Nasdaq Treats Sports Betting Like A Stock Exchange

• Nasdaq is using its Longitude trading tech to handle live wagers for the Hong Kong Jockey Club.
• The company says sports betting and stock trading are based on the same fundamental concepts.
• The US has long treated stock trading as legally exempt from anti-gambling laws.

NEW YORK – The second largest stock exchange in the world has decided to apply its real-time trading technology to sports betting.

In the US, Nasdaq handles over $10 trillion in market cap among the 3900 companies it lists. Only the New York Stock Exchange manages more volume.

However, Nasdaq isn’t just a stock exchange. The company is a technological service provider for many global markets.

One such market is the sports betting industry.

One of Nasdaq’s newest customers is the Hong Kong Jockey Club (HKJC). The HKJC is Hong Kong’s largest taxpayer, accounting for up to 12 percent of the state’s entire tax revenue. The HKJC does this thanks to owning a monopoly on horse racing in the territory.

And horse racing is big business in Hong Kong. In a region of just 7.8 million people, Hong Kong horse betting sees 50 percent more annual handle than all US tracks combined.

The HKJC is also the sole Hong Kong operator for the area lottery and international football events. Effectively, the HKJC is the official Hong Kong sportsbook.

As such, there is a need for a speedy live betting platform. The original HKJC betting platform was good enough for simple pari-mutuel betting, but times have changed. With the move to live in-game wagering, the existing system has proved inadequate.

That’s where Nasdaq comes in.

Scott Shechtman, the head of Nasdaq’s New Markets division, explained the move to financial site Axios:

“As an operator, you increasingly need more data and you need it fast, you need bets to run through your system quickly and you need to be able to handle peak times. Well, guess what? That sounds a whole lot like a stock exchange.”

To speed up the betting backend for the HKJC, Nasdaq is applying software it developed to handle rapid trading. The company modified its proprietary Longitude product “because it [is] based on similar principles.”

This interpretation is hardly a stretch.

Indeed, treating legal sports betting as a sort of conceptual stock market has been the tack used by the US federal and state governments for years.

Most states with gambling prohibitions in place have specific carveouts for stock markets. This is a nod to the fact that investing in stock is gambling by definition.

Treating an exchange like a live sportsbook, then, is a natural extension.

While it remains to be seen if Nasdaq will deploy its new technology to US books, it is a potential development worth monitoring.

News tags: Longitude | Nasdaq