Interactive Brokers Group, Inc., America’s No. 1 online brokerage firm, is offering a powerful incentive to encourage millions of sports fans to try something new: $1,000 in free commission credits for learning how to invest online through a simulated sports-betting portal.
The concept blends two increasingly popular activities — sports gaming and investing — that both depend on accurately assessing the probability of winning, whether the stakes involve a game or an equity trade.
If getting compensated to bet on sports as way to master online transactions sounds too good to be true, the person to thank is company founder and Chairman Thomas Peterffy.
“We expect this promotion to attract customers who may be new to the Interactive Brokers platform, and who are more familiar with spectator sports than they are with the financial markets,” said Peterffy in July, when his company unveiled its “Bet, Learn, Win” simulated betting market.
Interactive Brokers is offering the $1,000 commission credits incentive to the first 2.2 million sports aficionados who sign up. The sports that are available for simulated betting so far include soccer, tennis, baseball, and NFL football. Collegiate football and NBA basketball will soon be added, according to company officials.
With the plethora of gaming options flourishing in the United States since last year’s Supreme Court decision nixing restrictions on sports betting in the United States, it’s important to note that the Interactive Brokers site functions as an educational tool, and not as a place to wager. The objective is to help participants gain a broader understanding of how online transactions work.
Steve Sanders, Interactive Brokers’ executive vice president of marketing and product development, tells Newsmax that Peterffy’s brainchild “was set up to educate people on probabilities.”
“It’s set up a lot in the same way [as the equity markets],” says Sanders. “If you want to buy Google, there’s always a bid and an ask, and you can always buy and sell at any time.
“In a similar way with the gaming site, you can always buy into the game or sell out of your bet at any time,” he adds.
Interactive Brokers’ sophisticated technology even allows players to “invest” in their team’s prospects after the game is underway.
“You can bet during the game,” Sanders says. “Of course, the odds change as the game goes along.
“Obviously, if a baseball team is winning 10-0 in the 9th inning, the probability is pretty good [they’ll win].
“The other similarity to trading is you can get out of your bet at any time,” he adds. “You don’t necessarily have to wait to the end, just as in stock trading where there’s a bid and an ask, you can always buy and sell at any time. The same with this sports-betting setup.”
Of course, participants in the simulated sports betting site don’t actually have any cash at stake, they’ll be playing with “virtual currency.” Once clients establish an actual investment account, they can use any commission credits they earn to defray the cost of their transactions.
Interactive Brokers recently announced a new level of service, IBKR Lite, that offers unlimited, commission-free trades for US exchange-listed stocks and Exchange Traded Funds. For other Interactive Brokers’ other services — including options, futures, Forex funds, over-the-counter trades — commissions will still be assessed. Those existing services are being rebranded as IBKR Pro.
In addition to free trades on stocks and ETFs, IBKR Lite clients also have access to all the low-commission products Interactive Brokers offers.
So far, the company’s innovative approach to familiarizing consumers with online investing looks to be a hit.
“We’ve had a number of people who start out gaming and migrate into our online broker site,” says Sanders, “which was part of our reason for doing this.”
Using simulated sports gaming to teach people how to invest their money follows in a long tradition of technological innovation at Interactive Brokers. According to Barron’s Best Online Brokers, its sophisticated technology enables clients, whether large or small, to manage their portfolios at the lowest possible cost.
“There are always a bunch of do-it-yourselfers out there that want to join our platform,” says Sanders. “They become more sophisticated and like what they see.”
Interactive Brokers is the nation’s largest online trading broker, as measured by daily average revenue trades. It provides automated trade execution around the clock on over 125 markets in countries around the world.
Participants can sign up to simulate sports betting at sports/ibkr.com. A free mobile app for the simulated sports-betting site is available as well.
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