Maybe it’s a terrible idea but something I always thought could work is to set up a business that only offers spread bets and then market it as a company that lets you gamble on markets. This would probably be a dead end, mainly because you could only offer it in the UK and Ireland, but I’d still like to see if it would work.
From memory, I can only think of two people in the industry who have made an explicit connection between CFDs and gambling in public. One was Stuart Wheeler, the guy that founded IG Group, who wrote once in the Spectator that “all spread-betting firms are bookies, whatever gravitas they may attempt to assume”. The other was the founder of Integral. But yea, what would those two know, right?
My sense is that there are four reasons people don’t like making this connection.
- They personally like feeling like they work in finance
- It works better for marketing to tell clients they’re trading. Gambling is luck, trading is skill.
- Saying the opposite in public is damaging for the ego in the case of (1) and bad for business in the case of (2)
- There is some genuine gray area between the two
Anyway, there does seem to be something of a trend occurring that is kind of changing this, with new firms offering products that sit more explicitly at the crossroads of financial services and gaming. I would say that the rise of props is one example of this but that’s not exactly what I’m referring to.
One notable example is Profit.com. This company started life as Darqube and was more like a wannabe Bloomberg terminal when I first found it. Clearly that didn’t pan out so they are trying to move into offering trading ‘games’, which mainly seem to be centered around tournaments.
Then there are a couple of other firms that were set up by industry executives. One is Investomy, which is run by Husam Al Kurdi – SquaredFinancial’s former CEO. Another is Tradants, a marketing company set up by Lars Gottwik, one of the founders of JFD Brokers.
According to its website, Investomy offers various trading games with “unique rules, strategies, and dynamics, offering a diverse and compelling gaming experience to players of all levels.” Tradant’s offering, which may have changed, is aimed at “merging three fast-growing sectors – financial markets, esports, and fintech” according to Gottwik’s LinkedIn page.
You could argue that this is not ‘new’ given trading contests are an old concept. But these offerings seem broader than just contests and they don’t involve real money being deposited. My sense is that these could go two ways.
- A company like Profit.com could evolve into a prop / fund trader company and use its existing tools as a marketing funnel for that
- Companies use these tools as a way of generating leads / fostering engagement with clients
As to why this is happening now, I think there are a few reasons. One is to do with Covid. When the meme stock thing happened, it was made clear that there are lots of people who are happy to treat punting on stocks like gambling. That a huge part of the meme stock story was Dave Portnoy, the owner of gambling media site Barstool Sports, is a simple example of that.
Other drivers are regulatory and marketing-driven. With regard to the former, post-2018 it seems like some people are looking for alternative ways to make money, without the same level of regulatory burden. Hence the rise of funded trader programmes.
Another related component is competition. Readers don’t need reminding what a tough business this is and how hard it is to get new clients. Gaming is something new and could offer a way to generate leads.
XM is hiring a massage therapist
We all know that the gold price is making life stressful. That b-book position wasn’t looking great on Friday. Then you woke up today and you were even further offside. What to do?
You could hedge out but that would be way less fun and adrenaline-inducing. So instead you could get a massage and then try to forget about everything. But then you would have to tell your colleagues that you were just popping out to get a massage. Weird! Everyone will start gossiping about you.
A simple solution to this problem is to bring the masseuse in house and that is what XM is doing. The company is hiring a professional masseuse for its Nicosia and Limassol offices to give 15 minute chair massages.
If you get the job you will “play a crucial role in employee wellness and productivity.” To do so, you will have to “maintain the cleanliness and orderliness of the facilities and ensure that amenities are in proper working order” and also “maintain accurate records of employee sessions and feedback.”
The job is currently part time but if things keep going the way they are, this may be a full time gig for the dealing department alone.
A Thai expo gets delayed
On a somewhat related note to massages, we looked a couple of months ago at Thailand and came to the conclusion that in some instances, if you aren’t greasing palms, the palms may end up greasing you.
That was after an expo got raided by Thai police and shut down. Now another expo has been ‘postponed’ until next year.
TFI Expo was supposed to take place on Saturday but the exhibitors sent an email barely a day before saying that the event will now take place next year. They put the blame on…exhibitors not being able to make it?
Perhaps it was bad planning. Or perhaps Big Joke didn’t get his cut. Who knows?
What next for crypto?
The first issue of TradeInformer published this year looked at the prospect of Binance getting wrecked. That has now happened. This was not the result of any great powers of foresight on my part. It just tends to be the case that when you let people sign up to your company as Mickey Mouse using a Disneyland Paris ID, and then send a few bil to the Iranian Revolutionary Guards, regulators and prosecutors don’t like it that much.
What I continue to find amazing is that there are people in crypto who think this is somehow great news? Celebrating as wonderful the most prominent executive in the sector getting criminally charged and the largest company in the sector getting a >$4bn fine doesn’t seem logical to me but then nothing in crypto ever seems logical.
The other ‘guess’ I’d made for 2023 was that Tether was going to come unpegged and that would sink the entire sector. This is still possible.
However, I am much more up in the air about crypto than I was 12 months ago and that is primarily for it being used as a means of getting dollars if you live in emerging markets.
That was further buttressed by a recent conversation I had with someone, who was talking about sending money ‘home’ to their country. They noted that if they send back money at all, it will either be stolen or so severely clipped on various ‘charges’ that it simply isn’t worth doing. Sending Tether is much easier.
So yes, crypto still could end up collapsing and most of the tokens are worthless. But it will be interesting to see what happens next year.