and Luke Pergande, facilitates the buying and selling of active bets with an online marketplace.
Bettors interested in selling a ticket while it’s valuable, and thereby guaranteeing a profit regardless of who wins, can find a buyer through PropSwap. PropSwap receives 10 percent commission on the sale — if a $100 ticket sells for $400, PropSwap gets $40.
“If you are a sharp bettor, you can win off inefficiencies in the markets,” Pergande said. “What you look like in Week 2 is who you are. But in the sports books and the public’s opinion, people overreact. And when people overreact, that means there’s volatility. And when there’s volatility, that’s when you can make money.”
Epstein and Pergande, University of Arizona graduates with backgrounds in gaming and finance, describe the service as a win-win because buyers can purchase better odds than available at Nevada sports books and sellers can turn a profit without winning.
PropSwap positions itself as a brokerage firm, similar to ticket-broker StubHub, and doesn’t have a gaming license. Epstein said a PropSwap lawyer met with Nevada Gaming Control Board officials and determined that, since the company does not engage in gaming, it operates outside the control board’s jurisdiction.
“PropSwap is not buying bets from people,” Epstein said. “We’re just the middle man.”
Pergande compared his company to Craigslist in that sellers post property on the site, but the site never owns the listed item.
Here’s how PropSwap works: All transactions must be done in person at the PropSwap terminal, which is open evenings Monday, Thursday and Friday and all day Saturday and Sunday inside the Sporting Life Bar near South Jones Boulevard and Robindale Road. The ticket holder determines the selling price and gives PropSwap permission with a signed waiver to list the ticket online at propswap.vegas. Tickets that don’t sell revert back to the original owner.
The seller agreement allows PropSwap to verify the ticket’s authenticity, take possession — not ownership — of the wager and store it securely. If the gaming establishment issuing the ticket doesn’t honor the buyer claim on it, the PropSwap agreement dictates the seller must cash the ticket on behalf of the buyer.
The concept of a marketplace for sports betting isn’t new for gamblers, who previously hedged future bets to turn a profit. For instance, a $50 wager at 100-1 on the Giants to win the Super Bowl is in line to win $5,000. If the Giants were to reach the Super Bowl, the gambler then could make a wager on the other side to guarantee a profit.
“We talk about the concept of hedging or locking a profit,” said Ted Sevransky, a veteran Las Vegas handicapper known as “Teddy Covers.” “This turns that concept into a reality.”
Epstein and Pergande believe they are the only business with an organized space for selling and buying sports bets, serving a market they are confident already exists.
Even so, Nick Bogdanovich, director of trading for William Hill, said it can be difficult to accurately price a live ticket.
“It’s a huge undertaking,” Bogdanovich said. “If you have the Royals 20-to-1 to win the World Series, what is your ticket worth right now? It is a very complex formula to figure it out.”
Pricing is something PropSwap plans to leave to its sellers, although Epstein, who worked at Cantor Gaming for three years, said PropSwap would offer advice to sellers. He also said sellers could adjust the price of bets, which are locked for buying during games, as they are likely to increase or decrease in value.
If the marketplace takes off, Epstein predicts it could cause people to make more bets and perhaps riskier ones, knowing they could sell them. It’s an idea the friends spent two years working on.
“We want to live in a world where you can get something back for your bet,” Epstein said.