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Earlier this year, the owners of the New England Patriots and the Philadelphia 76ers, plus Reddit co-founder Alexis Ohanian, were among the investors who pledged support and plenty of cash to social sports betting app, Wagr.
The company’s US$12 million Series A funding round represented a vote of confidence in the concept of ‘social wagering’ and, already armed with a licence to operate in Tennessee, Wagr looks well set to make a mark on the fledgling US sports betting scene.
However, Ohanian and co. should look closely at how fusing social and sports betting has played out in other markets – such as the UK – before putting too many eggs in the Wagr basket.
Most major online bookmakers in the UK have invested heavily in their mobile products in recent years, meaning British punters have a long list of top betting apps to pick and choose from.
This investment in mobile seems sensible given that more than half of UK punters now bet using mobile devices. What also seems sensible is that none of these apps focus on driving user engagement through integrated social features.
Even at SBK, the UK sportsbook app with perhaps the clearest focus on social, the main USP remains better odds and better value rather than giving bettors opportunities to engage with each other.
Numerous startups – some of which received significant funding – have tried and largely failed to encourage UK customers to adopt new sports betting behaviours and embrace in-app interaction.
Oxford University graduates Elliot Robinson and Leo Barnes did enough to encourage London venture capital fund Forward Partners to invest a significant chunk of money into Wager, the duo’s solution to the self-termed ‘social wagering conundrum’, in 2019.
Wager’s target market – bettors who want to interact exclusively with other bettors on a ‘truly social betting platform’ – frankly never really existed. It was acquired in 2020 by BetBull, a larger betting site with a strong social focus which itself has now shut down UK operations.
These cautionary tales do not stop others trying – Peerbet, Settleit and Circl are all currently attempting to ‘revolutionise’ sports betting in the UK using social features as the catalyst. To date, none have made a serious breakthrough.
In the UK, at least, it seems that betting apps are very much used for betting while social interaction takes place on other existing platforms specifically made for this purpose (Twitter, Whatsapp, Telegram and more).
So, are Ohanian and co. likely to see a return on their investment in Wagr? There is arguably much more room Stateside for innovations that create new betting behaviours: The embryonic sports betting market in the USA is markedly different from the UK market which is characterised by high-street names that have shaped betting culture over decades. US sports betting is also more mobile app-focussed than in the UK.
However, the US sports betting gold rush, set in motion after the Supreme Court struck down the Professional and Amateur Sports Protection Act in 2018 (paving the way for States to offer legal sports betting if they wished to), has already swallowed millions – if not billions – of dollars of investments.
Huge operations like DraftKings expect to pump money into loss leading marketing and product development for several years to come before user bases hit a threshold at which they can start to turn a profit. Wynn Resorts has also found the going tough and has reportedly been looking to offload its online business at a steep discount.
US internet users already actively use more than 6 different social platforms each month. With social potentially close to saturation and a long track record of this USP failing in other markets, it’s hard to see where even the most smartly backed ‘social betting’ startup will be able to compete in the USA.
