For Betr or for Wrse: Are US sports and micro-betting really a match made in heaven?
When the launch of new micro-betting operator Betr hit the headlines last week, it caused quite a stir in iGaming industry circles.
Not only is the product backed by the often controversial but hugely popular Vine-creator-turned-Disney-Channel-star-turned-social-media-influencer-turned-pro-boxer-turned-betting-operator-founder Jake Paul, it also made some pretty bold predictions about the future of sports betting in the US.
US sports betting’s next big thing?
Chief among those predictions was the claim that “micro-betting will ultimately emerge as the predominant way consumers bet on US sports.”
That belief stems from the rhythm and cadence of sports such as baseball, American football and basketball, where a stop-and-start nature means they lend themselves more readily to micro-bets on discrete events within games. This is especially true when compared to “soccer” for example, which is currently the predominant sport in betting markets across the globe.
Sporting nomenclature notwithstanding, Betr could well have a point here.
Speaking to iGaming NEXT, venture capitalist and managing partner of Sharp Alpha Advisors Lloyd Danzig said: “Soccer is a low-scoring game with a continuous clock, minimal stoppages, and far fewer discrete events as compared to the most popular US sports. Basketball, baseball, and American football appear to be especially well-suited for micro-betting.”
Daniel Graetzer, CEO of MaximBet, agreed, stating: “It works for [American] football. Is the next play going to be a run or a pass, for example. And basketball – is the next basket going to be a two-pointer or a three-pointer – so sports with more action or plays create more betting opportunities overall.”
Acies Investments co-founding partner Chris Grove: “Micro-bets can be a meaningful contributor to the growth of sports betting without climbing to the very top of the food chain.”
Questions remain, however, over the future size of the micro-betting market in the US and whether it will live up to Betr’s bold claims. If micro-markets don’t become the predominant form of US betting, many within the industry are still predicting the brand could shake things up.
“I don’t think micro-betting necessarily has to become the predominant form of betting for what Betr are doing to be successful,” said long standing industry investor and principal at Avenue H Capital, Benjie Cherniak (who also owns a stake in Betr following its Series A investment round).
“I think it just needs to become a significant part of the story, which I believe it will be in time,” he added.
Co-founding partner of Acies Investments, Chris Grove, agreed with this cautious approach, stating: “I suspect it will be quite some time before ‘traditional’ bets on game outcomes and totals are displaced as the primary generator of betting volume.
“But it’s not an ‘either/or’ question. Micro-bets can be a meaningful contributor to the growth of sports betting without climbing to the very top of the food chain.”
The kids are alright
One way micro-betting could help to grow the overall US sports betting market is by engaging with a new generation of potential punters.
As well as being better suited to the most popular US sports, prevailing wisdom states that micro-bets are more likely to appeal to a younger audience, which would not otherwise engage with the sometimes complex world of traditional sports betting.
Paul referred to Betr as the “TikTok-ification” of sports betting, with the product aimed at an audience with short attention spans due to social media. Why would anybody wait until the end of a game to find out whether their bet was a winner?
NB: with the average NFL game broadcast reported to last for three hours and 12 minutes – with the ball in play for a mere 11 minutes of that total – one can hardly blame the next generation of punters for wanting to hurry things along.
Cherniak recognises this reality. He told iGaming NEXT: “Attention spans are shortening. Paul’s audience and an emerging generation of sports enthusiasts are growing up with TikTok and related forms of bite-sized engagement. And I don’t think that the current sportsbook experience caters as well as it can to that audience.
“I don’t think betting is a one size fits all experience. But I do believe that micro-betting and betting on moments within the game is better suited to the next generation of punters – who are more social media driven – than what we offer currently,” he added.
When it comes to bringing a new generation of punters into the world of betting, the micro-bet format is not the only string to Betr’s bow. The other relies on co-founder Paul himself, as well as a slew of other social media influencers and a soon-to-be launched Betr media channel.
Let’s take this online
In addition to shining some additional light on micro-betting, Betr also proffers an insight into an emerging business model – and one which could certainly have a lasting impact on the world of sports betting – via the combination of its sports betting business with a separate media arm.
Of course, that combination is nothing new and is a model pioneered in the US by Penn Entertainment through its acquisition of sports media businesses Barstool Sports.
The world has been watching for over four years now as major US operators such as DraftKings, FanDuel and Caesars have together poured billions of dollars into advertising and marketing designed to help them acquire customers in the emerging US betting market.
Avenue H Capital principal Benjie Cherniak: “This isn’t just about sports betting. It’s about redefining and recreating the sports engagement experience and how we consume sports media and content.”
By using the power and reach of social media (Paul alone has more than 20 million subscribers on his YouTube channel and a comparable number of followers on Instagram), firms like Betr may have the opportunity to bypass extraordinary customer acquisition costs and get their brand in front of customers for a fraction of the price.
In addition to cutting down on marketing costs, this strategy has the added benefit of being more likely to appeal to a younger audience than traditional sports media, by meeting viewers where they reside – online and consuming video content made by their favourite social media curators.
Cherniak commented: “This isn’t just about sports betting. It’s about redefining and recreating, to a certain extent, the sports engagement experience and how we consume sports media and content.
“It’s about recreating the way in which a user is engaged so as to be more in tune with the preferences and habits of an emerging generation of sportsbook consumers,” he added.
If a little is good, more must be Betr
While Betr may be the first US operator to focus exclusively on micro-betting, it’s clear that the firm will not hold a monopoly on the format.
Graetzer pointed out that: “Micro-betting is not new, and in fact it’s something many operators already readily have available. We [at MaximBet] are currently rolling out our new micro-betting product which will be available very soon to our players. ‘Player props’ in particular are becoming more and more attractive to bettors, especially on in-play markets.”
DraftKings for example has already struck up a partnership with Simplebet to manage its micro-betting markets. Simplebet is the company founded by Betr co-founder Joey Levy. Indeed, Betr will be built on the firm’s B2B technology.
“Operators are already looking to expand their micro-betting menus,” admits Grove, who suggests success for Betr may accelerate adoption.
As for benchmarking the success of the emerging brand, Grove added: “Barstool feels like the most reasonable comparison for Betr. I think most industry watchers will assume that Barstool will serve as a baseline for Betr’s performance on a like-for-like basis.”
Is this the first ever underwater bet? pic.twitter.com/6sYEzIaV0v
— betr (@betr) August 15, 2022
Indeed, it will be interesting to see how Betr shapes up against its competition and how it adapts to future changes in the market.
Initially, a free-to-play version of the app is planned for launch across all 50 US states, after which time Betr will inevitably begin the process of gathering customer data on popular markets and player preferences.
Cherniak said: “Like any business aiming for exponential growth, they will need to be flexible in how they approach this thing. There is a clear gameplan today but they are smart enough to pivot and adjust as required, as they determine what this audience of theirs is consuming.”
True enough, but until the launch of real-money sports betting – for which Betr said it has already secured market-access agreements in several states – the brand’s potential still remains to be seen.
To put it another way: things can only get better for Betr.