Taking on Twitter: Meet the man who wants to create a social network solely for sports bettors
“This is my fourth start-up,” says BettorOff founder and CEO Alex Dubin in conversation with iGaming NEXT. “I’ve had two successful exits and one epic disastrous failure that was so unbelievably bad that you could see it from space.”
Taking lessons from his past successes and hoping to avoid a collapse of intergalactic proportions is Dubin’s latest business, BettorOff. The start-up describes itself as an enhanced social media platform specifically designed for sports bettors. Users can carve out a name for themselves and make money in the process by becoming one of the app’s leading tipsters, although Dubin prefers the term “pros”.
How will it make money?
Sounds great, right? But with Twitter losing an estimated $4m a day according to its new owner Elon Musk, how does BettorOff – a platform with some 11,000 users compared to Twitter’s near 400 million – make any money? In three simple ways, according to Dubin.
Eventually, the site will take a cut from each of the pro channels. BettorOff will serve as the merchant, similar to big-tech success story Uber. Initially, however, everything will be free as the platform tries to scale and build an engaged community. “For now, we’re returning 100% of the revenues back to the user because we want them as incentivised as possible to keep on picking and inviting,” says Dubin.
The second revenue channel is affiliation, or directing players to bookmakers for a fee. The company is looking to appeal to bettors on the sharper side that search for the best odds. Its Best Odds feature – similar to the Oddschecker Grid in the UK – will show users where to get the best bang for their buck on a specific wager. BettorOff will then receive a set payment from the sportsbook operator for each successful sign-up. “This is how Action Network gained a massive part of its value before it was acquired for a quarter of a billion dollars,” says Dubin, referencing Better Collective’s $240m buyout of the company in 2021.
“I don’t love the optics for a platform like ours of sharing in the losses of our consumers. It seems antithetical to what we’re trying to achieve.”
“We don’t share in losses; we get a strict CPA,” Dubin explains, predicting the next question. “I don’t love the optics for a platform like ours of sharing in the losses of our consumers. It seems antithetical to what we’re trying to achieve.”
The third potential cash cow – and the holy grail according to Dubin – is data. The company wants to analyse the behaviour of its users to spot patterns and sell them to sportsbooks. BettorOff has the advantage of being able to go live in every US state as it is not bound by sports betting regulation. This could prove particularly valuable to operators as new states open up for real-money online gambling. As we head towards 2023, sports betting launches are already on the horizon in Maryland and Ohio, and BettorOff’s data could give prospective operators a leg up on the competition.
Dubin admits the value of data is directly correlated to scale. The platform will struggle to draw any concrete conclusions with 11,000 users, but it has big aspirations. “Data I personally think is going to be the big one,” says Dubin. “But you can’t draw inferences from 10,000 people. You get up to 100,000 people, then great, but seven and eight figures is where statistical modelling really starts to shine,” he adds.
Beyond data for sportsbooks, BettorOff plans to use the data as a potential tool to help its own users make smarter picks, allowing its customers to share in the advantages of data collection. The firm will aggregate its conclusions and offer editorial insights to their community.
Like any content-led business, BettorOff must tread a tightrope between making money and providing the best value to its users. Implementing adverts as a revenue stream without ruining the UX or alienating your audience is never straightforward, as any decent online publisher knows. BettorOff is in a growth phase and building a loyal base is its number one priority in the short term, which is why Dubin has made the executive decision to keep the platform ad-free until at least 2024.
“With pushing ads, especially on a mobile-first platform, you’ve got to be very, very careful,” he warns. “If you’re just bombarding users to the point they feel like a walking ad target, then they’re going to leave you behind.”
What about the little blue bird in the room?
Building a transparent, tailor-made social network for sports betting makes sense, but the obvious challenge for BettorOff will be persuading bettors to switch from Twitter. The sports betting community is already deeply ingrained into one of the world’s largest social networks, and consumer habits are hard to shift.
Dubin refuses to see this as a negative and believes it proves BettorOff’s use case as a business, working as the perfect pitch to investors. “Our challenge as a business is going to be locating our audience to send them our message, but the fact there is no specific solution for that is exactly what we’re trying to solve.” If an advertiser or an operator wants to reach an engaged audience of sports bettors, then this is exactly what BettorOff can provide. “Hey guys, here is a platform that is 100% your target demographic,” Dubin explains. “It’s interesting that our goal is to solve a hurdle that we are now facing ourselves.”
As a start-up, BettorOff is yet to properly turn the dial on marketing, although it did put out a World Cup press release in November based on an in-house survey of US betting habits. It eventually intends to reach bettors with targeted ad spend and via partnerships with both sports teams and sportsbooks, but has not yet spent a penny in this space.Dubin concedes this will make it difficult to challenge Twitter, which has unlimited pockets by comparison and an established global brand. But despite the business model, he isn’t trying to outdo the social network, and will in fact lean into some of its features. For example, BettorOff has integrated an API that will allow users to post their picks straight to Twitter. There is space for both to co-exist, and BettorOff can benefit from Twitter’s scale to begin with, says Dubin. “While I think it’s fair to say we’re taking on Twitter in the sports betting information sector, we are not trying to pull our users off Twitter.
“Twitter is an incredible networking tool. If your growth story is based on knocking off Twitter, I think you have a heavy lift,” he admits. Users posting their picks and winners on Twitter will be an essential – and cost effective – way for BettorOff to spread its message. “Rather than fighting against them, we like the idea of utilising that type of media, whether it’s on TikTok, Instagram or Twitter,” says Dubin.
From one extreme to another
BettorOff has crammed plenty of history into its short lifespan. Dubin formed the company in the summer of 2020 at the peak of the Covid-19 pandemic. As normal life disintegrated and Covid destroyed sections of the retail economy, the online gambling industry flourished, and valuations for US operators reached their absolute peak. It was the perfect environment for raising capital – in stark contrast to today, where macro factors have restricted cash and investors have tightened their purse strings.
Dubin has the perfect professional background for raising capital. In his early career, he spent more than two years with DLA Piper in New York as an attorney, working directly under the firm’s global head of funds. His first company NXTAKE – an esports-focused sports data and analytics business – was acquired in a merger with SportsGrid back in 2017, where he later joined the board of directors and at one point served as acting COO and general counsel.
He is quite literally more invested than most in the success of BettorOff. Not only is Dubin founder and CEO, but he personally invested in the company’s initial raise, which Dubin dubs the “crazy vision round”. “I think it’s vital that founders have real skin in the game” says Dubin.
Recent developments have shown investors are keeping their cards close to their chest in the real-money online gambling space. Las Vegas Sands folding its online investment arm is a prime example of that. But back in 2020, you only had to whisper the words “sports betting” and you would be showered in dollar bills like Scrooge McDuck.
“When classic markets take a hit, you need to look at alternative assets so that nothing happens if gas goes up or if the housing market craters.”
Dubin, however, believes the effects of the macro squeeze on the space are overstated. “There is still a tonne of dry powder out there, especially in the venture world,” he says. “When classic markets take a hit like they are now, you need to look at alternative assets so that nothing happens to them if gas goes up by $3 or if the housing market craters. There are certain industries that are virtually recession proof, and sports betting has always been one of those,” he proclaims.
The US operators that BettorOff hopes to one day count as clients might disagree, however. DraftKings’ stock has nosedived by 60% on a one-year basis; Caesars is down 49% over the same period. While the macroeconomic environment unarguably played a part, the downturn also coincided with increased investor interest in the profitability of US sports betting firms. Post-PASPA, profits were consigned to the “we’ll worry about it later” pile, but in recent months, investors have demanded more concrete guidance. They all want to know exactly where that inflexion point is on the timeline before parting with their hard-earned cash.
Stockholder appetite has shifted significantly from speculative growth stocks to sure things and done deals, and profitability is now being used as the barometer of success. This could make a sale, and eventual exit, more unlikely for start-ups in the top-line growth phase, such as BettorOff.
Exit through the gift shop
But is Dubin actively seeking a sale? “That’s the question that any founder must tackle,” he says with a wry smile. He has learned several lessons from his previous companies, which he exited to varying degrees of success. He now looks for three things when starting a new business: Is the sector growing? Is it monetisable? Are there acquirers out there?
In US sports betting, the answer to all three of those questions is yes, and Dubin is smart enough to know there is a diversified base with deep pockets looking to buy into the space, from operators and affiliates to venture capitalists and private equity funds.
For now, at least, Dubin’s focus is on execution and providing the best UX. “My belief is that if we concentrate on that, then acquisition offers, partnership offers, and all of those things that we want to happen financially, will come.”
Dubin’s first task will be to ensure that his valuable target demographic is genuinely better off on BettorOff than elsewhere.
There is no guarantee it will work, but solid foundations have been laid. Dubin, who has been in this position before, says: “I’m confident that if we execute following our guiding principles, then the growth will take care of itself.”