With an eye on this potential, some companies are already preparing themselves. Susquehanna International, for example, is setting up a sports betting division in Ireland. The unit, named Nellie Analytics - in honor of co-founder Jeff Yass's dog - already has 20 employees.
Susquehanna operates on the Betfair and Matchbook online sports betting exchanges. On these sites, people can bet against each other, instead of trading against a bookmaker who sets the parameters.
Sports betting, however, should not attract most of the so-called hedge funds, giants that make high-risk investments in search of high returns. That is because the market is still relatively small, and bets from big houses like these could easily distort it.
An alternative way for financial companies to operate in the universe of betting is the provision of technology. Nasdaq Inc., which controls the electronic exchange of the same name, already operates in this segment.
In the UK, it has licensed a technology to a football betting service called the Football Index - a virtual market where users buy and sell stakes in players and earn dividends based on their performance. Nasdaq technology is also used for betting on horse racing in Australia, Hong Kong and Sweden.
"A betting company does not need to reinvent the wheel," said Scott Schechtman, Director of New Markets at Nasdaq.
Chris Grove, of Eilers & Krejcik, believes that, despite facing complex regulation, companies in the financial sector should rather explore the new market.
Source: O Globo
