You know sports betting is booming in the United States when a service is launched that offers something other than the typical betting experience. On Monday, the Mojo app, founded in part by former baseball star Alex Rodriguez, went live in the New Jersey marketplace, giving customers the ability to buy and sell NFL players like shares.
Currently, there are over 300 NFL players on this new sports betting exchange, a group made up of the league’s “skill” players i.e. quarterbacks, running backs , wide receivers and tight ends. Players who generate fantastic stats, basically. Mojo intends to add varsity athletes and other sports in the future.
The goal for users is to assess how the players’ careers will unfold. They can go long on a player if they think his career will go up or short if they think it will go down. Stocks can be held long-term and cashed out when the player retires, or bought and sold frequently to take advantage of price movements.
Mojo banks all trades itself – users do not buy and sell with each other. The site takes a 1% commission on all transactions.
An NFL player’s stock price is made up of the “banked” Mojo value, which is the value the player has already accrued in his career so far, and the “future” Mojo value , which is what Mojo thinks they’ll win. the rest of the way. Stock values rise and fall based on a formula that equates statistics to dollars and cents (eg, $0.01 per 10 yards, $0.02 per touchdown, etc.).
Events off the field can also affect the stock price. If a player signs with a new team, for example, the price may increase if that team is known for their powerful attack.
Hope this isn’t another football hint
Mojo is certainly an interesting concept, although it reminds me of a disastrous site: Football Index.
Football Index was a similar exchange for British football. It collapsed last year because its operating model was unsustainable, costing users millions of dollars. Whether or not Mojo will work remains to be seen, but there are, fortunately, two key differences between Mojo and Football Index: ) The driving factor behind Football Index stock prices was dividends.
It was the latter who killed the site. Player stocks had prices and could be traded like on Mojo, but each stock on Football Index also paid daily dividends based on how the players performed on the pitch. So, football players whose shares were paying a lot of dividends and thus providing users with a stable income were very valuable and their price was increasing.
But those dividends came out of Football Index’s coffers and eventually the company realized it couldn’t afford those payouts, especially as more shares were added to the market. Football Index abruptly announced in March that it was reducing the dividend cap from 14p to just 3p. This caused stock prices to plummet, with some losing 99% of their value. The site disappeared soon after and users, although many made money back, lost millions.