If you live in a state where online sports betting is legal, companies like FanDuel, Caesars Sportsbook and DraftKings don’t let you forget it. They dominate TV ad slots during sports games and seemingly everywhere else, too. They give the mirage that the market is saturated with no room for startups. Betr, well, wouldn’t bet on that.
Betr co-founder and CEO Joey Levy thinks there is still space for companies that bring a new approach and business model to online sports betting. What makes Betr stand out, though, is that it’s built its user interface to be more accessible for the casual sports bettor as opposed to someone who spends all day poring over stats. It also focuses on microbets, so instead of predicting who wins the whole game, users can bet on things like how many free throws Nikola Jokić will get the next time he’s up at the line.
The startup just announced a $35 million Series A2 round with a $300 million pre-money valuation. The round was led by IA Sports Ventures and Eberg Capital and also included existing investors. Betr was founded in 2022 and is live in two states so far, Ohio and Massachusetts.
This is Levy’s third sports betting startup. His first, Draftpot, was a daily fantasy platform that was acquired in 2017. His second, Simplebet, is still running to provide the back-end infrastructure needed to power microbets. But through those he noticed a problem he thinks Betr can solve: Most online sports-betting apps were designed for sports bettors not sports fans.
“If you show someone who has never bet on sports before the FanDuel or BetMGM app and ask them to place a bet, chances are they are not going to be able to do it without going on Google for 10 minutes,” he said. “I think there is an opportunity to position ourselves to be the brand for the next gen of sports fan while building a product experience that’s intuitive enough for everyone.”
Honestly, this rings true. As a daily fantasy dabbler, I constantly find myself looking up terms and stats when placing bets despite following the NBA and NHL like it’s my job. I still can’t figure out what these apps are talking about half the time.
But with that being said, is a slightly better user interface really enough to compete with the first wave of sports betting companies like FanDuel and DraftKings? And what about legacy gambling companies like MGM and Caesars, which have been around much longer?
Levy thinks so. Not just because of the user interface but also because he thinks his company is building a business model that will perform better than competitors in the long run. In addition to its betting platform, Betr also runs a media company focused on creating TikTok-friendly content about sports betting. He says this content drives people to the platform, and though it’s still early, the company has seen success converting viewers into users. Betr’s customer acquisition costs are essentially zero.
He also thinks people will be drawn to Betr because of its mission. Because the platform targets casual fans, the company is proactive in setting up safeguards so its users don’t develop gambling problems. The company also doesn’t allow you to link a credit card, and it sets deposit limits for its users under 25; you have to be at least 21 to use it.
“We have gone above and beyond to proactively implement first of its kind gaming measures when we haven’t had to,” Levy said. “We feel comfortable doing that because we feel like sports betting shouldn’t be a transactional experience that enables people to problem gamble; this is all about enhancing the sports-viewing experience.”
While it’s unclear how large the TAM of focusing on casual betters is, there definitely seems to be room for more online sports betting startups. Online sports betting is estimated to reach $7.2 billion in revenue this year, and that is for a market that can legally operate in only 24 states. As more states legalize it, numbers could soar.
And Betr isn’t the only startup going after this market by any means. Wagr, which looked to combine social media and sports betting, raised $16 million in venture capital before getting acquired by Yahoo, and Mojo, which approaches sports betting like investing in stocks, has raised $100 million.
Levy said he isn’t focused on gaining market share just yet. Once the company proves out its business model, he thinks that the market share will just come with time.
“That is still more in the early innings, we don’t even have California, Texas and Florida yet, and it’s a very difficult industry that has a lot of sharp elbows,” he said. “I wouldn’t want to be doing anything else. It’s a lot of fun, despite all the bullshit.”