Football Index launched a virtual “stock market” in 2014 where clients can buy and sell ‘stakes’ in professional footballers tied to their on-field performance. Participants can purchase shares in star players like Lionel Messi or Harry Kane. The site provides a mix of fantasy sports and regular sports betting with elements of stock market speculation.
The company now plans to build a trading platform using tools similar to those Nasdaq uses on traditional stock exchanges, the Wall Street Journal reports. Football Index markets itself as having aspects of a traditional financial market. But its products are regulated by the British Gambling Commission, rather than the industry watchdog, the Financial Conduct Authority.
Under the agreement, Nasdaq will be lending its technology and brand to the U.K. soccer-betting platform.
Faced with tough competition in its core business, Nasdaq has branched out into various related areas over the past decade, including selling its technology to other market operators. Nasdaq technology is used by dozens of exchanges worldwide, such as Bermuda, Indonesia, and Iraq, as well by some cryptocurrency exchanges.
Nasdaq has other sports-betting clients too, including the Hong Kong Jockey Club, which has a monopoly on the Chinese territory’s sports-betting market. It also has an agreement to provide betting technology for the horse racing unit of Australia’s Tabcorp, a lottery and gambling giant. In both those cases, Nasdaq has supplied back-end technology but its logo and branding don’t appear on any consumer-facing products.
The arrangement with Football Index will be the first in which the Nasdaq brand will be visible to gambling customers. Magnus Haglind, Nasdaq vice president in its market technology unit, said it was the customer’s discretion whether to use Nasdaq branding.
Unlike the U.S., Britain has a vibrant, regulated sports-betting industry, with betting shops on most shopping streets. The U.K.’s gambling industry, which also includes slot-machine like fixed-odds betting terminals and online stakes, generated a gross gambling yield, equivalent of sales, of £14.5bn ($18 billion) a year in the year to September 2018, according to figures from the country’s Gambling Commission.
While most sports-based fixed odds betting isn’t FCA regulated, some sports spread-betting—where the outcome of a bet could fluctuate—does fall within U.K. laws governing financial services.
"The concept of what a market is has radically evolved over the past few years, something that Nasdaq as an operator and builder of markets has played an important part of first-hand," said Paul McKeown, Senior Vice President and Head of Marketplace Operators and New Markets, Market Technology, Nasdaq. "We are focused on democratizing marketplace technology by offering essential components of matching engine technology traditionally used by financial markets, and bringing the capabilities to a cross-asset, cross-industry environment via the cloud. Football Index will use our matching engine technology to provide their clients with a platform to revolutionize how fixed-odds betting operates."
"Nasdaq is a legendary brand," said Adam Cole, Founder and CEO, Football Index. "We're very proud and excited to work with them to provide our order matching service, which is the powerhouse of any exchange. Football Index has come a very long way in a short period of time. Our relationship with Nasdaq is another major step in our journey to establish Football Index as a world-class exchange, worthy of the world's top footballers that are traded on it."