Betnow wins Balderton funds for text-to-bet. Addicts beware.

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Betnow, a London-based mobile gambling service, has won a healthy first round of funding (specific amount undisclosed) from Balderton Capital and angel investors. Betnow allows users to text SMS messages to 89808 and place bets on football, golf, horse racing, dog racing and tennis matches in plain English. The bet is interpreted by a natural language engine, while most mobile gambling portals are WAP or Java based (e.g. Ladbrokes). This means placing a Betnow bet will likely be even easier and faster than normal. Payment is via the mobile contract ora bank account with winnings collected from a customer’s local Post Office branch. Balderton’s portfolio also includes Betfair, Bebo and Zopa. The founders are Vodafone veterans Robert Urwin and Mike McCartney plus former Home Office IT developer Malcolm Slater.

A Juniper Research white paper released in October put mobile gambling as being worth $1.3 billion in 2007 and $26 billion by 2012. The UK is a hotbed of mobile gambling already, along with many other European countries where SMS services continue to boom. I couldn’t find more recent research but a study in 2005 found traffic to mobile gambling sites was rocketing in the UK by 367 per cent year on year sparking concerns about addiction.

Mike Arrington of TechCrunch US believes that Balderton may regret the investment “if the business gets a bad reputation.” This may be the case. If the technology works, Betnow could well take a sizeable chunk of the market. But if I know the UK press they will go after the government for not reigning in gambling companies or funding enough gambling addiction programmes. They probably won’t go after Betnow. Afterall, too many UK journalists like a punt as it is.

  • http://www.techcrunch.com/2008/01/03/benchmark-europe-invests-in-uk-gambling-site/ Benchmark Europe Invests In UK Gambling Site. Prostitition, Drug and Gun Startups, Send in Your Business Plans.

    […] UK has more on this from a local […]

  • Jessie Anderson

    Currently the mobile networks charge massive percentages for reverse/premium sms services. ie. £3.50 on your phonebill only means approx £1.80 in somebody like betnows pocket. I read somewhere that there are constant negotiations to lower this, but the networks coin so much in off it that they don’t want to (think of all that revenue they’re getting from dodgy pay per flirt sms services lol!)

    I wonder if these guys (betnow) have managed to negotiate an amazing rate direct with the mobile networks, or if they’re just absolutely screwing gamblers with horrible odds?

  • Joe Coughlin

    Mike,

    You’ve repeated the mistake the other Mike made: which is a bizarre assumption that ‘betting through your phone = addiction’.

    I don’t completely understand Betnow’s model – as Jessie pointed out, the mobile operators will be taking a big chunk of the premium rate SMS (around 40%) which simply can’t work for sports betting that has an average gross margin of around 5-6%.

    Also, the hardened sports bettor are much more likely to want to use an operators (Coral, Ladbrokes etc) own service anyway – it’s more complete and they’ve already gone through the registration process.

    Interesting to see how it does though….

    Joe

  • Joe Coughlin

    Mike,

    You’ve repeated the mistake the other Mike made: which is a bizarre assumption that ‘betting through your phone = addiction’.

    I don’t completely understand Betnow’s model – as Jessie pointed out, the mobile operators will be taking a big chunk of the premium rate SMS (around 40%) which simply can’t work for sports betting that has an average gross margin of around 5-6%.

    Also, the hardened sports bettor are much more likely to want to use an operators (Coral, Ladbrokes etc) own service anyway – it’s more complete and they’ve already gone through the registration process.

    Interesting to see how it does though….

  • Mike Butcher

    Joe – Incorrect, I did not repeat the view that mobile gambling leads directly to addiction, I merely pointed out that the research so far showing it’s rapid take up have sparking concerns among other observers. To clarify, my view is that UK and European users are now so used to using their mobile for a range of services, gambling is just another service that will slot into their already heavy use of the mobile. Whether an individual is pre-disposed to addictive tendencies because the mobile is generally more accessible and close to hand depends… on the individual.

  • Joe Coughlin

    Mike,

    Re-read the title to your post:

    ‘ Betnow wins Balderton funds for text-to-bet. Addicts beware.’

    Seems a pretty explicit association between mobile gambling and addiction to me.

  • Joe Charakupa

    @Joe, I agree that the title does infer this association. Which I think is wrong.

    SMS is mostly going to be for casual gamers. Betnow are just making it easier for that market. Casuals are less willing to go to higher lengths to put bet and thats what this technology will supposedly do.

    I bet, maybe 4/5 times a year, and sometimes when I have a hunch, I can’t be a**ed to go to a shop, or log in to service my account. Of course, you could point out that more casual gamers could be turned into addicts, but I think that type of customer is susceptible whatever the climate.

    Having said that (@Mike) your article doesn’t really go on to assert the “Beware” part or MA’s comments yesterday.

  • Mike Butcher

    Aw, shucks you got me. I forgot about the headline! :-)

  • mark

    i use betnow it has a £3 per bet limited unless you register a credit card etc and there is a daily limit of £20-30 so you shouldnt get too carried away. this service seems to be for casual punter and it makes saturday afternoons more fun. it iis easy to use and seems to be fairly responsable.

  • http://www.thoughtsintime.com Sean Glass

    Full Disclosure – I am in the UK having founded a business in the online gaming space….

    One thing that Mike A doesn’t consider is that Balderton is fulfilling it’s fiduciary responsibility by investing in the businesseses it believes will produce the best return for its investors. If it raised it’s fun without specifically excluding investments in sin businesses (i.e. it wasn’t created as a socially responsible venture fund), then in fact, you could say that it is ethically wrong for the fund to not consider online gambling businesses. It is a large, fast growing market where recent UK legislation (the gambling act of 2005) has legalized online gambling and provided a great opportunity for new fast growing businesses. Before the passing of the US unlawful internet gambling enforcement act (UIGEA), party gaming was growing their profits faster than google… If you were invested in a venture fund and hadn’t wanted to restrict their investments, but let them invest in any legal business that would bring the best return, wouldn’t you want them to invest in that business?

  • http://www.thoughtsintime.com Sean Glass

    correction above – raised it’s “fund”… not “fun” :-)

  • Ruadhan

    Betnow are not the only guys in text betting market BetTec
    http://www.bet-tec.com/ do the same. In addition to text betting you can also sign up for results and Horse-Alert Service. All bets require a pin number which makes it more secure.

  • http://www.bookiestore.com Pay Per Head Sportsbook

    Cool service, but i am old school and love to place my bets “offline” . It’s just a better feeling. In our rush to make some easy money using such technology, we actually build empires for a very very very small amount of people.

  • http://www.gamblerstip.com gamblers tip

    as i wrote on arrington’s post, don’t be surprised by venture capitalists investing on gambling companies, as they themselves are gamblers with their money by trading shares on “intellectual casinos” such as nasdaq and so on

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