Smarkets CEO and founder Jason Trost recently joined Gambling Insider for an exclusive interview for the Sports Betting Focus of Gambling Insider's May/June magazine.
In that issue, available online and in print in mid-May, Trost talks through the sports betting company's journey, as well as the concept of exchanges and sportsbooks as a whole.
Below, however, you can see part one of the interview, as Trost addresses Smarkets' recent Grand National performance, horseracing in general, as well as his views on esports betting.
You broke records during the Grand National, as did other companies. How would you describe the state of horseracing at the moment?
Obviously it’s a sport that’s in slow decline, there’s no question about that. As demographics change, horseracing hasn’t done enough to appeal to younger generations – I don’t think that’s a secret to anybody. From a sports betting venue, it’s a very big part of our business. One of the reasons it’s so big is horseracing pricing among bookmakers is so bad. So we have a lot of product differentiation in terms of price and experience, whether people want to use SBK (the Smarkets sportsbook) or Smarkets (its exchange). It’s a significant part of our business. We view ourselves as an event trading company – and horseracing is something a lot of people still want to participate in. As long as they do, we’ll have markets for it. But I do think horseracing as a sport needs to take a look in the mirror and think about the next 10-20 years. It definitely needs to evolve if it wants to stay relevant over the next two decades.
How much of a boost to handle was the fact there was no National last year?
I think maybe a little bit but in general it’s such a big part of the UK culture. I don’t think the pent-up demand has changed that much.
Sure, so you think the numbers would have been similarly high anyway?
I’m sure fewer people are going to be at the pub and you have more of a captive audience. But in general the National has always been a big cultural event in the UK.
Did you take bets on the Virtual Grand National?
I can get why people want to bet on those but usually, no, we don’t touch those markets. I think we actually did take bets on the Virtual National just for the novelty but in general we don’t.
Now that the actual Grand National is back, how much of a backseat have the alternatives of esports and virtuals – that were so popular during the pandemic – taken?
They’ve definitely taken a back seat but not because we’ve given them a back seat. There’s been a lot of hype around esports – I think esports as a participating sport and spectator sport is definitely increasing. But I think it’s going to be a long time before esports betting is close to traditional sports betting. It’s just not the pattern for the esports viewer to bet on sport. A good example is rugby is huge in the UK but nobody bets on rugby. For whatever reason, it’s just not a betting sport. And the opposite is true for football and horseracing. People love betting on football, it’s just such a part of the sport. Whereas betting on rugby is not part of the sport. The betting culture of the sport is very important to the volume.
Do you ever see esports betting surpassing traditional sports betting? I’m going to guess no from your previous answer.
Probably not; it wouldn’t surprise me if it did but if I had to put my opinion on the record I’d say no. Do I think esports will be bigger than traditional sports? I think in some cases it will definitely be yes. But from a betting perspective, no.