Prophet Exchange To Return As ProphetX With A Sweepstakes Model

In a move to revitalize its presence in the competitive sports betting market, Prophet Exchange has announced the upcoming launch of its new brand, ProphetX. This rebranding comes with a significant expansion of markets and a revamped business model that aims to attract a diverse range of sports bettors across more than 40 U.S. states.

The company’s approach involves a product built on the sweepstakes betting model, set to go live next month, according to an announcement on X (formerly Twitter).

Prophet Exchange initially entered the market in August 2022 with a peer-to-peer platform that allowed bettors to wager against one another. This model, while popular in European markets, faced challenges in the U.S. due to stringent regulations. New Jersey was the sole state where Prophet Exchange operated, but even there, and despite $10 million in additional funding a year ago, the company struggled to establish a strong foothold.

The company’s decision to close its New Jersey operations in May was a strategic retreat, allowing it to refocus its efforts on what is in part a free-to-play sports betting platform. This new platform will provide customers with virtual currency to kickstart their betting experience, with the option to purchase additional currency to enter contests for prizes. The sweepstakes gaming trend has seen a surge in popularity across the U.S. in recent months.

If at first you don’t succeed

Despite its growing popularity, sweepstakes gaming faces regulatory uncertainty. States such as Alabama, Idaho, Kentucky, Louisiana, Michigan, Montana, Nevada, and Tennessee have all taken a stand against sweepstakes wagering, prohibiting it outright.

Prophet Exchange’s pivot to a sweepstakes-based model is a response to the increasing pressure from regulators. By transitioning away from traditional sports betting, the company hopes to leverage the sweepstakes model to engage with a broader audience, while also circumventing the licensing barriers and costs, and legal restrictions, that have hindered its expansion.

If successful, Prophet Exchange could set a new precedent for sports betting in the U.S., potentially influencing the regulatory environment and opening the door for other companies to explore similar models.

The gamble that didn’t pay off

Prophet Exchange marked a significant milestone in the U.S. sports betting market when it became the first peer-to-peer sports betting exchange. Founded in 2018, it officially launched on Aug. 29, 2022, following license approval from the New Jersey Division of Gaming Enforcement.

There is one other exchange operator in New Jersey: Sporttrade, which launched in September 2022.

Prophet Exchange was designed to change the dynamics of sports betting by allowing users to bet against each other rather than the house, aiming to create a more balanced betting environment with superior pricing.

The founders, CEO Dean Sisun and COO Jake Benzaquen, brought their sports betting experience to the forefront, shaping the company’s culture and mission around their understanding of what bettors seek in a sports betting platform. Their approach was to offer wagers on major markets that didn’t include a substantial vig.

However, unable to secure an adequate market share, Prophet Exchange opted to abandon its plans, which included possible expansion into Ohio, Colorado, and other states. With the rebirth as a sweepstakes platform and an immediate larger footprint, it could be in a better position to find its edge.