The sports betting industry has not seen any major disruptive innovation since the establishment of Betfair almost 20 years ago, but beconnect believes its new exchange-based product can shake up the sector. Co-founder Mark Weaver explains how it works.
While business may be booming for British bookmakers, it is accepted wisdom that well over 90% of punters’ sportsbook and exchange accounts are long-term net losers. We set up betconnect with a mission to change that.
For us, the gambling space is ripe for disruption. The industry has not had a major innovation since Betfair in 2000, and we saw exactly where it was needed – with a proposition that would tip the balance between bookmaker and punter back onto a more even keel.
Making a killing
As it stands, the bookmakers are making a killing out of punters. The numbers speak for themselves. Over the last couple of years, the UK gambling industry received a staggering record of £14.4bn of revenue from lost bets alone – enough to write off the trade deficit of a minor country. On the other hand, the top 10% of punters who actually stand a chance to turn a profit from the bookies (the pros) are being barred by the tens of thousands.
For us, it seemed obvious that a social betting exchange that would team up professional gamblers with ordinary punters would be just the thing to address that imbalance. After all, when it comes to game changing disruption, it’s all about putting two parties together that need each other.
Think Uber and AirBnB. Their monumental successes have been because they’ve connected gaps in the markets that were crying out to be filled. For Uber, it was about breaking the extortionate monopolies that taxi firms were holding over anyone needing a lift, and instead offering an alternative. For AirBnB, it was about breaking up the hotels’ hold over the short-stay market.
When we created betconnect, we approached it with the same disruption in mind. Our mission was to take on the bookies – by putting together the punter looking for better guidance to get their winnings into the green, and the pros that were being blocked out of the market by the bookies.
The mechanic that then connects them from there is simple. Recreational punters are able to join betconnect, browse our directory of pros, and connect with the ones whose bets they are interested in following.
Separated into two groups, ‘pro’ and ‘punter’, the pros put their bet requests in. The algorithm of our Silicon Valley-inspired technology stack then intelligently splits this bet up into hundreds of different bets divided into smaller amounts. Once the punter has matched the pro’s bet request, they can then go and place the bet at a bookmaker, add a bit more for themselves, or choose to lay it.
To draw a similar comparison, we’ve seen the same happen in the financial sector recently with eToro, and we’ve then applied that to sports betting. With eToro, customers copy financial traders and funds at the click of a button – letting them do all the work while they sit back and collect the rewards. In our case, we do the same for gambling – by giving punters the chance to learn and bet with the very best out there.
How it works is very much personalised, and has a lot of clever artificial intelligence and machine learning behind it. Punters are able to tell the app what sports they’re interested in, and whatever the flavour – be it football, tennis, golf or horseracing – or any other, that is what they receive. Over time, our technology begins to build a profile of each punter, so every bet request we send them becomes highly relevant to what they like to bet on, and in turn, better connecting the community as a whole.
But enough about the punter – moving on to the pros – they pay us a commission of up to 3% to get their bet matched – which makes their pro-status self-validating initially. Once they are active on the betconnect platform they are held to account through the publication of their own profit and loss statistics – not only allowing our punters the freedom of choice over who they follow and learn from, but also giving them the opportunity to lay the bets of pros they disagree with. Every bet request is also financially backed by the pro, so each and every one of our punters can be safe in the knowledge that their interests are aligned. If the punter chooses to follow the bet request and the pro wins, the punter wins too.
One question we’re then immediately asked is that surely the bookies would be quick to suspend markets when receiving hefty bets? Luckily, that’s the beauty of the platform – if punters are matching a bet and then laying it themselves, then it doesn’t even hit them.
While we’ve only been around since January, we’re now looking at an exciting first year ahead. Uptake has already been fantastic, and now we’ll be focusing on spending 2019 building out our social features to make betconnect not only match bets, but also give our users the chance to collaborate and share bet requests, which will deliver betting’s first truly social experience.
The odds are no doubt in our favour, and aside from some already amazing feedback – the social trading journey we’ve seen with eToro should provide us with a great example of what can be achieved. Already accounting for 40% greater profitability in the financial sector while still in its infancy, we’re betting on being able to do the same here.