SBC News Voice of the Sports Betting Industry
Last month Danish firm Fibetco announced the international launch of subsidiary BetonFinance (BetOnFinance.com), a new betting product allowing consumers to bet on financial markets and win tax-free profits.
SBC caught up with CEO & Founder Jeff Saul to discuss the intricacies of bringing a financial betting service to market. Saul details his firm’s in-depth market research prior to launch and his focus on developing user learning functions with a view of BetonFinance achieving future mass appeal…
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SBC: Hi Jeff great to interview you regarding BetOnFinance. From your perspective and knowledge, why should financial markets be intriguing to betting consumers?
Jeff Saul: Financial markets, in my opinion, are already to a large extent driven by daytraders, speculators, gamblers and other types of intraday short term transactions. These segments represent a large part of everyday volumes in financial markets, so financial markets have all the ingredients that betting consumers are looking for in the other games that they are playing.
There are “random number generators” (stock prices, FX prices, commodity prices etc). There is loads of news flow making it possible to have an opinion on what could be interesting to bet on etc.
I also believe there is a large overlap between the audience that is active in the financial markets and in traditional betting markets i.e. male audience, who likes skill based games with some luck involved as well. There will obviously be segments of the betting consumers who will find it too difficult, so probably the overlap in the audience is primarily within the segment of educated players, whether it’s in business, finance, marketing, IT, legal, students or retirees does not really matter.
SBC: Prior to your international launch, your firm undertook ‘a proof of concept’ phase within the Danish market, what data and variables were you looking to achieve/find during this period?
JS: We were, in particular, looking for answers as to what type of clients our product would appeal to and what kind of monthly turnover we could expect per customer. This has been very encouraging as we are able to attract some very attractive player profiles.
To be honest, we have also attracted fewer players than originally expected, but I also believe that this is due to that we did not have the full product range at hand, that we have now and will have increased 6 months from now. Some of those products are expected to bring in large client volumes.
On the product side, it has also been an extremely good learning experience for us to see, which types of games that players prefer and which game mechanics that are important to make the player experience as smooth and entertaining and engaging as possible. During that process, we have introduced new game concepts and removed others. We still have a lot of experimenting ongoing in this regard.
SBC: Why do you think bookmakers have shied away from engaging deeper with financial markets or developing finance led betting markets?
JS: Bookmakers have tried out binary options over the past years. However regulation has changed for this product. It used to be possible to offer this product under a gambling license, but now a financial license is required and a lot of bookmakers are not interested in having a financial license on the side of their gambling licenses.
I am quite sure that binary options operators are very profitable, but I am similarly sure that there are a lot of unhappy customers within that field as players can lose a lot of money in a very short period of time. So such reputational issues might also play a role in bookmakers appetite for that particular product. Our financial pool betting product is much more “gentle” towards players. The shortest games we offer are 2½ hours so it is nowhere close to the 30 sec, 1 min., 5 min, 30 min game cycles that you see in binary options.
Finally, stock market data is a very tricky random number generator to work with and this I believe is a technical reason for a lot of operators not daring to move into this field. You do not want to settle your games on wrong stock prices.
I expect bookmakers to move into financial markets when they see us succeed with BetOnFinance and then Fibetco, the game provider/developer of the BetOnFinance product will be ready to supply its games as a white label product.
SBC: Your team has placed a high-emphasis on the developing learning capabilities and functions for your products customers. Why is this integral to your business?
JS: Our vision is “to make financial markets accessible for the man on the street”. This implies that we make it possible for people with limited savings to participate in financial markets. In our games, the minimum wagering requirement is as low as EUR1. So having removed that hurdle the next “hurdle” for the man on the street could be a lack of skills to understand financial markets. We, therefore, see this as an important part of our offering that we educate our users in how particularly the stock markets work and how to understand what moves stock prices. Similarly, we want to educate our players in how gambling markets and in particular pool betting works. In this way, we help to educate perhaps young people in how financial markets work, which could be complementary to their education, which in turn later in their lives will help them to better be able to invest their savings in the real stock market. Similarly, we educate players, with a financial background in how they can make use of their skills in the gambling market.
As our players bet against each other and not against the house, it is in our interest to educate players. Educated players make loyal customers as they tend to make smarter decisions.
The material we provide our players in the above context is daily market updates explaining what is going on and what players should look out for. We provide frequent Betschool articles in a simple to understand language to teach players the basics of stock markets and pool betting.
SBC: Going forward, how do you see your product adapting from its initial concept to gaining mass appeal with betting audiences?
JS: We have identified some very interesting pockets in the market, where we believe we will be able to attract big audiences, just as we have some products on the way that will appeal to some pretty large global niche audiences. You will have to wait a couple of weeks and months to see us roll out these products. One that I can reveal as we have already run that game twice is our IPO games, where players have to predict the IPO price of hot IPO’s (new companies going to the stock market) as well as the closing price on the first trading day on the stock market. This product has been very popular as private investors often get no or very limited allocations of stocks in hot IPO’s. So with our product they can always try to profit from their knowledge and interest in a particular IPO. In our latest First day IPO game, a player made odds 737, the highest odds we have ever paid, as he was the only one predicting that Danish Nets would drop DKK 5 /€ 0.67 on its first trading day.
SBC: Finally at this early stage for your business and its services, what goals do you want BetOnFinance to achieve in the near future?
JS: For 2017 I want us to penetrate the nearby markets we can with our Maltese class 3 license as well as partnering with some major players in some of the larger emerging markets and then I want us to white label launch with a couple of the larger bookmakers.
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Jeff Saul – Founder & CEO – Fibetco
