Sports betting is changing on a daily basis. New mergers and acquisitions surface constantly, and new markets open at a rapid clip. Well, there is a new company fueling innovation in the industry, and this week I sat down with the CEO. He is the former founder of CSTV — which would go on to be bought out by CBS — and current CEO of SimpleBet, Chris Bevilacqua.
Chris has been an entrepreneur most of his life and is now turning his attention to the sports betting industry. He was an early investor in Airbnb, Lyft, SpaceX, and StubHub to name a few. His knack for understanding trends and business opportunities brings him to his current venture, SimpleBet.
SimpleBet is sports betting enterprise software that allows players to microbet on individual games and plays. These bets are extremely fast-moving, it is common to bet on individual plays or even the next pitch in a baseball game. SimpleBet has done some free-to-play contests with FanDuel and other sportsbooks with the expectation that they take real money bets in all states in the near future.
Chris Bevilacqua On Sports Betting: “There Is A Big Land Grab Going On”
Sports betting has been extremely chaotic over the past few years. From the repeal of PASPA in 2018, to the 2020 IPO of DraftKings, and everything in between. We know that sports betting has become a major part of the financial world. The industry is still taking shape, but Chris has an interesting take on the challenges that we could face soon.
Chris states the lack of focus on innovation as a potential roadblock. He says, “Companies are spending hundreds of millions of dollars on customer acquisition. What has really been lacking is product innovation.”
Every company is looking to bring in new customers and dominate market share first in foremost. However, the cost of this has been shockingly expensive. In 2020, DraftKings spent $495 million on marketing to gain market share in new states. Moreover, this cash burn does not appear to be a bad investment on DraftKings’ side.
DraftKings says that each customer’s lifetime value is $2,500 to DraftKings. They are currently paying $371 in average customer acquisition cost. Even with the high cost, that appears to be a fantastic investment if their calculations hold up over time.
Unfortunately, the resources being put into customer acquisition are forcing companies to not compete on the innovation side. Most sportsbooks like BetMGM and FanDuel are offering the exact same betting options. Moreover, the only sportsbook truly willing to innovate is PointsBet who has a proprietary bet type called PointsBetting. Every other company’s portfolio is essentially carbon copies of other sportsbook offerings.
The Future Of Sports Betting And How Micro Betting Fits In
Everyone wants to know how this market is going to play out. Seemingly every day there is a new state passing legislation to legalize sports betting, companies are jockeying for positions to gain market access to new users, and thus gain more revenue. This is not going to stop anytime soon either.
When asked how he expects the future of sports betting to end up, Chris said, “Over the next 3-5 years I would expect to see mass consolidation. 3-5 big operators that have the vast majority of the customer base.” This would set us up for quite a standoff between major companies like FanDuel, DraftKings, and BetMGM.
Furthermore, if we see a company take a significant step forward in innovation, they would set themselves to be one of these major players. Micro-betting is poised to be that next big thing. Last year, micro-betting was tested in a FanDuel free-to-play tournament. According to Chris, the results were phenomenal. He explained, “30% of users were playing with micro-betting for over an hour with 11-12% were on for two hours.”
In-Seat Stadium Betting Coming Soon?
Imagine sitting in a stadium and having a screen allowing you to bet on what is happening right in front of you. It sure seems like this could be a fit for SimpleBet’s software. Being able to interact directly with the game that is happening in front of you could absolutely be a part of sports betting going forward.
Currently, micro-betting is focused solely on the three major sports. It would be very entertaining to see how SimpleBet worked in combat sports or golf. However, SimpleBet is using most of its resources in the most popular sports. Interestingly, Chris says, “football, baseball, and basketball make up 90% of the handle in the United States.”
Eventually, micro-betting on rounds in a boxing match or a hole in golf will surely be added in. But for now, the focus is on micro-betting individual drives or plays for football, pitches or at-bats for baseball, and individual possessions in basketball.
As the market and userbase continue to grow; the betting options will need to do the same. Live betting is something that we constantly talk about at GamingToday as a profitable endeavor. Growing that field is inevitable and SimpleBet believes is the true future of sports betting.
When asked how he sees the market moving in the next 3-5 years Chris made a prediction. He said, “50% of the entire handle will be in play with micro-betting. It will be a predominant way for users to bet on sports in the United States.” Currently, SimpleBet’s operator partner Intralot is taking real-money micro bets in Washington, DC and Montana.