This term, the U.S. Supreme Court will hear a case that concerns whether a 1992 federal law that prohibits that vast majority of U.S. states from offering sports betting should survive a legal challenge. While many people are fixated on predicting what the highest court in the U.S. will decide, few are using it as an opportunity to build new businesses on the back of the possible change in federal law.

But Bullpen Capital's Paul Martino refuses to sit on the sidelines. An investor in FanDuel, DerbyJackpot and Zynga, Martino knows a thing or two about the gaming space, particularly when it comes to fantasy sports. And he believes that there will be ample opportunities for innovation should sports betting be permitted throughout the U.S.

Martino is not waiting to see what the U.S. Supreme Court chooses to do with the existing prohibition. Instead, he recently put $1 million into a stealth project to hire 6-8 people and see what kind of unique creations they can figure out in an ecosystem that allows for sports betting. It's the kind of thing you would normally do at the seed stage of a startup.

"In general, our firm invests in later phases," says Martino. "But when you're in an entity like FanDuel, you get a pretty interesting purview into how it can be changed if the law changes."

Martino is convinced that most people are salivating over the prospects of taking what has worked in sports gambling in Europe and bringing it to the general public in the U.S. He thinks that is not the proper plan.

"You're going to miss the boat. The boat is something no one has done yet," says Martino. "When you're doing a startup, go swim in the right pond. I am positive I'm in the right pond on this."

Around June 2017, Martino spent about a month putting together some ideas. He ran a focus group with a bunch of women who wanted to put $5 on Tom Brady, with one person stating, "I don't know what that means, but he's cute." Martino does not yet know the mechanics of what he can offer that person, but he is sure that there are others in a similar situation who will be interested in spending their money.

"I don't know what formats will look like or who the audiences will be," admits Martino. "A year from now we could be seeing some of the coolest formats that we've seen in the U.S. You may be able to bet on in-game outcomes combined with individual player statistics."

Even if the federal sports betting ban is not repealed, Martino believes it is worth it to start exploring possibilities in the space. He mentioned that he recently had a discussion with FanDuel head Nigel Eccles and asked him what he would buy if sports betting became legal throughout the U.S. Martino was most interested in how empty Eccles' list was and it convinced him that he needed to build the thing that Eccles would want to buy.

"If we know what people are interested in purchasing, that project, while not being able to launch legally yet, will probably be worth the cost of admission,," says Martino. "At some point there will be larger scale legalization and regulation in the same way that happened to daily fantasy sports."

It's an opportunity Martino is not willing to risk staying away from.

"There's so few times in startup life where there's such a monumental event that can completely change that landscape," says Martino. "Most people don't think about it this way and they miss the boat."