Latest Esports News

Betr CEO Confident In Growth Despite Massachusetts Departure

23

For Joey Levy, March came in like a lion on an atypically hectic first week of the month.

Last Wednesday, Levy appeared on an All-Star panel in Manhattan where industry power players offered predictions on the future of the sports betting industry over the next decade. Levy, a co-founder and CEO of Betr, made the appearance approximately an hour after the sports betting start-up announced a new round of financing that valued the company at $375 million.

In an effort to constrain customer acquisition costs, Betr has mostly eschewed costly promotions that sunk numerous mid-tier operators over the last year. While Betr appears to be more focused on long-term growth, the strategy has hampered its market share in recent months. For instance, Betr had a market share of less than 0.1% in Massachusetts before pulling out of the Bay State last month.

Levy barely had time to digest the financing round when Mike Tyson announced plans a day later to fight Jake Paul this July. Paul, a YouTube influencer and actor, co-founded Betr with Levy in Aug. 2022. For top sports betting executives, life moves fast in the C-suite. Levy and others have to adjust quickly when an opponent comes at them with a right hook-uppercut combo.

Asked by moderator Contessa Brewer of CNBC if Betr is open to being acquired, Levy appeared to shrug off the suggestion.

“We’re building Betr for the long haul,” Levy responded. “We’re not just focused on quickly growing, but profitably growing.”

Expansion plans

An entrepreneur and founder of Simplebet, Levy met Paul several years ago when the YouTube star went on a road show for his venture capital firm, Anti Fund. Simplebet, a B2B (business-to-business) product-development company, powers the technology that enables micro-betting platforms to thrive.

Sign Up For The Sports Handle Newsletter!

Simplebet uses concepts such as artificial intelligence to develop rapid betting props such as wagers on the “player who will sink the next 3-pointer” in the NBA Finals. Other cutting-edge technologies like machine learning and the use of large language models allow Simplebet to offer odds on whether Justin Verlander’s next pitch will be a ball or strike.

The initial meeting between Paul and Levy went swimmingly: “When I met Joey, it was a total, full-circle aha moment,” the boxer told New York Magazine in August 2022.

That month, Levy spun off Simplebet and co-founded Betr with Paul (Simplebet now provides its micro-betting markets to larger operators). Prior to the launch, Paul claimed to receive $50 million in Series-A funding to get Betr off the ground.

The $15 million funding round disclosed last week includes investments from venture capital firms Harmony Partners and 10X Capital.

“We’ve had strong participation from existing investors, but we also got a lot of new investment from top-notch, growth-stage investors who really believe in our differentiated approach to the marketplace,” Levy told Sports Handle following the panel.

In it for the long haul

In some respects, certain aspects of Betr’s technology can be viewed as more advanced than the infrastructure used by the mega-cap incumbents in the space. The rapid nature of micro-betting requires operators such as Betr to procure low-latency feeds and algorithms that spit out hundreds of predictive outcomes in milliseconds.

For college basketball, Betr has markets on which team will attempt the next field goal, which team will make the next basket, and whether the hoop will be a 3-pointer. The bevy of differentiated markets may intrigue college hoops aficionados when March Madness begins next week.

Since jumping to Betr, Levy and his colleagues have focused on the marathon, not the sprint when it comes to growth. Unlike the industry’s leaders in market share, Betr has opted to avoid “chasing handle,” as a way of steering clear of intense promotional battles. As with bet365, another newcomer in the U.S. space, Betr entered the market after a lengthy period of “promo wars” that eventually led to the cessation of numerous operators.

Caesars, for instance, racked up considerable expenses with a sign-on bonus in New York that matched customer deposits up to $3,000. Instead, Betr has tried to acquire customers through vehicles such as TikTok and Paul’s celebrity appeal. As of Thursday, the boxer has 4.6 million followers on X, 17.3 million followers on TikTok, and 20.6 million on YouTube, all topped by his total of 26.2 million on Instagram.

It is fair to question whether Paul’s celebrity status has resulted in adequate conversion rates. Hype Auditor, a website that tracks activity on Instagram, pegged Paul’s engagement rate at 1.61% on the social networking site. How many of those have placed a real-money wager on the micro-betting site? Betr generated a reasonably high hold in Massachusetts at 7.89%, but lagged in handle. In 10 months of operations, the company handled $2.93 million statewide.

By comparison, DraftKings reported $311.4 million in January handle, one of five online licensees to clear $35 million on the month. WynnBET, another sportsbook that ceased operations last month, handled $11.9 million.

Betr finished a distant last among the eight online sportsbooks at $418,557. Given the marketing heft of the DraftKings of the world, it is challenging for Betr to compete with the heavy hitters across the industry. Still, the disparity can be viewed as glaring.

Following the departure from Massachusetts, Betr will turn to a host of new states. Betr opened the year by securing sports betting licensing partnerships in three states — Colorado, Kentucky, and Pennsylvania.

The micro-betting company is currently operational in Ohio and Virginia. After launching Betr Picks, a DFS platform last year, Betr plans to roll out an online casino site by the end of 2024. The launch will coincide with the unveiling of a new sportsbook product for the start of the NFL season. Betr is targeting $100 million in annual revenue, a goal Levy hopes to achieve by the end of the decade.

Avoiding conflicts of interest

As for Tyson-Paul, don’t expect Betr to offer real-money wagers on the event. Since its launch, Betr has yet to post cash wagers on any fight involving Paul. An attempt from a sportsbook to action on its co-founder would likely draw considerable regulatory scrutiny.

While DraftKings added LeBron James as a brand ambassador this year, “The King” does not have a controlling stake in the company.

In the past, Las Vegas operators even allowed Floyd Mayweather to wager on himself. Some books, however, drew the line on certain props. For instance, Mayweather could bet on himself to defeat Manny Pacquiao but could not wager on a knockout win in the fifth. The latter opens the possibility for match manipulation.

Earlier this month, Paul improved to 9-1 in his professional career with an eighth-round TKO of Ryan Bourland. For the event, Betr offered a $10,000 free-to-play contest. Tyson, 57, will fight Paul at AT&T Stadium in Arlington, Texas, where sports betting is illegal. Then 20, Tyson won his first heavyweight belt in 1986 with a second-round TKO of Trevor Berbick. Tyson became the youngest heavyweight champion in boxing history roughly 10 years before Paul was born.

Others have already posted hypothetical odds. Johnny Avello, director of race and sportsbook operations at DraftKings, has installed Paul as a massive -360 favorite. While some describe Tyson (+300) as in better shape at 57 than “most 20 year olds,” he still has 30 years on Paul.

Though high-profile events such as Tyson-Paul may help Betr acquire customers at a low rate, investors at some point will seek a hearty return. For his part, Levy emphasized that the companies that develop “brand affinity” through creative ideas will be the ones to emerge as the winners in the space.

“We’re going to continue to accelerate our growth, our unit economics have been phenomenal,” he told Sports Handle. “We’re ready to pour more gasoline on the fire.”

Chris Altruda contributed to this story



Read the original article Here

Visit the Association of Certified Gaming Compliance Specialists Here

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy