Published: April 7, 2022

A-Rod-backed sports betting app Mojo wants to let you bet on athletes like stocks

Good morning, Term Sheeters. Jackson Fordyce here, filling in for Jessica.

Sports fans have all had the experience of seeing an amazing athlete at the start of their career and just knowing they’re going to be a star. Now, a new company wants to let users put money on it.

Mojo, a sports betting app that’s currently in beta and plans to launch in the fall of 2022, will allow users to bet on professional athletes like they would a stock. The founders say the app will be available in states where sports betting is legal (but have declined to specify which states). Initially users will be able to put money down on NFL players, but the group has ambitions to expand to other sports. Mojo, which is headquartered in New York, recently raised $75 million in Series A funding from Thrive Capital and Tiger Global. Mojo co-founders Marc Lore and Alex Rodriguez also joined in the round. I got on a call with Mojo co-founder and CEO Vinit Bharara about this interesting—and potentially lucrative—slice of the growing market for betting on sports. 

Term Sheet: Tell us about Mojo

Bharara: It’s a new sports stock market, where you can bet on professional athletes like stock. So, it's really the ultimate futures bet, because it's a bet on the career of a player, but with 24/7 guaranteed liquidity, where there's always a price you can enter or exit your position. Your cash isn't tied up and the prices move based on a player's statistical performance on the field. And you use your sports knowledge to win. You go long and when a player plays better than expected to, you win. You go short and a player plays worse than expected, you win. Basically, it should look and feel like a Robinhood or a Coinbase, but instead of companies and crypto, you're betting on athletes that you know and that you can watch play.

How did you get into this space? 

My childhood best friend growing up—you may know him, Marc Lore—is a current part owner with Alex Rodriguez and the Minnesota Timberwolves. We did a bunch of companies together. We sold one called to Amazon. But the first company we ever did was in sports, and it was in the late 90s called The Pit. We had the same idea, where we wanted to create a sports stock market for the everyday sports fan. But at the time, when we talked to counsel, they said "listen, this would be gambling, sports wagering, and that's not legal right now.” So, we created what we thought was the next best thing. We created a sports card stock market, where we used sports trading cards as proxies for the athlete. And very similarly, you could trade them like stock, and it was really successful. We saw a lot of demand, users loved it. We built a whole trading infrastructure and came to understand this market and then we sold that to the Topps company. 

Then fast forward 20 years later, to 2020 and Mark called me and said "hey, you know now with the emergence of online gambling, we can do the idea like we always wanted to."

How does the algorithm determine a player's value?  

The key here is they're really betting on a cumulative career statistic. So, every sport is going to have a cumulative statistic that kind of aggregates several box score stats to try to represent the relative excellence of a player. In any sport, that's what they're betting on. And then prices move, because at any given point in time, that price is the latest projection of that player's career. That’s kind of how it works, you get in and think this player’s price is too low. I think this player is going to do better than what they're projecting for their career. And then that player plays and if he starts doing better, the price is going to go up, and vice versa. 

Are there things that happen off the field that affect that price as well?

Well, lots of things can affect what that ultimate career is going to be like, whether they get traded, or who their teammates are, or whether they're going to have playing time. So, lots of things can determine how a player is going to perform statistically for their career. 

You mentioned instant liquidity. How are you able to provide that to your users?

Folks are going to be making a bet or trade on the career of a player that's way in the future. You need to make sure that they can always get in and out of their position at all times. They don't want to have the money tied up, right? But it is extremely hard to do because every trade is made with us. So, our team is basically adjusting prices in real time, based on the latest projection of a player's career. And as a result, that's why we need to have this incredible team of data scientists and market makers to do this right.

We've seen a lot of these sports betting applications and platforms in the past do well at the start, and then kind of fizzle out. How's Mojo different?

We have over 50 folks now that are best in class across every area. And then I think it's a super differentiated product. I don't think there’s anything else out there like it in sports betting, and I think to win in the space, especially now, you're going to need to do it with product differentiation. And so that's our strategy. 

What do you predict in terms of legalization of sports betting?

Ultimately I think we’ll see every state be legal in the next few years, and then there will be a massive, massive market.

© Public Gaming Research Institute. All rights reserved.