US microbetting specialist Betr has signed a technology integration and media partnership deal with WagerWire.
What is WagerWire?
WagerWire is a sports betting marketplace developer which “empowers bettors to take control of their action and treat their bets as assets that can be bought and sold at any time.”
The company’s proprietary marketplace technology can be directly embedded into sportsbook apps, and is also available through WagerWire’s own app, which serves as an aggregated marketplace of bets across partner sportsbooks.
In addition, WagerWire also runs its own media network that generates sports betting content daily across a variety of social media.
Integration with Betr
Betr’s partnership with WagerWire is intended to further differentiate the operator’s product offering “in an industry inundated with commoditised products,” WagerWire said.
Having first launched with a laser focus on microbetting markets, earlier this year Betr integrated traditional core betting markets into its offering in order to bring its product closer in line with what its competitors offer in the US.
Now, the integration of WagerWire will position Betr “to vault ahead of the field by becoming the first to combine the trifecta of microbetting, traditional, and secondary markets,” the firm said in a statement.
In addition to the integration of secondary betting markets, Betr and WagerWire will also collaborate on new media projects, kicking off the partnership by co-producing their first original video series this year, with other projects still to follow.
“While secondary markets are commonplace for things like concert tickets, trading cards, and even fashion, it has yet to exist at scale in sports betting – until now,” said WagerWire co-founder and CEO Zach Doctor.
“We have great admiration for what Joey Levy, Jake Paul and the entire team at Betr have accomplished as both a gaming operator and media company.
“WagerWire’s technology creates a new category that supercharges the fan experience. Sports betting should be as fun and exciting as the sports themselves,” Doctor concluded.
Betr founder and CEO Joey Levy added: “We are excited to partner with the WagerWire team, who shares our perspective that there is a significant opportunity to enhance the sports betting user experience through product innovation.
“We are looking forward to integrating their technology into our new V1 sportsbook platform being built on top of the recently acquired Chameleon platform, which remains on track to go live next year.”
The Advertising Standards Authority (ASA) has reminded Ladbrokes owner Entain that it must not include figures likely to be of strong appeal to under-18s in gambling advertising.
The reminder comes as the ASA ruled that a previous ad sent out by Ladbrokes on Twitter must not appear again in its current form.
The promoted tweet was seen in February 2023 following a bout between social media influencer and boxer Jake Paul and sporting rival Tommy Fury.
Following the match, Ladbrokes asked its followers in a poll: “What’s next for Jake Paul?”, with options to vote on “Win the re-match”, “Head to the MMA”, “Return to YouTube”, and “Join the WWE”.
When challenged, Ladbrokes defended its corner by saying that the ad was published after the fight had taken place and featured no calls to action, promotional offers or links back to its website.
It added that its Twitter feed and respective tweets were age-gated and could not be accessed by users unless Twitter had assessed their age to be over 18.
Further, it argued that boxing is an adult-oriented sport and is not listed as being of moderate or high risk in terms of its appeal to under-18s in the UK Code of Non-broadcast Advertising and Direct & Promotional Marketing (CAP Code).
The operator said it also assessed Jake Paul’s follower demographic before publishing the ad to assess the level of risk, and considered that he “did not have a significant role in boxing or general profile within the sport and that his current partnerships were with an alcohol brand and cryptocurrency businesses.”
The operator did acknowledge, however, that Paul has a following among under-18s on some social media platforms (13% of his Instagram followers, 16% of YouTube subscribers and 18% of TikTok followers are aged between 13 and 17).
But, it argued, 0% of Paul’s followers on Twitter were registered as being under 18.
In response, the ASA restated that the CAP Code says marketing communications for gambling products “must not be likely to be of strong appeal to children or young persons, especially by reflecting or being associated with youth culture.”
Because the ages of Twitter users are not robustly verified by the platform, it argued that the ad would have needed to comply with the above rule to be deemed acceptable.
CAP guidance adds that “sportspeople involved in clearly adult-oriented sports who were ‘notable’ stars with significant social media and general profiles which made them well-known to under-18s was considered moderate risk in terms of how likely they were to be of strong appeal to under-18s.”
Therefore, despite boxing being considered an adult-oriented sport, the use of Jake Paul was deemed inappropriate given he was “primarily known for making YouTube videos and that he had a large social media following.”
The ASA said that Paul had more than 3 million subscribers or followers aged under 18 on each of YouTube, TikTok and Instagram, while also noting his former role on children’s TV programme Bizaardvark between 2016 and 2018 on the Disney Channel.
As a result, the authority deemed the influencer to be of inherent strong appeal to under-18s, and condemned the ad as “irresponsible” and in breach of the CAP Code.
Jake Paul vs. Chris Eubank Jr.
The ruling stands in contrast to another recent case judged by the ASA, in which a bet365 ad featuring boxer Chris Eubank Jr. was deemed to have no strong appeal to minors.
Commenting on the two cases on LinkedIn, White Hat Gaming legal counsel Joseph Masini suggested that “the very different outcomes serve to further shed light on the multifaceted nature of ‘inherent appeal’ and what marketers should consider when featuring sportspersons in their campaigns.”
Given the similarities of both cases – namely that they referred to the use of professional boxers, operator posts on Twitter, and considered the risk (or lack of) towards minors – Masini said the core differentiator was the so-called “inherent appeal” to under-18s of each sports star.
The social media following of each boxer was considered to be a key element in deciding whether or not they represented a high risk to minors.
In Eubank’s case, a lack of followers aged under 18 was used to argue that the boxer had no inherent appeal to minors, while Paul’s large following among children was considered a key determining factor in the ASA’s decision.
“Audience demographics, cultural relevance, overall fame and notoriety, and recent exposure are all key components in determining the ‘inherent risk’ of any public figure,” commented Masini.
“There’s been much talk about the largely undefined nature of this concept, but it’s clear that the lack of prescriptiveness in the Code and guidance is purposeful to allow for case-by-case determinations in what is a very complex environment marked by multiple engagement platforms and potential sources of fame, relevance and following with young audiences,” he concluded.
Jake Paul and gambling
Within the gambling sector, Paul has recently become known for his involvement with microbetting-focused operator Betr in the US, of which he is a co-founder.
While advertising rules in the US are generally less strict than those in the UK, the ruling throws up questions for the future of Paul’s betting business.
Betr not only offers betting operations to its customers, but also runs a media company focused on incubating the next generation of online influencers.
Paul’s high profile on social media is one of the brand’s key strengths, but this ruling could bring into question the limitations of such a strategy.
The operator’s use of social media for brand awareness is intended to provide it with “low-to-no customer acquisition costs,” according to Betr co-founder Joey Levy.
Last month, Betr secured an additional $35m in funding intended to help it launch two new product verticals in the coming months.
Betr has raised $35m in a Series A2 round of financing as it gears up to launch two additional verticals in the coming months.
The start-up is valued at $300m pre-money following the latest raise. A pre-money valuation refers to the value of a company before it goes public or receives other investments, such as external funding or financing.
The Series A2 round was co-led by Roger Ehrenberg of IA Sports Ventures and Eberg Capital, along with Fuel Venture Capital. Fuel has expanded its investment in Betr from $10m to a total of $20m.
Betr co-founders Joey Levy and Jake Paul also participated in the round, along with major existing investors such as FinSight Ventures, Florida Funders, and Aliya Capital Partners, who have significantly increased their investments beyond their pro rata.
“Joey, Jake, and the incredible Betr team are truly creating something remarkable,” said Jeff Ransdell, founding partner and managing director of Fuel Venture Capital.
“They are addressing a genuine need in the sports media and betting world, catering directly to the end consumer.
“The overwhelming demand from investors wanting to join this journey is a testament to the validity and promise of what they’re building,” he added.
Initially, Betr offered a microbetting-only product, which allowed users to place bets on individual plays and micro events in sports.
However, the company has recently expanded its product offering to include additional betting markets and full sportsbook capabilities.
Betr Gaming is currently licensed and operational in Ohio and Massachusetts, with plans to launch in Virginia soon.
The company also holds market access in Indiana and other jurisdictions that will be announced in the near future.
Two new verticals
Betr is set to unveil two additional real-money gaming verticals in addition to sports betting over the coming weeks and months, one of which is likely to be iCasino.
The company recently acquired the Chameleon platform from FansUnite, which will enable the launch of Betr Betting V1, the company’s online sports betting product with full sportsbook capabilities.
The Chameleon platform will also support the two additional real-money gaming verticals that Betr plans to launch. The acquired software includes a PAM and online casino management services.
Meanwhile, Betr’s media division, Betr Media, surpassed 1.3bn impressions on social media in its first 10 months.
The division focuses on creating original and short-form content and targets the 21- to 34-year-old male demographic.
“I am thrilled to announce our Series A2 round of financing, which we opportunistically raised after successfully laying the foundations for Betr Gaming and Betr Media while validating some of our core theses,” said Betr founder and CEO Joey Levy.
“Our ability to rapidly scale Betr Media’s audience, and then convert this audience to Betr Gaming at low-to-no customer acquisition costs (CAC), will enable us to have the best unit economics in the regulated real-money gaming industry, positioning Betr to create more value than incumbent operators over time,” he said.
Levy also highlighted the three pillars of Betr’s business: firstly, low-to-no CAC supported by social media expertise; secondly, strong user engagement and retention driven by brand affinity and a unique product, and lastly, a focus on responsible gaming.
Betr Gaming has banned credit cards as a deposit method for all users, while imposing monthly deposit limits for young consumers aged 21-25 years old.
Betr has marked its second US market entry with the launch of real-money gambling in Massachusetts.
The Jake Paul and Joey Levy-backed brand is the seventh operator to enter the Massachusetts online sports betting market following its launch in March.
Betr follows FanDuel, DraftKings, BetMGM, Caesars, WynnBet and Barstool as the only other regulated online sportsbooks in Massachusetts.
Betr launch background
Betr first launched real-money gambling in Ohio in January on a microbetting-only basis by offering ‘multiple choice’ style bets on markets such as NBA possessions, NFL drives and ‘every at-bat’ in MLB.
In March, the brand introduced core markets to its sports betting offering to coincide with the NCAA basketball March Madness tournament, broadening the product and placing it on a more even footing with traditional bookies.
The start-up has suggested it will eventually be targeting market entries in upwards of 30 US markets.
It has already received approval for its launch in Virginia, which is expected to mark its third market entry this year.
Stick to the Scripts
Alongside its Massachusetts launch, Betr is also soft launching a new product called Scripts, which it said “combines the instant gratification of a microbet with the long odds of a parlay.”
Betr described the product as a first-of-its-kind experience, which effectively introduces instant gratification to parlays.
“We are thrilled to launch Betr Betting in Massachusetts, home of some of the world’s greatest sports franchises and fans,” said Betr founder and CEO Joey Levy.
“We will be just the seventh operator to enter the state, only trailing FanDuel, DraftKings, BetMGM, Caesars, WynnBet, and Barstool to market. Not bad for a company that launched less than a year ago with vastly fewer resources than pretty much all industry incumbents.
“We would like to thank the Massachusetts Gaming Commission for their partnership and we are excited to introduce Betr to the commonwealth’s top notch sports ecosystem.”
Betr will celebrate market entry with a launch party in Boston, alongside “content takeovers” at bars, sporting events and more in the coming weeks.
Chameleon to help Betr stand out
The operator said it has demonstrated strong audience-to-product conversion since launching in Ohio, with more than 20% of its in-state media audience organically converted to the real-money platform.
Earlier this week, the business announced it had acquired the source code for FansUnite’s Chameleon online gambling platform, which already provided the PAM system for Betr’s operations.
On announcing the deal, Betr CEO Levy said the purchase would allow the business to begin developing ‘V1’ of the full-suite Betr product as it branches out into online casino.
The product it launched in Ohio earlier this year was so-called ‘V0’ and was designed to build its user base, gather feedback and prove its concept to the market as quickly as possible.
Organic approach to marketing
In addition to its novel product offering, Betr boasts a markedly different marketing strategy to its competitors.
Speaking to the Boston Globe, co-founder Jake Paul explained how Betr’s social media knowhow has helped the brand cut through in a different way.
“When you see the amount of money that DraftKings, FanDuel, and all these companies are spending, it’s on marketing and advertising, just throwing billions of dollars at the wall to see what sticks in inauthentic brand campaigns – like Joey said, [they’re] advertising like insurance companies but less funny,” he said.
“And that’s just not the way to go about things in today’s landscape.”
Instead, Betr relies on Paul’s online audience, consisting of more than 65 million social media followers across Instagram, YouTube, TikTok, Twitter and Spotify, to reach potential sports bettors.
The brand also runs a separate media division (Betr Media) specifically focused on influencers, which Levy has previously said is designed to “incubate the next dozen ‘Jake Pauls’”.
Indeed, Paul told the Globe: “Since day one, we’ve always been like this is not just going to be Jake Paul posting everything and doing all these things. The goal is to create something bigger than myself, to use me as, like, the launching platform.”
As part of that strategy, Betr Media last month secured an exclusive partnership with high-profile social media and US college basketball stars, the Cavinder Twins.
Microbetting start-up Betr has entered into a definitive asset purchase agreement with FansUnite for the source code related to its Chameleon online gambling platform.
Chameleon is a GLI-approved iGaming platform offering player account management (PAM), a sports betting engine and online casino management, enabling companies to launch and operate their own sports and iGaming brands.
Under the terms of the agreement, Betr will acquire the platform’s source code as it currently exists, while FansUnite will retain the use of the platform and source code, as well as the ability to further maintain and develop it.
Further, FansUnite retains the ability to sell any future improved versions of the platform to another buyer in the future. Future sales would not include any enhancements made to the platform by Betr post-close.
Betr will acquire the platform for total consideration of around C$10m, comprising C$3m in cash upon closing and C$2m in Series A2 preferred shares in Betr, to be settled through warrants.
Further milestone payments worth C$5m will be payable over 12 months following the close of the transaction, upon completion of certain integration milestones, and will also be divided into C$3m in cash and C$2m in warrants to purchase preferred shares in Betr.
FansUnite and Betr background
At present, FansUnite provides the PAM system for Betr’s operations, which it said makes Chameleon an “excellent fit” for Betr’s long-term strategy of owning its own technology platform.
Betr has also engaged 28 FansUnite employees or contractors to continue work on the platform, while the parties have entered into a transition services agreement with respect to certain transition services to be provided post-close.
“This is a transformational transaction for FansUnite and we are excited to move forward as a business that is a dominant player in its sector with the ability to execute on a profitable growth strategy,” said Scott Burton, CEO of FansUnite.
“With the completion of this sale, we will reduce annual costs, ensuring we can execute on our strategy to generate positive cash flow this year.”
Betr CEO Joey Levy added: “This is a transformational transaction for Betr that enables Betr Gaming to fully control our ability to execute against our core strategy, while also capturing a material amount of gross margin for our business model.”
Levy also said the purchase will allow the business to begin developing its ‘V1’ of the Betr product, after launching its so-called ‘V0’ in Ohio shortly after the brand was first announced in order to build its user base, gather feedback and prove its concept to the market as quickly as possible.
“Finally, we are thrilled to have been able to execute this acquisition in a cost-effective manner consistent with how we have rolled out Betr Gaming and Betr Media from both market access and talent acquisition standpoints to date – by entering into strategic transactions that feature an equity component to align incentives with our partners who believe in Betr while helping Betr preserve cash,” Levy concluded.
Two sales in a week
The news of FansUnite’s sale of the Chameleon source code follows on from an announcement last week that it had secured a buyer for its wholly-owned subsidiary and Scottish-licensed online gambling operator McBookie.
After acquiring the business for C$2.2m in 2020, FansUnite agreed a sale of the business for more than C$5m in cash, to an arms length private buyer whose details were not revealed.
Upon the announcement of the sale, FansUnite pointed out that under its ownership, McBookie had delivered three consecutive years of revenue growth, with a gross win increase of 451% and a turnover increase of 305%.
Under the deal, directors Paul Petrie and Damian Walker will continue to serve as directors of the business.
FansUnite said a portion of the proceeds of both sales will be used to repay money owed to investment trust Centurion Financial Trust, reducing the amount of an outstanding loan by approximately C$5.5m.
“With both the recent sales behind us, we can focus additional resources towards our highest revenue and margin businesses, such as Betting Hero and the affiliate business,” said FansUnite CEO Burton.
“[Betting Hero is] a dominant operator in the live activation affiliate space, and has added two new business lines to its offering with Hero Hotline and Hero Research.
“Both new segments are gaining traction, and we believe they have the potential to be as successful as the primary business of Betting Hero while driving profitability for FansUnite,” he concluded.
Betr has secured an exclusive partnership with the Cavinder Twins, a pair of high-flying and high-profile social media and US college sports stars.
The 22-year-old sisters shot to fame as basketball players for the Miami Hurricanes but have decided to call time on their tenure at Miami to pursue other fame and business ventures.
The twins have amassed more than 4.5 million followers on TikTok and present the Twin Talk podcast on iHeartRadio.
That podcast will now head exclusively to Betr’s media division as part of a deal which also sees the Cavinder twins join up as equity partners, content creators and creative directors.
Everyone keeps asking what’s next?
The Cavinder Twins just got betr ⚡️@CavinderHaley @CavinderHanna pic.twitter.com/uuzMgYP1Jk
— betr (@betr) April 19, 2023
A Betr statement said the twins would become “foundational on-camera talent” for the company while helping to create female-centric sports and betting content.
Betr was co-founded and launched as a US online sports betting disruptor in August 2022 by Simplebet founder Joey Levy and social media personality Jake Paul.
Betr Media, which acts as a marketing subdivision for the sportsbook, has already generated more than 900 million impressions and 50 million engagements across its social channels.
In March, Levy told iGaming NEXT that Betr wanted to “incubate” the next dozen Jake Pauls. The Cavinder Twins joining ranks is arguably the first evidence of that strategy.
“We are thrilled to partner with the Cavinder Twins, who have already accomplished so much and are just scratching the surface of their potential,” said Levy in a press release.
Cavinder Twins agent Jeff Hoffman on the partnership with Betr: “It’s like adding jet fuel to an already burning fire.”
Levy said the company plans to leverage the rapidly growing Jake Paul and Betr Media audiences to make emerging talent even more famous, while also providing content development, production and media sales support.
“Betr Media’s objective is to attract, enhance, and amplify the next wave of generational content creators, and this partnership is a testament to that approach,” he added.
In April, the twins announced they would forgo their final year of college sports eligibility to explore other options, including a potential career in WWE.
Their agent Jeff Hoffman said Betr provided the perfect opportunity to grow the Cavinder Twins brand. “It’s like adding jet fuel to an already burning fire,” he added.
“With Betr’s media savvy, the explosion of female sports and Betr’s disruptive behaviour in gambling, it became a question of how far can we go and where do we sign?”
“After going through hard times, you really appreciate when things are going well,” says Simplebet COO Mark Nerenberg.
Those hard times occurred in 2019, one year after Simplebet was founded with the grand ambition to innovate the user experience of sports betting.
“We made some missteps and we tried to do too much,” admits Nerenberg.
In the early days, the company grappled with its own identity and was conflicted between B2C and B2B. Was it a consumer sportsbook or a solutions provider? Doing both is never easy; doing both well is hard.
“I wouldn’t say we were a joke, but we had some respect to gain,” says Nerenberg, switching from frown to smile: “But now, everybody is locked in, and we have a chip on our shoulder to really prove everyone wrong.”
Back to basics
Fast forward to today and Simplebet is more sure of itself. The company eventually stayed true to its name and went back to basics, deciding to focus solely on microbetting.
For those who don’t know, microbetting allows consumers to place in-play bets on individual events during sports matches. Can you predict the outcome of the next pitch of a baseball? Well back that up with a bet.
Proponents say microbetting adds an extra layer of entertainment to the experience of watching live sport, over and above pre-match selections. It allows you to wager on the outcome in real time, and multiple times over, instead of having to wait for the final whistle.
The concept has gained notable traction over the last 12 to 18 months, especially with US operators, where the bet type is making up a higher percentage of bets than ever before.
It has also inspired the launch of the market’s first ever microbetting-focused B2C brand, but more on that later.
“I wouldn’t say we were a joke, but we had some respect to gain.”
At the start of Simplebet’s journey, microbetting was a much harder sell, according to Nerenberg. Despite the US market dripping with cash and investor appetite, the concept still received pushback early on, especially from experts in Europe.
“Industry veterans didn’t get it,” admits Nerenberg. He says this was because microbetting doesn’t work well on European sports like football (soccer), because there simply aren’t enough “micro” events or outcomes to get bettors excited.
Even tennis – which should be perfect considering there is a strike of the ball every other second – does not deliver a wide enough range of outcomes. The ball is either in or out.
This is where the more granular US sports, like American Football (NFL) and baseball (MLB), came to the fore and began to provide that all-important proof of concept for Simplebet.
Nerenberg insists that microbetting, in its purest form, is a product created to facilitate the predictions and opinions voiced by passionate US sports fans during every broadcast.
“It was not a new concept, but more of a new category that had massive potential that we could see but that others just weren’t seeing,” he adds.
Proof of concept
Now that others have woken up to that potential, they want their piece of the pie.
After showcasing a free version of its product with FanDuel, Simplebet secured a RMG deal with Intralot in Washington. This is what eventually attracted the attention of DraftKings, which became the firm’s first major customer back in August 2021.
That partnership has since gone from strength to strength, and is made even more solid by the fact Nerenberg worked at DraftKings for more than four years back in its DFS heyday.
For the latter part of the most recent MLB season, Simplebet accounted for 35% of DraftKings’ in-play GGR – a sizeable increase. “Before we started really pushing the envelope, micro timeframes were maybe between 2% and 5% of in-play volume,” Nerenberg explains.
As they say, the proof is in the pudding, and client contracts continued to roll in last year. In September, Simplebet secured a global partnership with bet365, while Caesars integrated the supplier’s microbetting technology in December.
“I think there was still some scepticism around us,” says Nerenberg. “But after six to 12 months of strong results with DraftKings, it has really started to pick up.”
A minute too late
The envy of every teenage rock band, Simplebet has seemingly achieved mainstream commercial success.
However, several challenges still spring to mind for the company and its future endeavours. The first issue – latency – is unescapable.
Microbetting is designed to allow sports fans to bet on live events as they happen. But unless fans are watching in the stadium, there will always be a delay on each broadcast.
Traditional TV coverage is usually seven to 10 seconds behind the live action, but that delay is a lot longer for online streaming providers.
A SuperBowl LVII survey conducted by integration provider Phenix found there was an average delay of nearly a minute between on-field play and pictures as seen by the viewer.
The delay on the NFL’s own streaming platform, NFL+, was recorded at 61 seconds, while Disney-owned Hulu was clocked at just over 69 seconds.
FuboTV, which once aspired to combine its sports streaming product with a US sportsbook, reported the longest delay among the measured providers at nearly 77 seconds.
Nerenberg acknowledges the problem but suggests there is enough of a gap between each micro event during both MLB and NFL matches to soften the impact on consumers.
It could also be argued that consumption trends for live sports are changing. Some sports fans might prefer to follow the action on their mobiles via live score apps, for example.
“A lot of sports fans in the US monitor box scores and play-by-plays on their phones anyway, whether they’re out watching the game or not,” says Nerenberg.
Simplebet has developed low-latency game tracker visualisations as a potential remedy, while Caesars has tapped Genius Sports for a low-latency Watch & Bet model, becoming the first US sportsbook to live stream NFL matches on both mobile and tablet devices.
“I think it’s a little underrated how much people will follow those and get the same level of enjoyment, but I know that watching the game is the most popular,” says Nerenberg.
Roll the dice
Offering people “instant gratification” with the chance to bet on every occurrence in a sports match also brings with it reservations around responsible gambling.
When asked directly whether microbetting should be considered the “casinofication of sports betting”, Nerenberg shakes his head in disagreement.
“There is a lot more skill and thought that can go into it,” he says, suggesting it should instead be viewed as added entertainment for fans that are already engaged with what they are watching.
That is not to say that microbetting has snubbed every fundamental of online casino, which is almost always viewed as the riskier vertical in the eyes of most regulators.
“One element taken from iGaming is the short feedback loop,” explains Nerenberg. “But really, that is the way that all consumer trends are heading anyway.” And who can really argue, with TikTok well on its way to world domination?
Betr the devil you know
It is impossible to discuss microbetting without bringing up Betr, the US B2C sports betting brand launched by Simplebet co-founder Joey Levy and online influencer Jake Paul.
The pair are a “match made in heaven”, according to Nerenberg, who reveals that Levy was always incredibly passionate about creating a direct-to-consumer play, despite the fact that opportunity for Simplebet “very clearly” lay in B2B, in his opinion.
Levy, who is a Thiel Foundation fellow, co-founded Simplebet to simplify betting for mass market sports fans. This is what inspired the firm’s first microbetting product.
While surfing a tidal wave of media coverage last summer, Levy predicted that microbetting would ultimately emerge as the predominant way to bet on US sports.
He also described the launch of Betr as an opportunity “to build the most capital efficient and culturally relevant gambling business in the US”.
The brand has so far only launched in Ohio, where it amassed roughly 0.1% of opening month market share for both handle and GGR after offering a $50 sign-up bonus.
“One element taken from iGaming is the short feedback loop. But really, that is the way that all consumer trends are heading anyway.”
It was always going to be difficult for Betr to compete with the likes of FanDuel and DraftKings and by Levy’s own admission, that is not a battle they are intending to fight.
FanDuel and DraftKings spent a combined $255m on promos in Ohio’s first month to carve out early market share of 50% and 27% respectively, so Betr must stand out in different ways.
One of those ways is through product, which is almost 100% powered by Simplebet, except for the operator’s player account management platform. There was just seven months between Betr’s launch announcement and its Ohio go-live date, which Nerenberg is proud of: “I haven’t heard of anything faster than that,” he says.
Eilers & Krejcik Gaming (EKG) said Betr’s UX and in-app speeds received positive scores from their testing team, as did the app’s aesthetics, layout, and design. However, researchers went on to describe the microbetting app as “vacant” due to its “barren” feature set.
Betr has already moved to address this by adding game outcomes and core pre-match markets to its product in time for March Madness, which once again are built by Simplebet.
Building back Betr
This freedom to create and build is exactly what excites Nerenberg, who was almost exclusively a product executive before becoming Simplebet COO last May.
In fact, part of the reason he left DraftKings in the first place was because the company was getting too big, and in his own words, he was “hungry” for another start-up.
DraftKings was about to go through a prolonged period of execution and regulation after going public while using Kambi as a third-party sportsbook supplier.
This is not what gets Nerenberg out of bed in the morning. After meeting Levy for the first time in 2018, he made a drastic decision: “I texted my wife to say I’m joining this kid’s company. Joey was like 24 at the time, but we just hit it off and I wanted to innovate.”
“Our other customers have a lot of other priorities,” he says in a nod to DraftKings. “But we’re an innovation company and we like coming out with new things. Instead of having to convince our customers to use it, we know we can get it out there and improve it with Betr.
“I think all of our customers are going to benefit from us having that in the long run.”
A simple plan
Indeed, the “long run” is our final topic of conversation. Simplebet is now five years old, and the US sports betting landscape has shifted several times over in that time.
Operators are no longer desperate to bring technology in house, while third-party suppliers are back in demand as they can help to keep costs down during a time where profit is the be all and end all.
So what is the exit plan for Simplebet? Nerenberg, and Simplebet co-founders Levy and CEO Chris Bevilacqua, have skin in the game, so this must be something they have considered?
“We have to look at this like we’re going at it for a decade,” he says, toeing the party line before becoming more candid and pondering the possibility of an IPO.
“Realistically, I could see a lot of scenarios where we merge or get acquired. It’s not happening anytime soon. I mean you never know, but there’s nothing looming.”
The Financial Times has this week weighed in on the topic of dried-up funding for start-ups that are not able to prove their path to profitability.
This has been recurring theme throughout 2023, particularly in the iGaming space, as investors and VC firms take a more cautious approach to investing in growth companies.
The FT points out that once upon a time, start-ups were encouraged to remain lossmaking in order to grow revenues and gain market share.
The wider economic environment had turned that situation on its head, and now investors are demanding to see evidence of sustainable profits.
FT journalist Daniel Thomas wrote: “The new mantra is two years runway, according to one leading tech executive: in other words, enough money to see a business through to 2025, when capital markets and global economies are expected to have stabilised.”
Firms that are unlikely to turn a profit by 2025 will have difficult decisions to make between now and then, including cost cutting and switching strategies.
One VC CEO was quoted in the broadsheet as saying we are now in a “post-hype” landscape, which has brought about the “end of easy money”.
The FT backed this up with data from CB Insights. Total venture funding for 2022 dropped by more than a third, to $415.1bn, although deal volume fell by only 4%.
Europe suffered a 17% drop in funding to $81bn, comparatively better than the US. Between 2021 and 2022, the count of new “unicorn” companies more than halved to 258.
AI has left the starting Gates
Bill Gates is excited, and he’s not the only one as we have all witnessed the rapid advances in AI since the release of OpenAI’s ChatGPT at the end of last year.
When the Microsoft co-founder speaks, the business world listens. This week, Gates shared some thoughts on his personal blog GatesNotes.
Declaring that the “age of AI has begun”, Gates described AI as the most revolutionary technology he has seen in decades.
“The development of AI is as fundamental as the creation of the microprocessor, the personal computer, the Internet, and the mobile phone,” he wrote.
“It will change the way people work, learn, travel, get health care, and communicate with each other. Entire industries will reorient around it. Businesses will distinguish themselves by how well they use it,” he added.
Gates described meeting with OpenAI since 2016 and being impressed by their steady progress.
In September, he witnessed the company’s AI model answer 59 out of 60 questions correctly on an AP Biology exam correctly, which left him in awe.
“The rise of AI will free people up to do things that software never will – teaching, caring for patients, and supporting the elderly, for example,” he wrote.
He said he believed AI could also help scientists to develop vaccines, teach students math and replace jobs in task-oriented fields like sales and accounting.
He suggested that one day, AI could go through a person’s email inbox and schedule their meetings, and we will all have “personal agents”.
Gates briefly acknowledged AI’s shortcomings, but said that it’s important to keep in mind that we’re only at the beginning of what the software can accomplish.
“Whatever limitations it has today will be gone before we know it,” he concluded.
Gates is no stranger to the transformative power of technology.
Celebs cough up cash for crypto charges
The New York Times was one of several outlets to report on charges filed against crypto entrepreneur Justin Sun and his celebrity marketing entourage this week.
The SEC charged Sun – who apparently refers to himself as His Excellency on social media – with securities law violations linked to his management of three crypto companies.
The SEC also charged eight celebrities who agreed to pay a combined total of $400,000, including Lindsay Lohan and social media influencer/boxer/Betr co-founder Jake Paul.
The enforcement is the latest in a series of federal charges targeting the crypto industry following the meltdown of the FTX exchange founded by Sam Bankman-Fried.
In 2023 to date, the SEC has levied fines and penalties against crypto lending firms and settled a case with Kraken, one of the largest US crypto exchanges.
Coinbase could be next, after the company warned the SEC was planning on bringing an enforcement action against the company.
“We are confident in the legality of our assets and services, and if needed, we welcome a legal process to provide the clarity we have been advocating for,” said Coinbase.
Crypto is proving to be as expensive as it was once lucrative.
Betr, the microbetting-focused real money gaming site, has launched in Ohio with plans for Massachusetts, Virginia and additional states this year. Co-founder Joey Levy spoke with Ryan Butler of iGaming Next about his initial thoughts on the first launch and Betr’s long-term plans.
Ryan Butler: Your first real money state launch was in Ohio in January. What are your thoughts on the Ohio market so far?
Joey Levy: “We beat our January forecast in terms of handle, revenue and customer acquisition. We also beat our February forecasts in terms of all three of those metrics as well. As you could probably tell, we’re deliberately not playing the market share game at this moment. Right now we’re really focused on proving several things. One is, we can acquire users for low to no CAC (customer acquisition costs).”
“And on that note, we don’t have all of the data very clearly with respect for social media sites like Instagram, Tik Tok, etc, because they won’t tell you exactly how many people are in Ohio versus elsewhere. But you could extrapolate. So, for example, if you take out Betr across social media platforms, assuming 50% duplicates across platforms, and then take like 3.5% of that, which is the percentage of the US population that is in Ohio, we project we’ve converted at least 20% of our Ohio social media audience to real money gaming, and just in the last two months, which is I think by far best in class, probably unprecedented.”
“And that’s with minimal CAC. It’s not zero, because we have a $50 signup bonus, and if you apply a 10% margin, that comes out at $45, but it is so far proving our model works.”
RB: You’ve mentioned previously your company is also focused on user engagement as a major priority. What have you seen with betting in Ohio, as well as the overall media platform nationwide?
JL: “So far we’ve been very pleased with the results. For example, over 90% of our users are betting multiple times, over half of our users have bet at least 10 times and over 15% of our users have bet over 50 times. More than half of our users bet in January and February, as well. So retention is looking pretty solid. And we’re accomplishing all of this with a deliberate initial approach of only doing micro betting.”
“And that’s for two reasons. One is that approach enabled us to get to market as quickly as possible. And I think we actually broke a record in terms of going from company founding to launch of a regulated, real-money betting site, we had the fastest-ever launch. Only doing micro betting enabled us to launch quickly.”
“And then the second thing being, we don’t just want to be the product, company and brand synonymous with micro betting, but also instant gratification betting and in-play betting more broadly, which is where we think the market is going. But we also want to make it clear to the marketplace, not just the business community, but most importantly, consumers, that we plan on approaching the space differently. I think we’re probably the only ones that don’t look at sportsbook as like this commoditized experience, but rather, as a fundamentally different product experience.”
“And you know that that’s our initial shtick. But with that said, we’re now in the process of establishing product parity with respect to betting market coverage, with respect to the other operators. So for example, we’re integrating and launching our own takes on moneylines, pointspread acres, parlays, player props, etc. You won’t see like -175, or +5.5. But it will be displayed in our simple intuitive UI UX layer. And, we estimate that we probably would have had at least three-to-five times the amount of volume that we demonstrated in January and February in Ohio if we had product parity with respect to the betting market coverage.”
RB: Unlike many larger, more established brands, you’ve said Betr isn’t focused on gaining large sports betting market share at this moment. How has that strategy worked so far, and is it possible it changes as the company grows?
JL: “We could turn on the ‘brand awareness’ engine if we wanted. My co-founder (Jake Paul) has a great audience. We can get brand awareness when we want to and Jake will be the first to tell you that he’s barely even scratched the surface of what he’s ultimately going to do for this business from a brand awareness standpoint. But what we’re really focused on initially is getting brand affinity more through a grassroots effort. We really just want to have a brand and a media audience that is really engaged with the content we’re putting out. And, we’re incubating the next dozens of Jake Paul’s coming up right now in media. And I think from a distribution standpoint, that it’s a more sustainable and defensible strategy.”
“So we’re laser-focused on these things now. We’re ignoring the noise of market share, which in many ways is artificially pumped by bonus money. For example, FanDuel and DraftKings combined for so much in promo bonuses, just in January, just in Ohio, that it makes up more than three times more than our entire equity financing. Today, I don’t want to play that game. We can’t win in that game.”
“I think what you’re going to see is what we’re striving for is that 18 months from now, we could sit here and have a conversation around our unit economics versus their unit economics. I think, you’re going to see, hopefully, that we have the best unit economics. And as we get product parity, and when we feel comfortable, I could go out and attempt to raise a few 100 million dollars to put gasoline on the marketing fire, and then we start playing the market share game. But right now we’re ignoring the noise and staying focused on what we want to validate. We’ve been quite pleased with the results.”
RB: What are your next state launch plans?
JL: “We’re very excited to go live in Massachusetts over the next month. The reason why we didn’t go live on the universal start date (March 10) has nothing to do with any sort of technical challenges or anything like that. I would say it’s more so that there are some additional complexities that come with launching the second state because now you’re a multi-state operator and there are some implications with how you roll out the product experience, and we just want to make sure our ducks are in a row.”
“Virginia will be soon. Indiana, we publicly announced last year that we secured market access by partnering with the Eastern Band of Cherokee Indians and we’re very excited to have them as a partner in the business. And then Maryland, we filed for a license application. So hopefully, we receive the honor and privilege of receiving a license in both Indiana and Maryland. And those would likely be states four and five.”
“And we’re assessing market access opportunities, of course, in other states. But we’re not in a rush right now to be this broad, nationwide, licensed online sportsbook because we’re more interested in proving those things that we’ve been right so far, with strong user engagement and community-driven vitality. But if there’s a really strong opportunity for market access deals to be had in the meantime, we’re happy to consider those. Long term, we are planning on launching additional verticals within Betr gaming that will better enable us to monetize, and introduce other game types that can immediately be turned on to the majority of the US population for real money.”
Jake Paul-backed Betr has introduced core markets to its sports betting offering in Ohio to coincide with the NCAA basketball March Madness tournament.
The operator, which went live with real-money betting in Ohio on the market’s launch day, 1 January, previously focused exclusively on microbetting markets in order to provide a simplified, “instant gratification” betting experience to fans.
Now, the operator has confirmed that it has added core pre-match and in-play betting markets to the Betr platform, including on which team will win and over/under bets on total points.
Commenting on the decision to add core markets to Betr’s offering, founder and CEO Joey Levy said: “We deliberately launched with only microbetting to 1) launch as soon as possible, enabling us to learn from and iterate our product experience according to real user data and feedback.
“And 2) to establish ourselves as the company, product, and brand synonymous not just with instant gratification betting, which we believe will be the future of this industry, but to also be synonymous with doing things differently and being the first direct-to-consumer operator in the category to actually differentiate its product experience in an industry dominated by commoditised product experiences.
Betr founder & CEO Joey Levy: “We are putting Betr on a path to establishing betting market coverage product parity with incumbent operators, which will include the gradual and methodical integrations and launches of core markets, parlays, props, and many of the other betting experiences consumers can find elsewhere.”
“Now that we have done this successfully, we are putting Betr on a path to establishing betting market coverage product parity with incumbent operators, which will include the gradual and methodical integrations and launches of core markets, parlays, props, and many of the other betting experiences consumers can find elsewhere,” Levy concluded.
Betr’s core market offerings will be the first set of such bets to be powered by sports betting provider SimpleBet (of which Levy is also a co-founder) on any platform, marking a turning point for both companies as they attempt to take on more established operators in the US market.
In order to provide the best value possible to bettors, Betr said it will offer pre-market bets on core markets with 0% margin during March Madness.
It will also celebrate the tournament with a “Beat Derek’s Bracket” challenge, where users can go head-to-head with “Fade God” Derek Sullivan, “who has gained notoriety in the betting community for his abysmal betting record,” according to Betr.
The winner of the free-to-enter bracket challenge will win a $1,000 jackpot.
Betr has announced the challenge with a series of expletive-laden short videos published on its YouTube channel.
Following its launch in Ohio, Betr is expected to enter the Massachusetts and Virginia markets with its real money offering in due course.
It remains to be seen whether Betr’s expansion into core market bets will impact its licensing agreements in those states, as the firm had told regulators it would focus exclusively on microbetting markets when applying for its licences.
The operator previously suggested that it would avoid traditional betting markets as they were not familiar or easily accessible to a majority of non-bettors.