“Innovation is the ability to see change as an opportunity, not a threat,” a sentiment famously expressed by Steve Jobs, rings particularly true in the wagering industry, which has always been a frontrunner in adopting new technologies and methodologies. This industry, historically known for its ingenuity across various spheres such as user experience (UX), marketing, and payments, now sees a novel twist with the surge of online crypto operators. Giants like Sportsbet.io and Stake.com have adopted user experiences strikingly similar to traditional fiat operators like FanDuel and DraftKings. Yet, they have begun to eclipse their conventional counterparts in innovation, particularly noticeable in marketing and payments.
As of May 2022, Sportsbet.io reported a staggering US$2.7 billion (£2.12bn/€2.51bn) turnover each month, a figure believed to have since grown. By comparison, Australia’s largest operator in 2023 averaged US$1 billion of turnover per month, claiming about 45% of the national market share. These impressive numbers underscore the growing influence of crypto wagering platforms.
A remarkable facet of these crypto wagering platforms, such as Stake and others, is their domination of live-streaming through strategic partnerships with high-profile celebrities, including the likes of Drake. Conversely, emerging crypto operators like Shuffle.com have carved out a niche by leveraging micro-influencers with smaller yet fiercely loyal followings, typically ranging from 1,000 to 10,000 true fans. These micro-influencers often fly under the radar of established wagering operators, providing a highly cost-effective marketing solution.
Unlike larger influencers who have colossal yet often disengaged followings, micro-influencers foster close-knit communities. Their dedicated fans engage in constant communication through group chats and live-streams, which drives meaningful and sustained interaction. Consequently, a micro-influencer with 10,000 dedicated followers can generate significantly more revenue per dollar spent compared to an influencer with a million followers who are less engaged.
Shuffle, which launched in 2023, exemplifies the potential of new crypto wagering businesses. The company has quickly risen to prominence, facilitating over US$6 billion in bets within a short period. Under the leadership of Noah Dummett, a 24-year-old crypto native from Australia and former early employee at rapid-growth crypto exchanges like Bitmex, Shuffle’s team combines marketing acumen with tech-forward strategies.
Noah Dummett is convinced that crypto wagering operators can achieve the same scale and profitability as the crypto exchanges he has previously worked with. Aspiring to make Shuffle the world’s largest crypto wagering operator, he believes that accomplishing this will require daring strategies executed by a young, dynamic, and focused team. Shuffle’s workforce consists of 55 full-time employees with an average age of 24 years, and the company plans to double this number within the next 18 months.
Ishan Haque, an industry expert, underscores the significance of influencer marketing and community-building. Live streaming, betting group chats, and engagement within crypto communities are powerful tools in their marketing arsenal. Plans are in motion for Shuffle to follow in the footsteps of industry leaders like Stake, aiming to sign large-scale endorsements with Tier 1 sports teams and celebrities. For smaller operators, targeted advertising campaigns that promise high returns on investment remain crucial before taking on larger, riskier deals.
In evaluating marketing deals, key metrics remain consistent across different scales, helping operators set realistic expectations for bigger deals. Maintaining customer engagement post-initial promotion is a common challenge, but strategies like personalized offers, community engagement, and continuous promotions can help sustain customer interest and loyalty.
The secret sauce to Shuffle’s rapid success, as detailed by Haque, lies in its swift response to product feedback and iterations.
. Exceptional marketing and retention strategies mean little if the product doesn’t engage users. Shuffle’s platform has been meticulously designed, sporting a custom-built UI and in-house developed games that emphasize speed and user experience. For instance, the “Advanced Dice” tool allows users to switch effortlessly between various games such as plinko, blackjack, NBA parlays, and election bets, all without any performance lag.
On top of this, Shuffle’s casino games offer some of the highest return-to-player rates in the industry, with house games at 99% and slots at 97%. These competitive RTPs are a significant draw for users, setting the company apart in a crowded market.
At Waterhouse VC, we recognize that a comprehensive suite of top-tier wagering products is vital for success. This insight drives our focus on investing in B2B suppliers rather than B2C operators. For new wagering businesses, especially those straddling the B2B and B2C segments, success often lies in dominating a specific niche market where leadership is still undefined. Shuffle’s early growth strategy focused on Japan, an underserved market at the time, exemplifies this approach.
To effectively market across multiple regions, understanding the nuances of localization, cultural context, and acquisition channels is imperative. For instance, navigating newly regulated markets like Brazil requires local expertise. New operators should consider focusing on one market initially, employing native speakers, providing localized support, aligning the brand with the local culture, and understanding local content preferences.
Companies such as Shuffle, Stake, and Sportsbet.io have demonstrated that rapid revenue growth in the highly competitive wagering industry hinges on a differentiated product, unique marketing strategies, and exceptional user experiences.
Finally, for wholesale investors keen on tracking trends and news in the wagering and gaming sectors, we provide regular updates via our Twitter account (@waterhousevc) and our website, WaterhouseVC.com.
DISCLAIMER AND IMPORTANT NOTES
The information presented concerning companies like Shuffle.com, Sportsbet.io, Bitmex, YouTube, Stake, FanDuel, Flutter Entertainment Plc, and DraftKings is sourced from publicly available information and should not be construed as financial product advice. Waterhouse VC holds a position in Flutter Entertainment Plc. All information provided is general and does not constitute investment or other advice. Individual circumstances should be discussed with professional investment advisors.
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