Nasdaq cashes in on digitized sports betting
When you think of Nasdaq, chances are you think of the U.S.-based stock exchange. However, the company has numerous other lines of business, none more interesting than their foray into sports betting.
Why it matters: In addition to operating its own stock exchange in New York, Nasdaq is a technology provider for other global marketplaces. One of its core customers: sports betting operators.
- "We've partnered with two of the world's leaders in horse racing to dramatically change what they do in terms of a product offering," Scott Shechtman, Nasdaq's head of New Markets, told me.
Buzz: One of those customers is the Hong Kong Jockey Club, which sees 50% more money wagered on horse racing each year than the entire U.S. (and Hong Kong has just 7.8 million people).
- The Jockey Club is such a massive business that 8% of the Hong Kong government's revenue comes from the taxes that it pays.
The backdrop: The rise of in-play betting (ability to place bets after events have started) has taken the systems that were built for the retail or very early online eras, and it has completely overwhelmed them. Everything has been digitized and, in the process, sped up.
- "As an operator, you increasingly need more data and you need it fast, you need bets to run through your system quickly and you need to be able to handle peak times. Well, guess what? That sounds a whole lot like a stock exchange," said Schectman.
- "So we took this technology called Longitude that was born in the financial markets and had its heritage in trading, and we re-engineered it to work for sports betting because it was based on similar principles."
Don't forget: Just like stock markets must police themselves to prevent manipulative trading or anything else nefarious, sports betting operators have those same challenges. Nasdaq's technology helps monitor all of that, too.
The bottom line: The same changes that have happened to the financial markets over the past few decades are happening to the sports betting markets, too, making Nasdaq an ideal partner for sports books around the globe.
Go deeper: Each day this week, Axios Sports will highlight a sports-related company that's worth knowing more about.