If we were to be brutally honest about it, many pillars of the financial sector were very slow in catching on to 21st digital technology. Indeed, it would surprise some to learn just how archaic and cumbersome some mechanisms in the financial sector were up until the last few years. For instance, the process of sending money from one country to another (cross-border remittances) remains painfully slow and complicated in some cases, and some transactions still require physical ledgers.
But things have changed, albeit slowly. And the rise of FinTech, including blockchain solutions, has put pressure on traditional financial institutions to evolve their practices. And with that evolution comes expansion; a realisation that financial institutions can apply their expertise to other sectors.
A case in point is Nasdaq, which is now openly touting the use of its Market Surveillance for sports betting platforms. Notable clients that Nasdaq has picked up include the Hong Kong Jockey Club and ATG, a Swedish company that offers parimutuel betting. It is part of Nasdaq’s ambitious expansion of its financial technology, with the American stock exchange company also looking at areas like real estate trading.
Unclear what Nasdaq can offer an established industry
But while Nasdaq has picked up a couple of interesting clients, it’s not as if it has shaken the foundations of the betting industry. In fact, some are questioning why Nasdaq is interested in this sector at all, given that it was already highly developed and self-sustaining.
So, what exactly can Nasdaq offer that is not already in place? To be frank, it’s not quite clear. If you look, for instance, at the extensive markets for football odds from William Hill – an operator with a global presence and reputation of experience after decades in the industry. The offering on its platforms is already slick, and bettors have come to trust the brand. It’s not quite clear what Nasdaq could offer – if anything – to William Hill or some of its rivals.
And yet, there are two areas where Nasdaq seems most confident it can add something – live betting and overall transparency. It maintains that the former – live betting – is growing in importance across the industry, which is a fair point, given that it has become normal for bettors to watch a match and bet while the action unfolds.
Linked to that live betting experience is the transparency model, hence “Market Surveillance”. Nasdaq maintains that bettors are interested in how live betting odds change in real-time, and whether they are getting a fair price for their bets. Again, much of this type of structure already exists in the sports betting industry.
Boom in online sports betting in US expected
Perhaps Nasdaq is buoyed by the expected boom in online sports betting in the United States as many states liberalise restrictions after the historic Supreme Court decision of 2018. It is possible, then, that many new operators will come into the market and perhaps look to utilise Nasdaq’s solutions for their platforms.
But in a recent article by the Financial Times on the subject, caution was preached. The head of Euronext, the European exchange group, sees similar opportunities in selling the expertise of stock exchange giants but to other financial industries only. He said: “Our risk appetite for becoming a technology provider in areas where we are not experts is low.”. And that gets to the heart of it: Nasdaq is entering an arena where it is not an expert, and where much of what it wants to deliver already exists.