Consolidation in the P2P Sector - Intrade Acquired by Competitor

Popular betting exchange Tradesports.com has acquired Intrade.com in a move aimed at increasing Tradesports' liquidity by nearly 50 percent.

Announced Friday, the deal should be in effect this week. Financial terms weren't disclosed.

The two Dublin-based P2P services will continue to operate separate brands online, but their sites will be connected to the same back end.

TradeSports.com has been in operation for more than 14 months with 13,000 members. The site made a name for itself as a trading exchange for sports, political and financial trading.

Intrade, meanwhile, was one of the first betting sites on the Internet to bring financial contract betting to the sports betting arena. It was owned and operated by Intrade plc., an associated company of Rupert Murdoch's News Corp International, which already raised over $14 million in funding, and was partly financed by Queensland Press.

TradeSports CEO John Delaney said the acquisition makes sense because TradeSports started integrating the Intrade betting screen a few months ago.

Delaney said the new partnership will create a strong brands in both Ireland and the United Kingdom, as well as continue growth in the U.S. market. He feels strongly that those brands can carve out an effective niche in a market heavily dominated by Betfair of the United Kingdom.

"If you look at Betfair, they have cornered the market on racing," he said. "Our mission isn't to focus on racing, and we have a good customer base in the U.S."

With the deal Delaney said the combined membership between the sites will be nearly 20,000. The two sites' systems were integrated with each other over the weekend.

In addition to having a heavy emphasis on U.S. players, something Betfair shies away from, Delaney said Tradesports' new and improved interface could help increase new account signups.

Many U.S. punters are still novices when it comes to the concept of betting exchanges, he said.

"The whole idea of laying on a team to lose is foreign to them," he said. "Now we have the option right there on the screen in a manner that is more custom to what they are used to seeing."

The new screen features options for both teams to win, which Delaney said will make it easier for U.S. customers who are unfamiliar with betting exchanges to understand. The format is much like what you'd see at traditional bookmaker's Web site.

"We are the first exchange to have this offering," Delaney said. "We are able to combine the allure of a P2P exchange with the simple understanding of traditional sports betting."

As with any betting exchange, Delaney pointed out, liquidity is the key to success.

"Our current and new members will benefit greatly from the acquisition," he said. "The odds will be better and the technology is the most robust in the industry."

Delaney said everyone involved is optimistic about what lies ahead for both sites.

"Overall there will be more liquidity, more trading and more passionate opinions adding up to increased value and excitement for all," he said.