Ian Epstein calls it the “good karma plan.”
PropSwap, Epstein’s Las Vegas-based sports bet resale company, had grown over the past five years from a startup to being valued “in the eight-figure range,” he said. PropSwap allows owners of sports bet tickets to resell the wagers to third-party buyers, serving as the middle for a 10% commission.
They deal in future bets, such as the Dallas Stars—who opened at 20-to-1 odds—to win the Stanley Cup. The Stars are one of two teams standing, meaning someone with a ticket could use PropSwap to flip the wager to a third party and receive a guaranteed, smaller profit.
If it were only that easy in March.
When the pandemic shuttered all sports in the spring, it also put a pause on the PropSwap business, including wagers on the heavily bet on NCAA Tournament.
“I felt like we had a ton of momentum going into March Madness, and March is our biggest time of the year,” Epstein said. “The first four days of March Madness, that’s like four Super Bowls. It was a gut punch. We had the rug pulled out from under us.”
It created a problem they could have never expected. All tickets were considered no-action, meaning the payout from the Nevada sports book was only the original amounted wagered. The third-party buyer was left with a mostly worthless ticket — PropSwap had its commission, and the original ticket holder enjoyed a small profit.
Enter the “good karma plan.”
PropSwap’s terms of service dictated that the buyers were out of luck, Epstein said. But he and business partner Luke Pergande had a different idea.
“We said right away that we’d give back our commissions, that was a no-brainer,” Epstein said. “We wanted to also see if we could get sellers to give back their profits, because it was a terrible situation that everyone was in; it wasn’t anybody’s fault. The tournament was canceled on a Thursday, and that Friday we put out a call to sellers. We called it the ‘good karma plan.’ ”
Eventually, Epstein said, most sellers—around 90%—agreed to give back at least some of their proceeds. Whatever difference needed to be made up, PropSwap took care of it in expense that cost the company hundreds of thousands of dollars, Epstein said.
“It was incredible,” he said. “It really showed that we’re actually a real online community. A lot of those people had been with us and grown with us these past few years.”
When the idea for the company was brought to Nevada’s Gaming Control Board several years ago, it was decided that PropSwap’s model shouldn’t be considered sports betting, which gave Epstein and Pergande the green light to proceed without a gaming license.
One of the most publicized PropSwap transactions was the purchase of a New Orleans Saints ticket at 20-to-1 to win the Super Bowl in 2019. An $8,000 ticket originally purchased at South Point, the slip was sold to media personalities Clay Travis and Cousin Sal for $57,500 before the Saints played the Los Angeles Rams in the NFC championship game.
Most sales on PropSwap aren’t nearly that large, and some sell tickets for face value or slightly above that.
Of course, the Saints lost that game in January 2019, so the ticket didn’t cash, but the transaction netted PropSwap significant media attention, Epstein said.
Matt Metcalf, director of the Circa Sports books in Downtown Las Vegas, said PropSwap provides a “unique marketplace for futures players.”
He said Circa has seen an uptick in futures pool play because of bettors shopping tickets on PropSwap’s secondary market. Epstein is stationed Downtown, spending much of his time at a co-working space near the federal courthouse.
Clients can post their tickets for sale or make third-party purchases at propswap.com, where there’s also a listing of available tickets—from golf’s U.S Open to a prop bet of who will win baseball’s Most Valuable Player.
PropSwap had its biggest month of sales month in August with three of the four major U.S. pro sports leagues in action, and the start of the NFL season around the corner.
With sports betting becoming more popular by the year in the U.S.—and legal in more states—Epstein said he thinks the sky is the limit for his company, which has a small staff scattered across the country. It has come a long way from back when a couple of college buddies from the University of Arizona tried to get the concept off the ground.
“As sports betting grows, so do we,” Epstein said. “Tickets can sell on our site multiple times and we make a profit each time. We have a great business model. I think that once a person becomes a sports bettor, they don’t stop betting. I’ll probably be in this industry my entire life.”
This story appeared in Las Vegas Weekly.