Prophet Exchange to cease New Jersey operations by May 28

One of the two sportsbook exchanges operating in New Jersey, Prophet Exchange, will cease its operations in the state effective May 28. The company, however, assures that this is not a permanent shutdown but a strategic move, with co-founder and COO Jake Benzaquen stating they will be "back in more states soon.”

Prophet Exchange was the first to introduce exchange betting in New Jersey, offering a platform where bettors wager against each other instead of the house. The exchange launched in August 2022 and its model allowed the company to generate revenue by taking a cut of the winnings, a fee that is typically lower than the traditional vig charged by sportsbooks.

Unlike traditional sportsbooks, Prophet Exchange allows bettors to remain liquid during the games, enabling them to “buy” and “sell” positions as the game progresses. Prophet Exchange’s departure from New Jersey leaves Sporttrade as the sole exchange betting site in the Garden State.

In an effort to expand its user base, Prophet Exchange introduced a marketing strategy last May that encouraged bettors to use boosts at traditional sportsbooks and bet the other side at Prophet Exchange for guaranteed profit.

Dean Sisun, co-founder and CEO of Prophet Exchange

Dean Sisun, co-founder and CEO, explained the rationale behind this approach: “We don’t care about arbitrage. We don’t take any risks. If someone is trading on our exchange and laying off prices with us, it’s just volume for us. Plus, it gives us liquidity for other people to go and bet. At the end of the day, we are purely a liquidity exchange, and any sort of volume that comes in, we welcome.”

Currently, New Jersey is the only state where exchange betting is legal. However, there are legislative efforts in a few other states that may soon allow similar models.