Stephen Baumohl, Co-Founder of operator Redzone and Warren Llambias, Managing Director, speak exclusively to Gambling Insider about the potential of their North-American-sports-focussed sportsbook.
Can you tell us about your backgrounds coming into this company?
WL: My parents were casino directors in London and Las Vegas. I swore blind I would never get involved in this industry and ran off to be an actor and film producer. But in 2010, I was introduced to Bet365, who were looking to take on some high roller action. I started to introduce high rollers to them, and suddenly I was sucked into the business. Then I got a consultancy job at a Russian company that was looking to build its own sportsbook. I leaned on Steve’s advice at the time, picked his brain, and at that point realised that I wanted to work with him.
I was approached by a company in 2016, really to get my high net worth clients, but I gave them a different offer. I said I would be interested if they wanted to do an American sports brand. I knew Steve, and I was trying to persuade him to do something with me, and Argyll Entertainment backed us to launch Redzone.bet.
SB: My background was in gambling from day one. I went to university in the states, came back thinking I knew quite a lot about American sports, and joined City Index. I ran its American sports side before leaving to set up my own bookmaker in Tooting called Sportsline, again specialising in American sports. At the same time, some of the guys I worked with at City Index were starting Sporting Index, and they wanted me to join them, but I obviously had another venture.
After a few months, they effectively bought me out of Sportsline, and I came and joined Sporting Index and stayed there for 23 years. That was pretty much it until Warren came along and said now is the time to start our own operation.
What did you notice in the UK that prompted the idea for a North-American-focussed sportsbook?
SB: I think the thing with American football, and American sports in general is, the people who get into them are very passionate. They are not in it a little bit, they are heavily into it, and that leads to having strong opinions which obviously translates into betting. American sports are very much underserviced in this country.
WL: I always say that it’s a little bit like watching curling at the Winter Olympics. Nobody really watches curling from outside of curling, but suddenly you are cheering for Great Britain in the competition, and you understand the sport in that moment.
You suddenly become aware this niche sport that had a hardcore follwing in the UK since the ‘80s was beggining to grow. Sky were beggining to push it, NFL games were held in London; they went from having one game to four, and they are selling out the stadiums. I heard it was the fatest growing spectator sport on Sky TV.
Speaking with an SG Digital executive, he said US sports make up about 2% to 5% of a European sportsbook’s handle. What percentage of your handle is made up of US sports?
SB: It would be closer to 40%. American football is the biggest one and we take our biggest bets there, so in terms of turnover during the American football season, it’s probably over 50%. That is coming down, but not because it’s declining, but beacause other sports are picking up.
Obviously we attract a lot of American sports players, but that’s filtering down to other sports, which was always the game plan. We never want to go down to 2%, but we do hope to even it up a lot more.
Can you give us a breakdown of the percentage of total wagers that are placed on each US sport?
SB: NFL is number one on an individual game basis, but when you look at the season overall, as baseball and basketball have more games, it’s a little bit murky. Number two would be basketball, then baseball and ice hockey is pretty low down. College football is quite popular as well and would slot in at the third spot if taken separately from the overall football figures.
WL: That’s the breakdown of American sports, because soccer and horseracing are still very highly ranked. It would almost go NFL, soccer, horseracing, and then we get to other American sports.
How do you plan to expand your offering, and eventually cross-sell other products to players?
SB: We want to build out and give a lot more choice to the client, such as the ability for them to pick their own lines on player markets. So they could choose a player, choose a statistic, whether that be receiving, rushing or passing, choose their own line and have the odds generated for them.
Giving our customers more choice on players is the big one. A lot of our customers are more used to daily fantasy sports, so that seems to be one big area for expansion.
Why is it important to create your own betting lines and not follow those set in Vegas?
SB: This gives customers a choice; we can be much better priced than anyone else, and it ends up being old school bookmaking, pitting my opinion against the client’s opinion. The only way we are truly going to differentiate is if we set out own prices and put our own mark on it.
WL: The Vegas prices are very good but the whole industry is following them and what Steve has blended is old school bookmaking, as he says, with some very clever models and algorithms.
SB: It is a blend and that’s the key in my opinion. If you go into the market as an old school bookmaker you will get destroyed, but I think the mistake a lot of bookmakers make now is relying too much on computer-based lines.
In May, you announced your UK drag racing offering. Why is it important to provide this to your customers?
SB: It goes back to our policy of trying to be different and trying to do our own prices and to not take an odds feed that is very bland. You cannot bet on drag racing in this country at all.
It was a great challenge. I didn’t know much about drag racing at the time. But the idea of having to learn, price it up and build models is very exciting; it’s what we love to do.
Betting on esports is becoming increasingly popular. Do you have plans to incorporate this?
WL: It’s definitely something we are looking to get into. People like playing the games, they want to bet on their favourite team, but I do think the industry has to be careful when it comes to responsible gaming here. Video games naturally attract minors and as much as it is part of the industry that we definitely want to embrace, all betting companies will be feeling out new territory which we don’t quite understand yet. That’s not our world and we have to make sure we get the right expertise in place to make sure esports is handled correctly.
Looking to the end of the season, who do you want, or not want to see in the Superbowl?
SB: A Rams – Patriots Superbowl would be the worst case scenario, and a Chiefs – Saints Superbowl is the dream result.