Paddy Power-backed ASX to cater to Football Index consumers
Sports trading start-up highlights demand for similar product with correct operating model but acknowledges potential “trust issues”
Paddy Power-backed sports trading start-up American SportZ Exchange (ASX) has said it will look to impress upon former Football Index (FI) traders as it looks to scale up the business.
Discussing the start-up’s objectives, Paddy Power highlighted a partner-first strategy, which he suggested would be used to drive scale quickly in the highly competitive US market via agreements with local partners.
Power also suggested this strategy would be used as the Irish firm drives into the UK, where Football Index popularised the sports trading model before its collapse earlier this year.
“We call it our Atlantic strategy and we see it as a UK/US strategy,” Power explained.
“In the UK, we’ve seen through Football Index that there is huge opportunity there, a proven demand for this type of product, a lot of disappointed customers who could potentially become customers of ours and also an ecosystem of affiliate marketeers, things like that which we can tap into.
“That is our plan and it is a two-pronged approach,” he added.
ASX operates as a virtual stock market for US-focused sports teams and players where users generate income by speculating on the real-life performance of these athletes and their respective franchises.
ASX then takes a small commission on trades placed on the platform, a model similar to that used by Betfair and Football Index, which collapsed into administration in March, wiping out consumer funds in excess of £90m in the process.
ASX is currently readying a substantive US push having secured €1m (£858,000) in funding from investors in two highly popular and oversubscribed funding rounds on Irish-crowdfunding website Spark.
Power, for his part, has invested €50k of his own money into the firm.
Discussing the differences between ASX and Football Index, Power cited Football Index’s “flawed” operating model, suggesting the differences between the two would allow ASX to succeed where Football Index had failed.
“In very simple terms, it’s hugely different,” Power explained.
“Football Index had an infinite number of shares, therefore their shares ultimately were valueless, and that was the main reason for their demise. Their modelling was wrong, ours isn’t, so it’s very different.
“But the opportunity there is that lots of people played Football Index and there’s lots of people out there with an interest in that.
“There will be a trust thing. it’ll be a trust issue that we’ll have to basically work around and solve and I’m confident we can do that. When the time is right and it’s appropriate, and it could even be this summer before the season kicks off, we’ll be tapping into that,” he added.
Power referenced a demand for these types of products in the UK and the US.
“It’s like fantasy sports, it’s such a fast-growing product in the US and the big fantasy sports players, DraftKings and FanDuel, have pivoted into sports betting and are trying to convert those fantasy players into sports bettors,” he explained.
“The fact that there’s such a big demand for that shows that a fusion of the two is the sweet spot,” Power added.