Scratching your head when you read this headline? , but you should read my view on this. I saw and experienced the rise and fall of the gambling giant bwin. The same things I saw then, I do see now when I look at the Daily Fantasy Sports market, but we are at a position to still do it better and smarter.
Lack of precision
We have a hype so everyone is jumping on the bandwagon, that seems like a legit replacement for the prohibited online betting in the USA. Everyone sees the multibillion dollar potential, so it comes at no surprise to see leagues, teams, media companies investing heavy and signing partnerships. Beside the classic rant we saw on New York Post…one we saw at the early stages of bwin in Europe, full of clichés and wrong accusations…there is this naïve thinking of doing it the google way when it comes to real money gambling. So to achieve this grow-grow-grow strategy companies are starting the race for the most partnerships, the most signed teams and leagues and events, but exactly like bwin, you can buy a market only for a short period time.
Without a crystal clear brand strategy, brand message and a clear focus on technical leadership, all of this can fall apart one day or the other. Sure, the growth investors see now is amazing and it will rise, especially with this being the first major league seasons with the real money AND daily league hype. In Germany we call this the “watering can principle”…it makes it impossible to really target something because you just go out and water everything.
Wait for the rakeback
Oh, no need to wait, it is already there! You can already see first sites and companies offering rakeback and some leagues creating weird VIP programs, built to have rakeback without calling it the same. There is a reason why so many poker connected people are now in the game, because the mechanism is not really different, but so is no the road to ruin. Rakeback already killed online poker when it was part of one of the biggest hypes and the same will happen with if not do everything to prevent it.
Why? It is simple, the rakeback competing can only be a race to zero, the same zero we saw in the poker market.
Mixed feelings here. We see some of the companies running for some software innovation, but we also see a lot of the companies mainly hunting the market share or at least the advertising market share.
Let’s take the European betting business again and look which company has the most success and the name that pops up is bet365. The family owned business is the biggest online bookmaker worldwide, but it was also the first online bookie to place a giant bet on technical leadership and product development instead of signing as many teams as possible, something bwin followed for years (Real Madrid, Bayern Munich, Manchester United, etc).
I know how some companies will react reading this article, but this is not someone who wants to see anything negative in the business. I was leading a solid part of the business for giants like Ladbrokes and I saw what happens if people don’t care about a clear future target and picture. I saw what happens when acquisition and growth become the only targets instead of taking quality of the traffic into the planning process.
It is actually the opposite. I would like to see a model establishing itself and surviving even if the betting market ever opens and we all know the day will come and it will be challenging for the whole industry.