No, Betr Isn't Taking Over The US Sports Betting Landscape, And It Probably Never Will

I am not sure why I am going to spend part of my day ranting about a company that accounts for approximately zero percent of the US sports betting market by share, but here we are.

Betr seems to be a bit of a media and industry darling, despite its underwhelming launch this year. The company, which includes a media and betting division, just raised $35 million in funding this summer.

But for the life of me, I am not sure why anyone is excited about Betr, at least from a gambling perspective.

First, let’s get you up to speed. Betr is live for legal sports betting in two states. The company also just launched real-money daily fantasy sports (aka parlay prop betting vs. the house) in a bunch of states, and we’ll get back to that.

My top-level takeaway: I am not sure how you launch a sportsbook and have less success than Betr has. First, here’s Ohio for June (the most recent month for which we have data):

• Betr came in 18th out of 18 sportsbooks in wagers handled in the month with $469,000. That’s good for .1% of the market behind industry stalwarts* like BetParx and MVGBet. (*these are not industry stalwarts)

• It came in 16th in revenue with $26,301.

• Betr performs slightly better if you use the entire first six months of the year, but not much.

  • It’s 14th in handle with $4.7 million. For comparison, FanDuel handled $1.4 billion over the same timeframe; the top 12 sportsbooks all handled more than $10 million.

  • It’s 15th in gross revenue with $340,000 (but it needed to offer $749,000 in promotions to get to that number.

The numbers don’t get much better in Betr’s other sports betting state, Massachusetts. For May and June combined, Betr is eighth of eight sportsbooks in both handle ($886,000) and revenue ($59,000). That’s behind Fanatics, which was still in BETA TESTING until this week.

You can say “slow burn” and “we just got started” and “we’re still working on product” all you want. I am pretty sure given the same tech platform, I could launch a sportsbook tomorrow and get more users and handle and revenue just by going to Ohio and trying to sign people up at bars or promoting it from my Twitter handle.

The problem with all of the above is that customer acquisition is supposed to be one of the strengths of Betr. And it is clear is not, at least for actual sports betting.

Let’s go to this June press release from the new funding (emphasis mine):

”Betr's media division, Betr Media, is the fastest growing sports betting media brand in the United States, already surpassing 1.3B impressions on social media in its first 10 months. Betr Media is focused predominantly on original and short-form content, which the Company believes will be the primary form of sports media consumption for the 21-34-year-old male demographic outside of consuming live sporting events themselves. Betr Media's unique approach of creating culture as opposed to reposting culture is also informing unprecedented media-audience-to-product conversion, with over 20% of Betr Media's estimated Ohio audience already converting to real money gaming customers for Betr Gaming.

Let’s assume that the above is true for a moment. You’re telling me that 20% of Betr’s audience converted in Ohio and they are handling less than half a million dollars in a month? That’s… not great. Either they are converting almost no one or those customers aren’t valuable, or both.

Sure, I guess you could tell me the media operation is immature, and they are going to continue to create a larger audience. But let’s assume just for kicks they were converting 100% of their Ohio audience, or that they quintuple their audience and continue to convert at a 20% rate. In that case, they are still barely cracking the top 10 in the state.

And all of this should be viewed through the presence of co-founder Jake Paul, one of the bigger influencers in the US who for whatever reason is not influencing to great effect here. He seems to be far more interested in his boxing career.

Which brings us to their daily fantasy sports play. Customer acquisition is not terribly different in the “DFS vs. the house” genre, other than you have access to a huge market that does not have legal sports betting (including California, Texas and Florida). You are still offering a betting product with some acquisition hurdles whether it’s called DFS or not. I don’t think the media operation is going to covert at a much different clip than it does for sportsbook.

Betr is at least drawing lots of interest in “app downloads” since it moved into “daily fantasy,” but I am far more interested in how many of those downloads are turning into depositing customers and then later finding out the value of those customers.

Betr is also going against a number of incumbents in that space (PrizePicks, Underdog) who are serving the same product to the same states. And that’s before we get into the murky regulatory environment these fantasy vs. the house operations now find themselves in.

At the end of the day, it all feels like Barstool Sportsbook redux with far less adoption. We just saw Penn Entertainment more or less give Barstool back to its original owner for free because it was extremely bad (or maybe not very good, if you are glass half full) at acquiring customers.

Maybe the media part of the business will succeed, but I just don’t see how the betting operation is going to change its fortunes in a way that is needle-moving. I could always end up being wrong, in which case bookmark this and send it to me at a later date.

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I definitely wouldn’t make a joke that activity at Betr’s Sportsbook is like this road with a tumbleweed on it, you have the wrong guy. Photo by Noah Wulf used under license CC BY-SA 4.0.