September is a big month for sports fans. The NHL, NFL and NCAA football seasons all start; the NBA, which kicks off in October, starts to spin out the next season’s big narratives; and the MLB starts winding down, with teams jockeying for playoff spots before the big show. It’s a reliably busy time of year for theScore, a Toronto-based sports media company, but the launch of its new sports betting app, theScore Bet, has made the month anything but routine.
Launched at the beginning of September in New Jersey, theScore Bet is the company’s big play to capture a piece of the $150-billion sports betting market in the U.S. Canadian Gaming Business spoke with John Levy, CEO of theScore, about why developing a sportsbook was a natural decision for the company, and why theScore Bet has an edge of its competitors in the sports betting space.
This interview has been edited for length and clarity.
CGB: Tell me about theScore Bet.
John Levy: We’ve always dealt openly and honestly with betting, and always thought of it as part of what people are passionate about in sports — even our TV network had a ticker on it with the odds. As we migrated to mobile technology, we skewed a lot younger and discussed sports in an open and authentic way, and naturally, sports betting was a part of that. It was something we thought about and integrated into what we were offering. We always hoped that at some point in the future sports betting would come out into the open and be licensed, legalized and taxed, and that’s what happened in the U.S.
We thought the best approach was to face it head-on and become the operator of a sportsbook. To do that, we created the new app, theScore Bet, which is basically a sister app to theScore. Our approach is pretty different because here’s a lot of good betting apps out there, in Europe, the grey market, in North America, and now in the real market in the U.S., but those betting apps are really just transactional. We wanted to create something that was more integrated into our core app, and give users the opportunity to bet inside theScore brand. It’s an exciting time for us, and it’s the culmination of something we’ve been thinking about for a whole bunch of years.
So betting on sports was already part of your DNA. The legal avenue was just available now.
Correct. We could’ve gotten involved in the grey market, but we didn’t. We wanted to stay clean because we knew that, once it opened up, in order to get licensed and be a participant, you have to come with clean hands, so that’s what we did. But it’s really a natural extension of what we were doing.
The other companies involved in New Jersey, where we launched, are predominantly betting apps, and they’re trying to integrate content and data into their apps, and we have the opposite philosophy. We already have you loving our content and loving our app. It’s a really different way of looking at the whole industry, and it’s very exciting.
Why did you decide to launch in New Jersey?
New Jersey was one of the first to become legal; it’s been up and operating for about a year now. Once PASPA [the Professional and Amateur Sports Protection Act, which made sports betting illegal] fell about 11 or 12 months ago, we had to do a whole bunch of things to be ready to launch. First, we had to build the technology. We went out and did a deal with Bet Works to build the back-end betting technology that we could integrate with the front end of the app. It was a lot of work; six months of heavy, heavy lifting, and because of who we are and what we are, we weren’t going to come to market with any product that was any less effective than what we already had. We had certain expectations that had to be met.
Number two, we had to get a license to operate in that jurisdiction, so through Bet Works and the people that became our partners, we got to know people in New Jersey, and the way the licensing worked in New Jersey, which was very favourable. Basically, the licensing process in New Jersey was any designated racetracks or casino had the ability to issue or operate up to three licenses, or what are called skins. We hooked up with this guy, Dennis Drazin, who was very instrumental in New Jersey in actually getting the law changed with Governor Christie, and he has a racetrack called Monmouth Park, and he was awarded three licenses. Two were given to other people, and we signed the third.
New Jersey is a very robust state. The sports betting that was already starting before we got there was generating tremendous numbers. In the first year of operation, there was approximately $3.2 billion wagered in New Jersey alone. It’s crazy, it’s unbelievable. And about 65 or 70 per cent of that market is cornered by DraftKings and FanDuel. I think William Hill has a third, and the major other brands are 1 per cent or something each. It’s a great opportunity for us to get into a state with that much interest in sports betting, and for us to show what we can do — over time, not overnight — to grab a significant portion of the market share.
Are you planning to roll out elsewhere?
Absolutely. We also did a deal with one of the regional gaming companies in the States called Penn National, which gave us the ability to basically open up in 11 more states in the U.S. as the regulations open up on a state-by-state basis. It gives us two states that are operable right away, which are Indiana and Iowa, and probably in the next 9 to 12 months you’ll see theScore Bet show up in those states as well. It gives us a roadmap for the next couple of years, and in addition to New Jersey, it lets us cover about 30 per cent of the population of the United States. Plus, it doesn’t preclude us from doing deals with other states. For example, New York isn’t part of that for us, and Florida isn’t part of that. Our intention is pretty clear: we’ve set our goal to become one of the predominant sports betting companies in North America.
The app just launched, but what’s the pickup been like? Was there anything unexpected?
Obviously, it’s really early days. We’re about two-and-a-half weeks in, but things are going very well. What we’re really focusing on, to be quite honest, is to make sure that everything is operating at the level that’s expected. It’s not just the betting app; it’s also something integrated and intertwined with our core app. Obviously, there are little glitches here and there, but nothing we didn’t anticipate, nothing we couldn’t handle, and we’re really very proud of our maintenance team, and our engineers who worked really hard and who put us in a good position.
When we think about how it’s going to do, we kind of think in the context of quarters and months. We’re expecting to have significant market share by the end of the first year and into our second year. That doesn’t mean that we’re not looking at it on a day-to-day and week-to-week basis, but in the short term, the numbers of kind of meaningless. But are we happy? Yeah, we’re very happy.
Are users transitioning between the core app and betting app as intended?
Absolutely. That’s one of the things we’re watching very carefully right now, because that’s how it was designed. What we’re trying to do is reflect the natural behaviour of how people bet on sports.
One of the phenomena that happened in the last few years is in-game betting. In baseball, they’ll bet the first three innings, then the next three innings, and the next three. In football, baseball, basketball, they’ll bet on almost a play-by-play basis. About 40 to 50 per cent of all betting on sports now is in-game betting. So again, that leads naturally to how people use our app. When you’re on our app, if you favour a team, we send you all this information and all these alerts as the game is in progress, and then you decide to make another bet in the game, or change your bet. It’s a natural behaviour. That’s why we think it will be so effective over time.