In what seems like a shift in direction for PokerStars, the company has launched PokerStars Exchange a Stars-themed skin for Betfair.
The resulting product is distinct from PokerStars Sports — the established sportsbook on the Stars software. Unlike a sportsbook, a betting exchange does not set the odds itself.
Instead, customers specify the odds they want and the dollar value they want to bet. This creates a market in which other customers can accept the bet, laying it off with their own money and effectively playing the bookie.
The exchange then acts as a middleman, linking the customers up and making its money from a small cut of every bet made on the platform.
The market sets the odds as fast as buyers can be found. This is much closer to an "efficient market" — in the economic sense of the phrase — than a bookie which sets its own odds.
Both Stars and Betfair are owned by Flutter, so the addition of PokerStars Exchange is more or less a case of slapping some PS branding on a new front end. The exchange and liquidity are all shared with Betfair behind the scenes.
As a result, PokerStars Exchange doesn't have to wrestle with any of the teething problems of a betting exchange. It is a Catch-22 of this business model, that it is hard to get people to place bets with your exchange if there are not already a lot of people placing bets with your exchange.
A shift in focus
“We’re always looking at ways to bring PokerStars players something new," Richard Garrod, Director of Product at PokerStars, told the press. "To be able to do that in collaboration with our colleagues over at the world’s largest betting exchange is a huge privilege."
This appears to be a shift in focus for a site that had set itself the task of re-focussing on poker. Like the betting exchange itself, Stars has to move with the market.
"Our research suggests that our customers would welcome the addition of an exchange product," added Garrod. "Seventy percent of current sports bettors saying they want to get involved.
"The PokerStars Exchange gives our players access to a brand-new sports betting experience alongside a global community of sports fans, with all the convenience of a single account and wallet. After months of hard work and execution, we’re thrilled to offer PokerStars players this addition to the PokerStars portfolio.”
The real question is whether the new exchange will pull money away from the poker pool. On this subject, only time can pass comment.
Stars has slowly been losing ground to GGPoker in the online poker market. The pandemic created a wave of new and returning online poker players that all the sites are still riding. As we switch from pandemic-panic to a more stable endemic mindset, PokerStars and Flutter seem to be looking for ways to hedge against the possible break and turn of that wave.
The .com and .eu versions of PokerStars Exchange became available on April 21, 2022. There is no news about other segregated markets getting in on the action yet.
Featured image source: PokerStars
