New model would let sportsbook customers trade open betting positions
A new study has proposed a trading-style model for iGaming that would let players buy and sell open betting positions between themselves, creating what the authors describe as a secondary market inside a bookmaker’s own platform.
The paper, Model for diversifying iGaming through financial derivatives, by Petko Iliev and Daniela Orozova, argues that iGaming is moving beyond its traditional role as entertainment, as profit-seeking behaviour becomes a stronger driver of customer participation. “The so-called ‘prediction markets’, which iGaming platforms essentially represent, are beginning to ‘repackage’ traditional bets as financial assets,” the authors write.
The proposal takes a familiar sportsbook feature, “cash-out”, and pushes it further. At present, a player who wants to close a live or unsettled bet may be offered a cash-out price by the bookmaker. If the player accepts, the bet is settled early, and the position is closed. Under the model, another customer could instead buy that position, paying a negotiated price, while the operator hosts the transaction and charges fees.
In plain terms, one customer gets a better exit price than the bookmaker’s cash-out offer. Another gets exposure to the remaining part of the bet at a lower price than placing a new wager. The bookmaker loses some margin, but gains a new product, extra fees and potentially higher engagement.
The authors say the key missing piece in today’s sportsbook model is the ability for one player to take over another player’s position. “Currently, iGaming platforms do not offer the possibility for a client to terminate a bet by selling it to another client who seeks to profit from the same events,” the study says.
A controlled cost for bookmakers
The paper tests the model through simulations built around three participants: the original bettor, the buyer of the open position and the bookmaker. Its results suggest that both customers benefit modestly. Player 1’s gain ranges from 0.5 per cent to 1.5 per cent, while Player 2’s gain ranges from 0.5 per cent to 1.0 per cent.
As a result, the bookmaker’s profit falls by roughly 1 per cent to 1.5 per cent, although the study argues that this is comparable to the cost operators already accept when funding promotions or launching new products.
The model is not presented as a free-for-all exchange. The authors stress that the bookmaker would keep control because resale would only be allowed while a bet is already eligible for cash-out. It means operators would not be creating new unknown liabilities, but opening a controlled resale window around existing ones.
The researchers also acknowledge that regulation has not caught up. “At present, there is no established legal or regulatory framework applicable to P2P (peer-to-peer) transactions of the type proposed by the innovation,” they write.
Prediction markets blur the line
Prediction markets are already testing the boundary between finance and gambling, especially in the US. These platforms allow users to buy and sell positions linked to the likelihood of future events, from elections and economic data to sports results. That makes them look partly like financial exchanges and partly like betting products, which is why they have become a sensitive issue for gambling regulators and sportsbook operators.
That is why the model proposed by Iliev and Orozova is likely to attract attention from sportsbook executives. It would not transform a bookmaker into a prediction market such as Kalshi or Polymarket, but it would introduce some of the same concepts, including liquidity, position management, pricing and early exit mechanisms.
For operators, that overlap may point to a new commercial opportunity. A sportsbook-controlled resale market could give players some of the flexibility associated with trading, while keeping the activity inside a regulated betting environment. It would allow customers to exit or acquire exposure without turning the bookmaker into a fully open exchange.
The research does not present the model as ready for immediate launch. It offers a framework for how such a market might work, and for where the risks may sit. For an industry watching prediction markets move closer to sport, that may be enough to start a serious conversation.
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