Into the black
Offshore crypto-gambling is having a moment
New launches in the GambleFi segment pose black market dilemma.
In +More: Rivalry, Golden Matrix raises; Brazil firsts.
RSI’s Schwartz says sweeps proliferation may move iCasino needle.
Growth company focus talks to the founders of Defy the Odds.
Out of the blue and into the black.
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Coining it
Throwing down the gauntlet: A raft of new crypto-based betting and gaming launches in recent weeks points to the challenge to the licensed sector by the advances being made by so-called GambleFi offshore offerings.
In the past week, a new crypto-based gaming offering called Monkey Tilt has announced a $30m Series A fundraising led by Pantera Capital (see Growth company news below).
Meanwhile, DexWin said it has launched the first “gasless” decentralized sportsbook on the Polygon blockchain.
This follows on from the launch earlier this month of crypto casino BetHog, former FanDuel founder Nigel Eccles’ latest venture. The similarly Eccles-owned BetDEX also launched earlier this year.
Game, set and crash: All three are Curaçao-licensed at a time when the leading existing crypto operator BC.GAME appears locked in a dispute with the island country’s authorities over claims and counter-claims regarding whether the business is bankrupt.
As reported by Next.io yesterday, the latest news is that the regulator has threatened to suspend BC.GAME’s license on Friday pending clarification of its current status.
Threat level: The recent launches come at the same time that a report from EKG suggested the “differentiated” offerings of online gambling 3.0 poses a larger threat to the licensed sector than the existing black market.
“Unlike the traditional black market, cryptocurrency online gambling presents a larger existential risk,” EKG wrote.
“It exists outside of mainstream payments ecosystems, and its use of streaming sites, influencers and non-traditional games moves it into a new CX bracket.”
Now for something completely different: Looking at the sites, EKG noted crypto sites offer a differentiated product including exclusive game types, such as mine games, crash games and dice games, alongside more social casino-style bonusing.
“The use of streaming as an acquisition tool and mainstream sponsorships presents a very different model to the much more low-key traditional offshore operators,” the report added.
Ape shall not kill ape: Monkey Tilt said its offering “combines traditional casino experiences with improved social and lifestyle integrations” while also “capitalizing” on multi-currency crypto payments options to “accommodate wagering with a wide range of digital assets.”
A post on X from earlier this year suggested the site was “born out of frustration” and that “online gaming needs to level up.”
It also promised a “new crypto trading gamified product” in the first quarter of next year.
The youth movement: Eccles from BetHog told E+M’s sister publication The Token Word last week that straight slots were “not the crypto audience’s thing.”
Instead, he said the site was looking at building its own games aimed at a younger demographic and with social elements built in.
“That’s the opportunity,” he said.
From Z to A: This tallies with the findings of the EKG report, which suggested that, while the main difference with crypto offerings was the frictionless payments options, the games available and the loyalty mechanics were drawn more clearly from both social casino and the wider casual gaming sector.
“Younger Gen Z players are growing up in a gambling 3.0 world and the crossover between streaming sites, video games, mobile games and crypto gambling sites is increasingly common,” the EKG team wrote.
“These sites are likely to be the introduction to online gambling as opposed to the regulated sector for some of this generation.”
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+More
Rivalry fundraising: Ahead of its Q3 earnings announcement on Friday, esports-led sportsbook Rivalry has announced the closing of a non-brokered private placement of an initial tranche of shares worth C$1.9m ($1.35m).
The company intends to use the proceeds for corporate development and general working capital purposes.
Golden Matrix: The operator behind Meridianbet is planning the sale of $20m of shares with the proceeds going towards general corporate purposes.
Ready, set: The first licenses to operate in Brazil have been handed out, with Superbet and Aposta Ganha confirmed as having paid the BRR30m ($5m) fee and able to begin regulated operations as of January 1.
Meanwhile, Sportingtech has announced it is working with The Unit to build sports-betting and iCasino apps in Brazil for Sportingtech’s brands.
Kambi has signed a multi-year agreement with Wind Creek Hospitality, the gaming branch of the Poarch Band of Creek Indians, to deliver a retail sportsbook for the new Chicago Southland resort in Illinois.
PA Betting Services has rebranded as Podium. Eugene Delaney, MD, said it was a “key step” for the company, “embracing change” while staying true to its core values.
Deal talk: French-based Banijay, which owns Betclic, is reportedly considering the sale of its troubled German-facing sports-betting business Bet-at-home, according to Next.io. Recall, sources have previously suggested potential buyers of Betclic itself have been put off by the price.
What we’re reading: Not your typical Saturday night on the Strip.
Rush to judgement
Rush to judgement: The proliferation of sweepstakes casinos could tip the balance in favor of further iCasino legislation, according to Rush Street Interactive CEO Richard Schwartz.
“It used to be one or two, but now there’s probably a hundred,” he told the analysts during a session at the Needham Consumer Tech/Ecommerce conference this week.
He said that legislators within non-iCasino states could see the effects in terms of not generating any tax revenues and in terms of the lack of player protection.
“I think that’s a great reason to kind of jump start even more efforts on iCasino,” he added.
Schwartz also committed Rush Street to applying for a license in Missouri now that voters have, albeit by a very slim margin, given the OK to the regulation of sports betting.
“We really like that state in particular because I think it’s a really good one to adapt iCasino in the future to be a candidate,” he added.
Buying power: Schwartz indicated that Rush Street was now in a better position with its suppliers than was previously the case. Pointing out RSI was now a $1bn revenue company, he said the market for the suppliers “has changed.”
“Our size and scale is allowing us to take advantage of better pricing,” he said.
He added that RSI was now “more valuable” to some of its vendors and was hence able to “improve pricing” accordingly.
Asked whether RSI would be “more aggressive” with either share buybacks or M&A, Schwartz said the company had the flexibility to both give cash back to shareholders and pursue "tuck-in” acquisitions.
But he added that the company would always look to hold in reserve the cash for potential multiple iCasino openings.
“We want to make sure we’re sufficiently capitalized to be able to maximize those opportunities at the onset of those new markets.”
Sauers note: Talking about the new tax structure in Illinois, CFO Kyle Sauers said the company was investing less in promotions in the state and claimed that “others were doing the same.”
“This goes hand in hand with our overall approach to all of our markets where we invest where the profits are most opportunistic,” he told the analysts.
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Venture playground
Growth company news
Monkey gone to heaven: As noted above, Monkey Tilt has raised $30m in a Series A funding round led by Pantera Capital and with the participation of Polychain Capital, PokerGo, Hack VC, Dream Ventures, Accomplice, Mirana, and Josh Hannah from Augmentum.
Monkey Tilt is led by Las Vegas-based CEO and co-founder Sam Kiki.
Ryan Barney, a partner at Pantera Capital, said Monkey Tilt is “pushing the online gaming world into a new era that’s heads and shoulders above the rest of the market.”
Huddle has produced analysis for last Monday’s game between the Los Angeles Chargers and the Baltimore Ravens to show the up time for its in-play SGP was 11 minutes better than the rest of the market.
Suspensions for Huddle stood at 24% of the entirety of the game vs 29% for the rest of the market.
Growth company focus – Defy the Odds
Defy the Odds is a female-led startup launchpad dedicated to driving innovation in the gaming sector by supporting underrepresented founders. Co-founder Kelly Kehn explains the whos, whats and whys…
Why launch Defy the Odds? “Paris [Smith], Sue [Schneider] and I have advocated for women and minorities in gaming throughout our careers,” says Kehn. “We believe different perspectives and approaches just make everything better, but this concept is often overlooked.”
“We’ve spent the last few years individually supporting betting and gaming startups in our own careers, so Defy the Odds was the next logical step.”
The idea came to fruition when the three met in April to talk about how they could support the individual efforts they were working on. “At the centre of the metaphorical Venn diagram were startups and inclusion,” Kehn says.
“We talked about the lack of diversity across founders in our industry and why that might be. It’s not a lack of talent, skill or experience but rather a lack of support and resources targeted at women and marginalised groups.”
“We knew we could bring the trust, social capital, connections and expertise that would make entrepreneurship much more diverse and inclusive.
Many people have said the industry struggles with innovation. Why do you think this is? “Firstly, the ‘creation of value’ is a defining characteristic of innovation, and to create value we have to understand who we are creating value for and why. Of course, we suffer from regulatory hindrances but that shouldn’t stop us from creating great products.”
“One of the main reasons our industry struggles with true innovation is we don’t have enough differing perspectives out there working on change – or they are out there but don’t have the right support.”
Do you think this is related to the industry's issues with diversity, i.e. it is very much an industry that is pale, stale and male? “There have been some great strides that have been made by those people you’ve highlighted. They aren’t the problem at all. This is about making the pie bigger.”
“The entire industry benefits when we can do that… and we can’t do that until we make entrepreneurship more accessible.”
What kind of ideas are you looking for? “We are remaining quite open to startups coming our way. We want to work with startups who can benefit from our skills, experience and network. We are also planning to work directly with larger organisations to solve their innovation challenges.”
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