Number of employees: 1-5
Short URL: vator.co/bet-me
Bet ME is a low cost online gambling site focusing on sports/financial and special interest (e.g. politics) betting. Unlike traditional bookmakers, who take a spread on each bet made, Bet ME intends to only take a 50 pence transaction fee on each bet made between punters.
Online gambling has been growing tremendously in recent years. With what started as a modest beginning on horse betting, the betting industry has evolved into a complex industry. Though the number of sites has risen, one thing has remained constant: the spread (or betting vig or the commission) that a betting site makes on each transaction.
Unlike traditional bookmakers, who take a spread on each bet made, I would like to make a site that takes only 50-pence transaction fee on each bet made between users (punters). Rather than being the “bookie” and having a potential exposure on the outcome of events, my website would provide a “market-place” for online gamblers to set their own odds or accept odds offered by others. In doing so, I aim to provide the lowest transaction fees, encouraging users to make my website their primary betting site. By coupling lowest cost transaction fees with ease of use, I will also provide a secure, low-risk environment that will encourage new users to gamble online by choosing the category of their choice such as sports, financial and special interest (e.g. politics).
Now you would argue that by charging just 50-pence, I am leaving money on the table. That’s where the second part of the website kicks in. The website will provide users the ability to follow specific players that have shown success in order to gain valuable insight and tag-along their bets to increase their chances of winning. Thus, even though I will be charging a very small amount to get the big fishes hooked to my website, amateurs and newbies would flock as well to have more chances of winning by following other punters, i.e., by using “Copy ME”. There will be other features as well that are not currently on other betting websites such as having private bets with your friends and getting social recognition for top bets made.
The market research encourages me to target United Kingdom as the primary market. This market has a historical cultural background in gambling and a combined online gambling industry of over GBP 2.5 billion which represents a small segment of the total gambling industry (GBP 75.4 billion is spent annually). Despite being a small segment it has experienced significant growth rates in previous years. Because of these factors I believe that my website will be well positioned to exploit the low cost gambling model across a range of technology including mobile platforms.
The punter has the option to bet on sports, financials, social and fantasy markets. Bet ME will act as a market place to match punters who back an event to punters who lay the same event. Thus, the revenues of Bet ME are not linked to the outcome of the event. Hence, the revenues are totally non-risky.
Bet ME has a value-driven business model with the major source of revenue being the fixed fee of 50 pence per transaction. While this seems like a small amount, the number of betting transactions done everyday is enormous. For example, there were 946 million bets placed on betting site Betfair in 2011. Also, the option of “Copy ME” (amateur punters copying bets made by professional punters) will lead to more number of bets being made.
Bet ME will work closely with bet comparison websites such as www.oddsportal.com, www.oddscomparisons.com, and www.wincomparator.com and will be hedging any bets that are made on our site by betting opposite on other sites. Bet ME also envisions generating revenue through advertising on streaming videos of matches. This will be a similar model as employed by YouTube. Other sources of revenue will come from cash holding and by opening an e-shop where punters can buy Bet ME souvenirs.
Bet ME plans to scale its business model by doing graphical expansion. We plan to launch Bet ME initially in UK. The next targeted country in terms of expansion is Australia. According to IBIS World’s latest industry report, the total betting revenue generated in Australia in 2010 is AUD 25 Billion with an annual growth rate of 1.8% from 2007-2012. We will also scale Bet ME by expanding gambling categories to adapt to new betting trends in the market.
Substitutes and competitors exist, but we feel Bet ME’s value proposition is unique and will differentiate us from them. The dominant players in the industry are William Hill, Ladbrokes, Betfair, Bet365, PaddyPower and 888. These sportsbooks log in thousands of transactions on a daily basis. Given the large revenues of each of these players, they will suffer significantly if they try and compete with our low cost model.
Moreover, many of the features are not available on other websites such as a cheap fee of only 50 pence/transaction, option to bet privately with friends, “Copy Me” option to copy bets of other players and social recognition.
Finally, the existence of two very distinct and different customer segments is extremely useful to both segments as well as for Bet ME. Bet ME will first attract professional punters by charging them extremely low fees. Then Bet ME will go after its second segment, the amateur punters by providing them opportunity to follow top punters. This will be attractive to amateur punters as they have higher chance of winning now. The number of followers as well as rankings of punters will be published on the website. The professional punters will work hard to maintain their high rankings. The opportunity to do private betting with friends will force college students to invite their friends on the website. All this will lead to a network effect, which is something similar in social websites. Because players will have their historic successes as well as all their friends on Bet ME, players will not leave Bet ME.