Do Americans Want to Bet on Individual Athletes? Marc Lore bets on it with Mojo – TechCrunch

0
5

Mojo, a seven-month-old New York-based company, says it wants to build a new sports stock market where fans can bet on athletes just like stocks. Though slated to launch this fall, the fledgling outfit has already raised $75 million in Series A funding led by Thrive Capital, with the participation of famed entrepreneur Marc Lore, MLB great Alex Rodriguez and Tiger Global.

The investors are betting on more than the idea. Mojo’s co-founder and CEO is Vinit (“Vinny”) Bharara, a childhood friend of Lore who previously co-founded a trading card company with Lore that sold to Topps, co-founded Diapers.com with Lore (who sold to Amazon), and more recently sold two more businesses. One was a publishing company that sold to Bustle Digital Group last year; the other was Cafe, a podcast company that Bharara co-founded with his brother Preet Bharara (the former United States attorney) and sold to Vox last year.

Even with such a track record, Mojo seems ambitious. The company declined to answer our questions today, saying it’s “too early” in its trajectory, so please note that our understanding comes from conversations with gaming and finance industry veterans, a short Bloomberg story on Mojo, and a LinkedIn post published earlier today by Bharara, who writes that he and Lore have been dreaming of this business since they started poking around in elementary school together.

Here’s what we think is happening with this company, which already has 40 employees: Mojo invites users to buy futures derivatives (essentially contracts) that are a factor in the kind of metric you might see in Major League Baseball , one that measures a player’s worth in all parts of the game by trying to determine how many more wins he is worth than a substitute.

We have no idea exactly how Mojo will determine these values, but in his post Bharara uses terms like “objective statistics” and “intrinsic value” and “price integrity” to suggest that Mojo isn’t just figures out figuratively behind.

Mojo – who might have a clearinghouse partner? – appears to be on the other side of these contracts, which may invite participants to bet that an athlete’s stats will improve or deteriorate over time based on a range of factors, such as injuries or expected changes in the selection of a team or the tendency of certain athletes to get themselves suspended. (Again, we’re kind of guessing here, but Bharara — who runs the company with former Walmart.com president Bart Stein — uses the term “market making” in his post. He also talks in his post about “instant liquidity,” which you can’t get if you try to find another market participant who takes the opposite position that you took.)

Ultimately, Bharara writes, the plan is to start with one sport — professional football, Bloomberg says — and eventually “have all sports, thousands of players, and many different markets.”

As for whether Mojo needs buy-in from these thousands of players (or their player associations), no one we spoke to today seems to think so, even though everyone agreed it would be nice if they did. .

Our friendly sources also suggested that players were unlikely to bet on themselves – another thing we wondered about – given the technology Bharara says Mojo is building. In his post, he says the plan is to throw “complex engineering, advanced data science, advanced market development and advanced app design” into the development of his platform, so unless Mojo does all of these things badly, it’s possible! — it will probably know exactly who its customers are.

A very pressing question, of course, is whether the state gambling commissions will approve Mojo. Given how much is at stake — New York has reportedly raked in nearly $80 million in tax revenue since it opened online betting in early January — it seems likely they will, but Bharara told Bloomberg that arrangements with such regulators are a work in progress. to be.

It’s also fair to wonder if Americans really want to bet on individual athletes.

We suspect so. Meanwhile, when asked what he thinks of the concept, Bradley Tusk – an investor in FanDuel once credited with “saving fantasy gaming in New York” – told us via email earlier today: “We looked at several stock markets. for x ,’ and so far none have really added up.

“The question here is whether people would want to buy and sell derivative shares in an athlete if they can now also bet directly on games and performance. It feels like Americans have a bottomless appetite for gambling and investing. Mojo better hope that applies here too.”


This post Do Americans Want to Bet on Individual Athletes? Marc Lore bets on it with Mojo – TechCrunch was original published at “https://techcrunch.com/2022/03/09/do-americans-want-to-gamble-on-individual-athletes-marc-lore-is-betting-on-it-with-mojo/”

LEAVE A REPLY

Please enter your comment!
Please enter your name here