Novig got approval from the CFTC to launch a peer-to-peer sports trading platform. The innovation here is that users no longer lose money to a professional bookmaker with decades of actuarial data. They lose it to some guy named Derek who thinks he cracked the code on NBA player props because he listens to three podcasts.
This is being called democratization. Removing the house from sports betting means retail traders can finally achieve their dream of getting fleeced by other retail traders instead of licensed professionals. Progress looks like watching two people who don't understand implied probability take opposite sides of the same bet and both somehow lose money to platform fees.
The CFTC signed off on this. The same agency that regulates actual commodity futures decided that letting amateur bettors create their own markets on whether Steph Curry hits the over is a reasonable use of derivative infrastructure. Somewhere a corn farmer is filling out his tenth compliance form this month while a college sophomore sets the line on a Tuesday night Pelicans game.
Competition is intensifying in sports prediction markets, which is corporate speak for six different platforms racing to see who can convert sports knowledge into bankruptcy filings most efficiently. Peer-to-peer trading removes the evil middleman and replaces him with a slightly dumber middleman who just got his tax refund and thinks parlays are a retirement strategy.
Novig believes users want to trade directly against one another. They are correct. People absolutely want this. The same way people want to represent themselves in court and cut their own hair and debug their own code. Confidence has never required competence, and now it doesn't even require a counterparty who knows what they're doing.
The platform launches soon. Two idiots enter, two idiots leave, one has less money, the other has slightly less money after fees, and both tell their friends they're up on the year.
Photo by Girish Dalvi on Unsplash
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