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TD Ameritrade, a discount broker based in Nebraska, may turn to sports betting to fill the revenue void created by their shifting from commission-fee trading.

In an interview with the Business Insider, Vijay Sankaran who is the Chief Information Officer expressed the company’s interest in the fantasy sports businesses. Based on his opinion, TD Ameritrade’s business could have synergy with the sports business.

Although the brokerage company has not yet started on the sports-betting products, it has conducted some focus groups to assess its client’s interest in fantasy sports. An example of games that could be featured in fantasy sports is to trade shares of famous athletes.

When it comes to experience in sports betting, TD Ameritrade is in a partnership with ESPN. The brokerage house’s role is to provide systematic tools to help players not only create stronger lineups but gauge team performance as well.

Interest in fantasy sports sprouted since October when Charles Schwab Corp had eliminated option trades, commissions on equity and exchange-traded funds. This move prompted other competitors into doing the same which is what TD Ameritrade did as well.

Following this move, shares of TD Ameritrade and other rival brokerage houses dropped, however, it has since risen. The advertising campaigns have increased by up to 9% compared to last month.

Steve Boyle, TD Ameritrade’s CFO announced that the Nebraska based broker expected about 15% to16% net revenue following the shift from commission-driven models. These figures were presented in a statement that was released in October.

In light of this, the brokerage house is ready to embrace new commission-free models that would steer up the firm’s revenue. Options that the firm is ready to embrace include; businesses that embrace commission-free trading and sports betting.

However, Sankaran explained that TD Ameritrade would not be turned into a sportsbook operator. Instead, the firm wants its participants to place value on elite athletes who play for domestic sports leagues and use the names of the high-profile athletes for trading.

Sankaran’s firm is not the only company considering these options. All Sports Market (ASM) for instance is involved in stock-like trading in different professional sports. On the other hand, Fantex sells investors securities connected to contracts of high-profile athletes including famous NFL players as reported by Casino.org.

Another firm interested in sports betting is Interactive Brokers (IB) who made its way into the business this year. IB which is TD Ameritrade’s direct rival unveiled a simulation of its sports betting exchange.

In the simulation, wagers have a bid like in the case of stocks. Top teams are bid and offered at higher prices compared to the bidding of a poor team before kickoff.

In-game things may change depending on the team that is taking the lead. The odds of the winning team increases too. For IB games, the increment is a sum of virtual $100 which can earn betting winners more commission credits. A winner could even get up to $1000 worth commission credits.

Source: https://www.casino.org/news/td-ameritrade-could-get-into-sports-betting-to-boost-revenue/

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