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NEWS 19 July 2019

Betconnect Co-founder: Focus on UK market before venturing elsewhere

By Nathan Joyes

After launching back in February, Nathan Joyes caught up with Betconnect’s Co-founder, Daniel Schreiber, to see how the company has progressed since ICE London.

What developments have occurred since Gambling Insider caught up with Betconnect at ICE?

We had just launched the product a couple of weeks before ICE and the last five months have been a whirlwind. As it is a new concept, people have been very keen to know more about it.

To be honest, we were overwhelmed with the interest we have received. A lot of our clients are trying to crack social gambling and with it being a new concept, everyone has been keen to see how we would progress and the impact we would have on the industry.

We’re attracting all kinds of users: exchange layers, for example, are coming to Betconnect as no other exchange offers commission-free laying. On other exchanges, if you lay and you win, you pay commission whereas with Betconnect our punters, who are effectively our layers, they are always commission-free. That has helped us attract a much wider audience.

How many pros is Betconnect now working with?

We now have over 800 registered pros on our books. Predominately, over 50% of our volume is on horseracing, which is great because where the industry suffers in terms of the exchanges, liquidity on horseracing doesn’t exist between early morning until half hour before a race. Liquidity is pretty light, especially if you’re a big hitter. 

If you are looking to back horses at the early prices, the only place you can get a reasonable bet on is with the bookmakers. So what we have noticed is we are becoming that kind of market to our players, between early morning and 20 minutes before the race itself.

This wasn’t something we expected at first; we were surprised with the significant interest in horseracing, with pros placing bets of all sizes. The lack of liquidity on exchanges has definitely helped us gain more players.

Ideally, by the end of 2019, we want to be up to 2,500 pros and we believe this is more than achievable as more and more people begin to discover Betconnect. I think the customer service side of the industry has been lacking in recent years, and that’s something we really pride ourselves on.

When we last spoke, Betconnect made it clear it wanted to build a social presence. Are there any plans in place?

Marketing is very expensive these days and we think because of our product, which is so niche, it does stand out in a highly competitive industry. We can go the social route and grow the product organically which is what we are trying to achieve. We’ve expanded our marketing team who are helping do exactly that.

Feedback from our customers has been positive. They feel as though they are part of a community which is exactly what we want. We feel if we continue to expand the social side of Betconnect, the future will be very exciting indeed.

You previously claimed Betconnect can be bigger than Betfair – is this still something you stand by? Is it still achievable?

Betfair is a juggernaut and there’s definitely a long way to go to knock them off the top spot in terms of exchanges – and the thing with exchanges is you need liquidity from both sides of the fence. It’s a competitive environment. We’re up against four big exchanges in the UK but given we are five months old now, we are pretty much holding our own.

It's interesting when you look at the other exchanges and you see the volumes we have matched on certain events compared to what has been done elsewhere. It's exciting times when we know we are matching more than other exchanges on various races and other sporting events.

We’re currently looking into potential partnerships in the US and we’re looking at spending more time and exploiting these opportunities now we are up and running. Our main aim is to get the concept nailed here in the UK before we venture anywhere else.

What are Betconnect’s ambitions for the rest of 2019?

There have been a few feature changes to the platform. We’re currently going through a re-branding exercise in the next few months which we are excited about, just to change the look and feel to our product. We’re passionate about Betconnect and we want the brand to reflect that, both with logos and the tone of voice.

We’ve run a number of focus groups and taken on board customer feedback which has given us some really useful insight.

Originally, we were charging 3% on football but we lowered that to 1% at the end of last season, which is the cheapest commission out there at present. We took the decision as we want to compete with the Asian market – because that's where the big syndicates and liquidity is found at present - and we feel Betconnect can bring a lot of this football betting volume back to the UK by offering our pros the competitive rate of 1%.

As I’ve mentioned, we are competing with four other exchanges and so we need to educate people about Betconnect and what we can offer them. We’re confident in our product and it has definitely attracted the attention of users and long may it continue.

RELATED TAGS: Online | Industry | Sports Betting | Feature
IN-DEPTH 16 August 2019
Roundtable: David vs Goliath – Can startups really disrupt the industry?

(AL) Alexander Levchenko – CEO, Evoplay Entertainment

Alexander Levchenko is CEO of innovative game development studio Evoplay Entertainment. He has overseen the rapid expansion of the company since it was founded in early 2017 with the vision of revolutionising the player experience.

(RL) Ruben Loeches – CMO, R Franco

Rubén Loeches is CMO at R. Franco Group, Spain’s most established multinational gaming supplier and solutions provider. With over 10 years working in the gambling, betting and online gaming industries, he is skilled in operations management and marketing strategy.

(JB) Julian Buhagiar – Co-Founder, RB Capital:

Julian Buhagiar is an investor, CEO & board director to multiple ventures in gaming, fintech & media markets. He has lead investments, M & As and exits to date in excess of $370m.

(DM) Dominic Mansour – CEO, Bragg Gaming Group:

Dominic Mansour has an extensive background of nearly 20 years in the gaming and lottery industry. He has a deep understanding of the lottery secto,r having been CEO at the UK-based Health Lottery, as well as building bingos.com from scratch, which he sold to NetPlay TV plc.

What does it take for a startup to make waves in gaming?

DM: On the one hand, it’s a bit like brand marketing; you build an identity, a reputation and a strategy. When you know what you stand for, you then do your best to get heard. That doesn’t necessarily require a TV commercial but ensuring whatever you do stands out from the crowd. Then you have to get out there and talk to people about it. 

AL: Being better than the competition is no longer enough; if you’re small, new and want to make a difference – you have to turn the industry on its head. Those looking to make waves need to come up with a new concept or a ground-breaking solution. Take Elon Musk, he didn’t found Tesla to improve the existing electric cars on the market, he founded it to create the industry’s first mass-market electric sports car. It’s the same for online gaming; if you want to make waves as a startup, you have to bring something revolutionary to the table.

JB: Unique IP is key, particularly in emerging (non-EU) markets. As does the ability to release products on time, with minimal downtime and/or turnaround time when issues inevitably occur. A good salesforce capable of rapidly striking partnerships with the right players is vital, as is not getting bogged down too early on in legal, operational and admin red tape.

How easy it for startups to bring their ideas to life? How do they attract capital?

AL: It depends on the people and ideas behind the startup. Of course – the wave of ‘unicorns’ is not what it used to be. Some time ago the hype was a lot greater in terms of investing in startups, but that’s changed now. Investors now want more detail – and even more importantly, to evaluate whether the startup has the capacity (as well as the vision) to solve the problem it set out to address. That’s not to say investors are no longer interested in startups – they certainly are – but now more than ever, it’s important for startups to understand their audience as well as dreaming big.

JB: To get to market quickly, you need a great but small, team. If slots or sportsbook, the mathematical engine and UX/UI are crucial. Having a lean, agile dev team that can rapidly turn wire framing and mathematical logic into product is essential. Paying more for the right team is sometimes necessary, especially when good resources are scarce (here’s looking at you, Malta and Gibraltar).

Building capital is a different beast altogether. You won’t be able to secure any funding until you have a working proof of concept and, even then, capital is likely to be drip fed. Be prepared to get a family and friends round early on to deliver a ‘kick-ass’ demo, then start looking at early-stage VCs that specialise in growth-stage assets.

How do you react when you see startups coming in with their plan for disruption?

RL: We welcome the innovation and fresh thinking startups bring. This is particularly the case in Latin America, with a market still in its infancy. One area we’d especially like to see startups making waves is in the slot development sector. Latin America is a young market that needs local innovation suited to its unique conditions – especially in regard to mobile gaming.

Operators eyeing the market have Europe‐focused core products, which creates a struggle to work to the requirements of players and regulators. To succeed there, it has become more important than ever to work with those with a knowhow of the local area to adapt products and games to besuitable from the off; we welcome the chance for local talent to develop and grow.

Do you think it’s easier for established companies to innovate and establish new ideas? 

AL: From a financial perspective, yes. It is without a doubt easier for incumbent companies to establish a pipeline of innovation via their R & D departments, as well as having the tools to hand for data gathering and analysis.

But it stops there. Startups hold court in every other way. Not only are they flexible, they can easily switch from one idea to another, change strategy instantly as the market demands and easily move team members around. Established companies know this – and this is why we’re seeing an emerging trend for established companies to acquire small, innovative online gaming start-ups. They have the right resources and unique ideas, as well as the ability to bring a fresh approach to businesses’ thinking.

RL: For me, it’s always going to be established companies. Only with the resources, industry experience and know‐how can a company apply technology and services that truly make a difference. Of course there are exceptions. But when it comes to providing a platform that can be approved by regulators across multiple markets – as well as suiting an operators’ multiple jurisdictions – it is simply impossible for a couple of young bright minds with a few million behind them to get this done.

DM: I actually think it’s harder for established companies. It’s key to differentiate between having a good idea and executing one. That’s where the big corporates struggle most. They’re full of amazing people with all sorts of great ideas but getting them through systems and processes is nearly impossible.

Is it essential to patent-protect innovative products?

AL: It’s a very interesting subject. If we take IT for example – patents can actually become a block to the evolutionary process within the industry. Of course, getting a patent future proofs yourself from the competition copying your concept but, having said that, if you’re looking to protect yourself from someone more creative, smarter and agile, you’ve probably lost the battle already!

In our industry everything is moving faster and research takes less time than the development itself. No matter how good you are at copy pasting, you can’t copy Google or Netflix. The most important thing is not the tech itself but rather its ‘use-case’ – or in other words, does it solve what it’s meant to solve? Competition is healthy and the key to innovation. If you spend your whole time looking behind you, you’ll never be able move forwards.

JB: Tricky question, and one that depends on what and where you launch this IP. It can be difficult to patent mathematical engines and logic, mostly because they’re re-treading prior art. Branding, artwork and UX is more important and can easily be copied, but the territories you launch will determine how protectable your IP will be once patented. US/EU/Japan is easy but expensive to protect in. But China/South East Asia is a nightmare to cover adequately. Specialised patent lawyers with experience in software, and ideally gaming, can help you better.