First Cocks, Then Stocks

Inspired by the vision of chickens fighting, a new website offers the same excitement found in cock fighting arenas but instead of betting on which gamecock will win, punters put their money down on their favorite stock of the day.

The Sweden-based VersusMarket has developed an exciting new system that allows users to bet on individual stocks, which compete against other designated stocks.

The company’s cutting edge betting platform came about as its co-founders were vacationing in Thailand entranced with the excitement of the cockfight.

It was the model of the cockfighting ring and all of its excitement that is the basis for the VSMarket.com.

"Just like sitting in the cockfighting arena and watching the action, once you place your bets you can sit back and watch the stocks go at it with each other," said VSMarket CEO Gustaf Hagman. "Instead of cocks fighting against each other, we sat and wondered how we could take that into the stock market and have two different stocks competing against each other."

The system Hagman and his crew came up with is based much like what bettors see when they go to the track for dog or horse races.

"The races are very similar to a daily double at the race track," Hagman said. "Instead of horses we have stocks. You have to pick one of the winners in each heat and then you have the matches which are head to head."

VSMarket.com enables users to bet on NASDAQ or NYSE stocks in head-to-head heats or group contests of nine different "races." Stocks such as SUN do battle with IBM while Motorola matches up against Nokia, and users pick who they like for the day. All bets are placed prior to the market opening and last for one day of trading. By the end of the day whichever stock performs better wins.

Hagman said the system allows for betting action regardless of how well the market is performing. Therefore the site can attract a steady stream of business regardless of market conditions; people can still make money if a stock goes into the tank.

"We kind of have the same steady curve going up," he said. "If both of the stocks are going down, the one that goes down the less is the winner. You still have a winner regardless of what the market does."

VSMarket.com’s approach, and its ties to the cockfighting industry, has lead to some unique comparisons with the site and other sports.

"You make your bet before the stock market opens and then you can actually watch your bet in our arenas," he said. "People tend to call us the Don King of NASDAQ. We have the arena, we put up the contenders and we provide them with the bets."

VSMarket.com launched in the United States last month. The official launch came after a trial run in the United Kingdom. Hagman said bettors have been very open to the new idea.

"The response has been very, very good," he said. "We put up a test site in the U.K. for three weeks and we did very well. We tried to see what people said about the site and redid some things with it and opened for the U.S. market in early February."

VSMarket has been able to weather the initial storm of a rough market that has arisen over the past couple of months. Hagman said unlike other hobbies people tend to gamble more when things aren’t going their way.

"The gaming market is kind of opposite when it comes to traditional games," he said. "When the economy goes bad, or something goes bad for someone, people tend to play more. We are based on the stock market but we don’t see a lowering interest when the market is bad, but on the other hand we don’t really see an increase when the market is up either."

Like any interactive gaming service, VSMarket has been able to keep first-time users coming back, but the thing that tends to bring gamblers back is how well they do.

"We have a lot of people who try it for a couple of times and stay," he said. "Most of the people who win, continue to keep playing."

VSMarket decided from the start that it wouldn't sink a lot of money into an advertising campaign; instead it hoped word would spread on its own. They took a gamble, and so far it is paying off.

"A lot of people invite their friends to come in and play," he said. "Right now we are averaging about 2.7 invites per player that comes to our site. We didn’t want to spend a whole lot of money on a huge advertising campaign. We wanted to do it by word of mouth and learning about our customers."

Hagman figures they are doing something right to get that kind of word of mouth from their users.

"They must like it or they wouldn’t be inviting their friends as much as they do," he said.

Despite being a little more than a month old VSMarket already has plans on expanding.

"Right now we are very, very busy with the U.S. market," Hagman said. "The next thing we will probably do is launch in the U.K. We will open up in London, we just don’t know when. Then we have a lot of people looking at us and wanting to do something with us in Asia. Asia is a very interesting market."