CMC 002 - Jason Trost, Smarkets Founder and CEO
Prediction Market Fragmentation & Consolidation, Smarkets CEO Interview, and Is Prediction Market the Right Term?
00:00 | Intro
01:45 | PM Fragmentation & Consolidation
With an ever-increasing number of prediction markets, Andrew and Clay discuss the effects user fragmentation has on trading and liquidity. We also forecast our expectations for consolidation in both the real-money (USD) and crypto-related markets.
12:20 | Interview w/ Jason Trost, Smarkets CEO & Founder
What was the origins of Smarkets? Was the expansion into non-sports betting markets always in the cards? What challenges has that expansion brought for UI and UX design? How does Jason view his platform relative to the sports-betting and prediction-market competition? How does he see the space evolving? We discuss.
45:00 | Is Prediction Market the Right Term?
Following our interview with Jason, we ponder his final thought that prediction market is not the best term for these markets. Is he right? What’s a better alternative?
🎧 The second episode of the Crowd Money Cast is out! Every month, Global Guessing co-founders Clay and Andrew chat with interesting thinkers, leaders, bettors, and entrepreneurs in the prediction market space to explore markets, strategies, and news. This month we were lucky enough to sit down with the founder and CEO of London-based betting exchange and prediction market Smarkets, Jason Trost (rhymes with 'most').
Jason cut his teeth in the world of financial services, where he worked as an equities trader at UBS. He also happened to be an early adopter of prediction markets, focusing on sports and operating on the now-defunct Tradesports platform.
While working at UBS Jason noticed a disconnect, and an opportunity: the technical infrastructure available for equities traders to inform their investing decisions did not exist for prediction markets. And so Smarkets was born.
Since the company's launch in 2007, Smarkets has grown into one the premier prediction market platforms on the web. Unlike other prediction markets platforms which have shied away from athletic competition, Smarkets' core offering, its sports market coverage, has grown the company's competitive universe massively to include names like Betfair and FanDuel. In fact, today, Smarkets' sports markets trade volume has amounted to roughly $15 million per day!
And Smarkets’ success has not gone unnoticed. The company has been mentioned by news outlets such as The Hill, Yahoo Finance, and Bloomberg, and raised a Series B round in June led by Susquehanna Growth Equity to accelerate the company’s expansion into the United States. The firm is known for its activity in marketplace investing, with CreditKarma, Fundera, and 10-4 Systems as some of its past exits. With Jason’s leadership and this new injection of capital, Smarkets is certainly primed for future success and growth across the pond and here in the states.
In this month’s episode Jason dives deep on the inception of Smarkets, providing candid consideration of the platform's development to date, and potential areas for future improvement. He also shares his thoughts on the growth of the prediction market space and where Smarkets fits in the ecosystem. In the episode we also chat with Jason about the complicated and diverse nomenclature in prediction markets, and offer our own suggestions for solutions to this issue.
Before the interview with Jason, Clay and Andrew discuss their macro views on prediction markets. The prediction market industry is extremely fragmented, with new market platforms launching beta programs seemingly each month. And like as have observed in other industries in the past, industry consolidation is likely inevitable. We explore (and predict!) what this consolidation will look like and when it will happen, in addition to the impact of these dynamics on prediction markets then and now.