Smarkets is a London-based peer-to-peer betting exchange founded in 2008 by Jason Trost. The original premise was straightforward: build a lower-commission alternative to Betfair by applying financial exchange technology to sports and political prediction markets. Where incumbent exchanges charged around five per cent commission, Smarkets launched at two per cent, targeting sharper bettors and arbitrage traders who found the legacy platforms expensive.
The company expanded beyond sports markets into political event contracts, most notably around UK general elections, US presidential races, and Brexit-related outcomes. These prediction markets attracted attention from forecasters and analysts as well as recreational bettors, giving Smarkets a degree of mainstream visibility unusual for an exchange operator. The platform also launched SBK, a sportsbook product aimed at casual bettors, broadening the addressable audience beyond the exchange-native user base.
For operators and founders watching the gaming and fintech sectors, Smarkets is a useful case study in two respects. First, it demonstrates the difficulty of displacing an entrenched network-effect business: liquidity begets liquidity, and even a meaningfully lower fee structure does not automatically translate into market share at scale. Second, its move into sportsbook via SBK illustrates a recurring pattern in the sector, where exchange models, however elegant in theory, often require a more conventional product alongside them to drive volume and retention among mainstream users.