In 2018, the United States Supreme Court overturned the Professional and Amateur Sports Participation Act of 1992 that had effectively served as a federal ban on sports betting. Since that time, the sports betting market has flourished with rapid growth and millions of dollars of new investments.
In March 2021, Goldman Sachs predicted the online sports betting industry would grow from no revenue in 2018 to $40 billion in revenue by 2033. Sharp Alpha Advisors is at the forefront of new developments in the sports betting industry and its Sharp Alpha Fund has now become the first $10 million startup fund in the world of sports betting.
Sharp Alpha Fund
Lloyd Danzig is a former fixed-income trader and data scientist who got his undergraduate degree in economics at the University of Pennsylvania and his graduate degree in computer science at Columbia University. In 2019, Danzig saw the massive opportunity in sports betting and launched Sharp Alpha Advisors, a company designed to advise startups, casinos, and professional sports organizations with their efforts in relation to sports betting.
The Sharp Alpha Fund I was created as a venture capital fund for technology companies focused on sports betting, and it has now raised $10 million from high net-worth investors. Sharp Alpha Fund has made 11 investments and deployed $2 million in seed and Series A funding rounds so far with expectations to invest all of the $10 million raised by the end of 2023.
Why Are Sports Betting Start-Ups So Important?
With the biggest players in sports betting (i.e. DraftKings and FanDuel) focused more on customer attraction and retention, they have not invested in their own technology development and rather purchase technology companies with promise. For example, DraftKings acquired Blue Ribbon Software Ltd. in April, a software company that develops technology jackpot promotions. With so much opportunity for growth in the sports betting industry, start-ups like Blue Ribbon can be at the forefront of new development.
What Companies Has the Sharp Alpha Fund Invested In?
The Sharp Alpha Fund invests in a number of companies that they call “competitive entertainment”; this can include sports betting, fantasy sports, online casinos, video games, NFTs, digital collectibles, and connected fitness. Some of the early investments for the Sharp Alpha Fund include Players’ Lounge, a platform for wagering on video gaming, GridRival, a fantasy motorsports platform, PickUp, a social prediction platform, and Prophet, a peer-to-peer sports betting exchange platform.
Prophet Exchange: the Future of Sports Betting?
Perhaps the most exciting of Sharp Alpha’s investments are in Prophet, a peer-to-peer sports betting exchange. Prophet has secured a market access agreement with Caesars Entertainment for New Jersey and Indiana, and on Tuesday, Prophet announced the launch of a pre-registration period for ProphetExchange.com in New Jersey.
Prophet is currently running a crowd-funded consumer campaign called “Exchange the Love” which affords early adopters of Prophet a deposit match bonus worth an additional $25 for every 500 new registrations. Prophet allows customers to place wagers on the spread and total market at even money odds, which isn’t available on most sportsbooks, and also create their own unique odds on various markets offered. Backed by the most powerful sports betting venture capital fund in the country, Prophet is poised to make waves in the industry.