From PASPA to Pandemic

By Carl Friedmann
SportCaller MD and co-founder Cillian Barry speaks to Gambling Insider about the company’s journey so far and the effects of key milestones along the way

How different is SportCaller today to when it started out?

SportCaller started life a decade ago under the name RaceCaller, which I set up with my brother-in-law who was a huge horse racing fan. Back then, the focus was on B2C with the intent of creating a social-tipping community and discussion forum for racing fans in the UK and Ireland. The initial premise being that casual punters would respond well to tips and comments from other sports fans, especially those who had proven themselves to be adept at finding winners in the past.

At the time, plenty of people were making good money out of the affiliate model. However, it proved heavy going for us, but we kept a focus on the product and created our own prediction-game format that helped forum users pinpoint who was worth listening to, and who was not. These games soon became interesting to operators and media owners who were looking to grow fan engagement around racing. Not long after, Racing UK asked us to create a similar tipping game for them. Sky Bet quickly followed suit and Pick Six, our breakout success story, was launched with the backing of Channel 4, then racing’s terrestrial TV broadcaster in the UK. It gave us the market traction and credibility we needed with a small but strong client base around horse racing.

A couple of years later, Paddy Power got in touch, tasking us with developing a game for Euro 2016. So we rolled out a game whereby a player had to pick an anytime goalscorer from six consecutive games to win £100,000 ($140,000). Paddy Power put it at the top of their above-the-line messaging, spent a lot on marketing it, and paid out more than £1m in prizes over the course of a season. It did a good job for them on acquisition, and also helped with reactivation, as users with dormant accounts, who weren’t enticed by free bet offers, leapt at the chance to win £100,000. Having successfully made that jump from racing to mainstream football, SportCaller was born.

 

What have been your major focuses and have they changed along the way?

That watershed moment over the Euros and our ongoing relationship with Paddy Power Betfair really consolidated our position and crystallised the value in SportCaller’s products. While the games were very playable and straightforward on the customer side, we introduced a level of complexity in the backend to ensure the games delivered repeat players, funded accounts and churn-reduction in a secure and scalable way. As a result, our free-to-play (FTP) games were allowing operators to acquire genuine customers at a low cost, but also to stay fully compliant within the tightening grip of regulation around the mechanics of sign-up bonuses and free bets.

Bonuses and enhanced odds had become such a race to the bottom that the industry was crying out for a new dynamic. These FTP games fulfilled that need to become the first real game-changer in years. Behind the scenes as a business, we were keen to never get ahead of ourselves. We always kept three tenets front of mind: maintaining a strong team, strong tech and happy clients. These were the reins governing any progress we might make. At the same time, we were constantly keeping a close eye on anything that could kill us – cashflow, losing a Tier-1 client, or a security or data breach were always high on the list. Managing these risks was pivotal to safeguarding SportCaller’s sustainability from our bootstrapped beginnings. Bar a €250,000 money-raise in 2014, we were self-funded and didn’t break even till 2017.

From that point onwards, we had a small, profitable and functional outfit. It was perhaps the first time I wasn’t looking over my shoulder at my young family and questioning what I was doing. After all, no matter how good the idea or how much you believe in it, self-funded start-ups remain, in all probability, a type of recklessness. At times, it definitely felt like a drain on my financial and mental well-being. So the unwavering support of my wife handling both our company accounts and two young kids at the time was the stabilising effect I couldn’t have done without. Beyond that crucial contract of marriage, I was also fortunate in meeting the right backers at the right time, and securing key hires with similar serendipity.

 

How did the overturning of PASPA affect the business and inform the Bally’s acquisition of SportCaller?

Obviously, history is littered with far more consequential examples or people and projects that missed their moment. You can have a great idea, skilled staff and make all the correct moves from an executional point of view. However, if the underlying market isn’t moving in your favour, even the best-laid plans can be all for nothing. The reversal of PASPA was naturally a game-changer for FTP games and SportCaller. FTP is a great product in regulated states, but it’s an even better product in pre-regulated states. And such is the highly fragmented make-up of the US landscape that FTP has been given a key role to play in unpicking, and unpacking its enormous early-stage potential over the coming years.

Over the next decade, acquisition and its associated costs will continue to confirm the importance of FTP in the US – already a very expensive place if you want to get your hands on a ticket for the top table. Bally’s, for us, was the standout partner in our formal sales process, not only in terms of the financial package but also because of the chance to do something truly significant in the US. They’ve obviously been on a tear of late, picking up the sportsbook platform Bet.Works and the fantasy sports site Monkey Knife Fight, alongside orchestrating a partnership deal with the Sinclair Broadcast Group. And it was their desire to decisively act on the North American opportunity that was so appealing to me.

 

How has the pandemic affected your operations?

Well, like most, we had a horrible Q2. However, as the pandemic exposed just how ill-prepared many in the sector were to cope with a sudden disruption to business as usual, the challenge soon became an opportunity for us. Operators pushing sports betting players towards casino games and more obscure sports, like Russian table tennis or Belarussian football, was not a good look and the industry rightly caught some heat in the media. Consequently, curbs were imposed by various jurisdictions to protect players.

All of this accelerated the growing importance of FTP to the industry. Our new breed of quiz games allowed our clients to offer a soft and responsible means of keeping players engaged with their core products of interest, during the shutdown of elite sports. Consequently, it should come as no surprise that many of our current games with leading operators in more mature European markets are aimed at player retention in a sustainable and responsible way. It’s another enduring and positive legacy effect from Covid-19 for both consumer protection and education.

 

What are the biggest challenges brought on by the pandemic?

Obviously, being locked up at home in Dublin, not to mention the unexpected demands of home-schooling, have created unforeseen professional and personal pressures. However, although we missed seeing our friends and colleagues face-to-face, alongside annual trips to New York or sunny California, there were some silver linings to be found on an otherwise dark Covid cloud.

Indeed, by working remotely at 100% capacity with all our distributed team, from our Dublin base to hubs in London, Kyiv, and Philadelphia, SportCaller maintained our collective output and integration pipeline at a time when many companies were struggling in this new WFH environment. By recruiting carefully and granting our team autonomy and agency, SportCaller has become a more anti-fragile and resilient company.

That said, I’m acutely aware that I’m speaking from a position of privilege in that we’d already established ourselves as a market force in FTP, which facilitated doing business as usual without a pricey entertainment or travel budget. It’s far harder for early-stage companies to break through without the easy-access proximity of physical conferences, and that chance one-on-one encounter that can make the difference. For all our sakes, I look forward to these summits and their brilliant networking opportunities recommencing as soon as is practically possible.

 

What are the major aims for SportCaller in 2021?

After such an exciting 2020, we’re happy to have now settled back down. We have grown the team to deliver on a full roadmap, with client games in the UK, Europe and North America, including some exciting new products being worked on for Bally’s.

We’ve had a great start to Q1, signing deals with the likes of Sportsbet.io, the ComeOn Group and Kaizen Gaming, which has laid the groundwork for a big 2021. We’ve really enjoyed helping to drive FTP’s rapid rise and are looking forward to seeing how it can direct some welcome innovation in the US sports betting market.

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