Finalising its second year in full operations, SBC caught up with Colossus Bets CEO & Founder Bernard Marantelli to discuss his start-up’s progress under changing market conditions.
Focusing on in-house product development capabilities, Colossus Bets has released a series of new features and innovations in 2015, marking itself as an effective and unique industry start-up.
Marantelli details how his company’s operations, strategy and rational have evolved in 2015 amid a new industry wide context
SBC: Bernard, you have entered your second year in full operations, how have you grown Colossus Bets business services in 2015?
Bernard Marantelli: We began a complete re-build of our core tote engine early this year which we managed to release in time for the new football season in August and in some respects the year to date has been about giving us the capacity to accelerate our growth in 2016 and beyond. Our new tote is flexible and scalable in ways that our previous tote was not and as part of this project we have built our own internal development team to remove reliance on out-sourcing for technical support and development. The net result is that we now have full have control over our technical destiny for the first time and are on the cusp of some very exciting product and partner launches. We have a series of B2B partners going live between now and the end of the year via microsites we built in-house, as well as a roll out of new sports and a weekly £1 million free to play (FTP) Pick 6 predictor game, which is generating huge interest from live and prospective B2B partners.
SBC: As the leader of a start-up in the sports betting sector, have any specific business principles or objectives changed during this period?
BM: We’ve reacted to opportunities and trends that have emerged. For example even though it will be the only game of its kind with a real money cash-out option, we didn’t foresee 12 months ago that there would be such a demand for our FTP ‘Millionaire’ game and we have rearranged our development roadmap to prioritise this product build over the past few months. However in large part our principles and objectives have remained unchanged since the time of our launch and before. We believe that the public will embrace a global liquidity pool which offers lottery-sized prizes on sport, which enables players to take control of their destiny via partial cash-out and which doesn’t penalise them for winning.
SBC: 2015 saw the launch of the Colossus Fracpot, introducing partial cash-out functions to the online casino market. Can you detail this product’s development and why did your team choose to bring partial cash-out to the casino gaming market?
BM: We launched our sports pools in 2013 with partial cash-out and have always maintained that the feature will become industry standard not only in sports betting, but also within other gaming verticals. Earlier this year the adoption by Bet365 and Paddy Power of partial cash-out cemented the feature in a sportsbook context. It is clear that players want the option of taking some profits off the table on a live bet, whilst retaining part of the bet to play for the jackpot prize and any sports betting operator not already offering partial cash-out, has the feature towards the top of their development roadmap.
In the wider gaming space we have developed the Colossus ‘Fracpot’, the world’s first cash-out slot, in partnership with CORE Gaming. The game went live exclusively with Sky Vegas in late September and the early signs are very positive. Many people told us that the popularity cash-out has achieved in sports would not translate to gaming, but we have always believed that enabling players to extract value from live positions before the conclusion of any game/event, will become a standard feature across all verticals. The Colossus ‘Fracpot’ is the first in a pipeline of partial cash-out games that we will be rolling out between now and the end of 2016.
SBC: As you know 2015 has been a period of sector consolidation, how do you feel this factor will impact betting’s operational value chain?
BM: Achieving cost savings is one of the stated rationales for industry consolidation and I think suppliers to the sector who are offering homogenous products and services will inevitably be squeezed by the current wave of mergers. A single enlarged entity will have increased bargaining power with its suppliers, as well as being able to eliminate duplication not only of internal roles but by no longer buying the same products and services twice. Five of the six companies involved in the three big mergers announced since the summer are public companies and I think it is reasonable to assume that plc shareholders rather than customers will be main beneficiaries of costs savings.
The impact of industry consolidation on Colossus is not something I spend a great deal of time considering, because although we are essentially a B2B supplier to the industry, I don’t believe our product is homogenous and therefore I don’t believe we are exposed in the way many other suppliers will be.
SBC: Your team has placed a high emphasis on in-house development of its products, in changing and more challenging market conditions how will this competency help your business?
BM: We’ve only just completed the full in-housing of our technology and development, but I believe it will prove essential to our future progress. Anyone who has been reliant on out-sourced technology will be well aware of the frustrations and limitations involved. In our case this was exacerbated because we operate the only tote with a cash-out feature, meaning there has never been existing external expertise we could hire.
We are now just beginning to reap the benefits of controlling our platform and the improvements we can make to it, as well as servicing the needs of existing and future B2B partners. We are now in a position to roll out multi-lingual and multi-currency partner microsites in a matter of weeks (when previously it was months).
SBC: Looking to 2016, what should the betting industry be preparing for in order to achieve further long term growth?
BM: Continuing the theme above, because of the need to be nimble and to evolve, I think any operator not in control of its technology platform is vulnerable. I believe this is particularly relevant because the operators who thrive in the years to come will be those whose number one priority is product investment and enhancement. I think operators and players are jaded with the marketing war of attrition that has been fought in the UK in particular over the past decade. I expect the next phase in the battle between operators will be around product, something which a review of the recent results announcements from some of the main plc companies in the sector will confirm.
Bernard Marantelli – CEO & Founder – Colossus Bets