Nasdaq and Interactive Brokers Become the Latest Wall Street Institutions to Enter into Sports Betting

Nasdaq Inc. has revealed a new partnership with U.K. sports-betting company Football Index. The biggest trading companies in Wall Street are pushing further into the sports-betting industry.

Nasdaq agreed to provide the company with a trading engine, not unlike the one that underlies its signature stock exchanges. Football Index allows its clients to place bets, called shares, on the future success of professional soccer players.

“We’re the heavy-duty plumbing that can sit underneath [betting systems]. We are not taking peoples’ bets. It’s a matter of providing technology,” Scott Shechtman, Nasdaq’s head of new markets said.

Sports wagering is undergoing a wave of change driven by loosening regulations in the U.S. and a transformation in how bets occur. That has created new opportunities for financial services companies to deploy their trading knowledge and technologies in sports-betting business.

“The potential in sports is huge. The more legal it becomes, the more legal money that’ll flow into the pockets of the people who control the back-end infrastructure, as well as the front end,” David Rothschild, an economist at Microsoft Research said.

Just weeks before Nasdaq’s announcement, Interactive Brokers Group Inc. launched a simulated sports betting platform that allows users to place bets on real games using virtual credits provided by the company. The company is using the platform as a tool to convince users to open up brokerage accounts, as they can win up to $1000 in actual commission credits through the simulated platform.

With their announcements, Nasdaq and Interactive Brokers become the latest Wall Street institutions to dive headfirst into sports betting.