Sharp Alpha’s Lloyd Danzig Dishes on Prediction Markets After VC Firm’s Launch of New $150M Fund

Prediction markets are all the rage these days, helping usher in a new era of disruption for the US sports betting industry. Everybody seems to want a place in the emerging space.

Count Sharp Alpha Advisors Managing Partner Lloyd Danzig among that growing group. The New York City-based venture capital firm, known for its strong track record in sports betting and iGaming investments, announced the launch of its Sharp Alpha UA Fund I this week. After raising $150 million, it will focus on prediction markets, online gaming, and sports media, among other sectors.

The fund will deploy “non-dilutive capital” over the next two years to help upstart companies in those sectors increase customer acquisition. With this type of funding, a company doesn’t give up any ownership equity.

“Unlike traditional equity or venture debt, cohort-based financing aligns capital deployment directly with customer acquisition outcomes,” Danzig said. “This structure preserves ownership, avoids restrictive covenants, and scales with company growth.”

Bullish on Prediction Markets: Danzig Goes 1-on-1 With CasinoBeats

Danzig, who will manage the new fund, took time out from a busy week to discuss the phenomenon of prediction markets exclusively with CasinoBeats.

CasinoBeats: Things are moving rapidly in the industry, with more and more companies entering or planning to enter the prediction market space. How surprised are you with the pace of growth? 

Danzig: “People love having skin in the game. Nothing will matter more in the consumer landscape over the next 10 years than what captures our attention. And nothing captures our attention like having a vested interest in uncertain outcomes. While the pace of regulatory evolution has surprised many with respect to prediction markets, we do not find the level of demand or volume surprising at all. Quite the contrary, it’s clear to us [that] this is just the beginning.”

CasinoBeats: What are some of the advantages of trading sports event contracts versus traditional wagering at sportsbooks?  

Danzig: “Advantages of event contracts over traditional fixed odds wagering include real-time exit liquidity, guaranteed two-way markets, generally lower hold rates, and a lack of restrictions against sharp players.”

Casino Beats: Should consumers view prediction markets as additive, as opposed to a replacement for sportsbooks? 

Danzig: “The distinction between prediction markets and sportsbooks may be a lot less clear not too long from now.”

CasinoBeats: DraftKings and FanDuel (Flutter’s) stocks took a hit last week. How concerned should these operators and their investors be about the rise of prediction markets? 

Danzig: “The stock market consistently proves itself to be undereducated and overly reactionary when it comes to digesting sports betting industry news.”

CasinoBeats: How concerned are you about possible regulatory changes on how sports contracts are viewed? 

Danzig: “The ebb and flow of regulatory tides is a constant force in the real-money gaming innovation cycle. We see upcoming regulatory changes, not just in the US but around the world, as major opportunities rather than challenges.”