A blast from the past...
In 2000 a bold new startup attempted to change the gambling world by creating an online betting community where people bet against their friends. The company was Flutter. Betfair was also a peer to peer gambling exchange but had a different proposition. Betfair focused less on the social aspects and more on the market trading dynamics. Betfair quickly established a beach head with serious horse racing punters, who had a pressing need for the new service. After a brief head to head battle, Betfair and Flutter merged. Although based on the concept of a peer to peer exchange, the only truly social feature of the Betfair website today is the forum.
Roll forward to 2009...
There have been an influx of social betting startups into the market in the past 12 months. A good example of this move towards social betting is the new football pools. Football pools has always been something of a social betting game. I remember the days when the pools man used to visit our house to collect the coupon and £1 each week.
As part of the strategy to bring football pools online, the umbrella company Sportech purchased a football fan site called 4thegame back in Nov 2008. Over the past 12 months 4thegame.com has been integrated with the football pools website to offer a more social fan based experience.
As part of their social betting strategy, football pools have added many social media features to their website, including forums, profile pages, league tables and mini leagues.
In the exchange world, Smarkets is a new start-up aiming to offer a social based gambling experience. I admire their ambition. It is a daunting task to create a betting exchange from scratch but that is what they appear to be doing.
Will combining social media and community with betting work? Yes. But social features will only appeal to specific market segments. Betfair dominated because it was well suited to serious horse racing punters. Likewise, the football pools social strategy may be well suited for the average football punter. The general rule is that no size fits all.
Betfair dominated Flutter because serious horse racing punters bet significantly more than the average social bettor. Betting is a low margin, high volume business. Will the investment in social betting pay off if it attracts a large mass market audience who spend more time talking than punting? We will wait and find out.
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Thanks for the mention Stephen. I enjoyed your talk at First Tuesday.
ReplyDeleteYes it is a daunting task to create a betting exchange! Hunter and I had the idea four years ago and have been working on Smarkets full-time for two years.
Smarkets will merge the social atmosphere of a betting shop or race track with the web, enabling punters to comment on a match/race/etc and interact in real time. We're also working to break down the barriers for the more casual punter by making the interface sleek and simple. We will also be offering developers an open RESTful API.
Jason
CEO / Co-founder of Smarkets
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