Micro-bet proponent Simplebet eyes more action with parlays, sportsbooks

➤ Simplebet is looking to bring in-play, micro-parlays to the sports betting market.

➤ The company expects to break even next year.

➤ The company offers a free-to-play game on YES Network's app and is eyeing similar partnerships with other regional sports networks as well.

Simplebet Inc. is a technology company whose platform is enabling fans to place multiple in-game wagers, or micro bets, driving more fan engagement around both professional and college sports. The company has partnerships with DraftKings Inc., Bet365 Group Ltd., Betway and Intralot. It is also in discussions with other sports betting operators.

S&P Global Market Intelligence recently caught up with Simplebet co-founder and CEO Chris Bevilacqua, who previously co-founded sports media advisory and investment firm Bevilacqua Helfant Ventures and CSTV Networks, now known as CBS Sports Network. Joining the conversation was Simplebet Vice President of Corporate Development JR Hernandez. An edited transcript of that conversation follows.

S&P Global Market Intelligence: Was it a strong baseball season for Simplebet?

JR Hernandez: Volume went up each month. There was more per-game engagement, more bets per game, more entertainment. That continued into the playoffs.

Chris Bevilacqua: We crushed it with baseball. The postseason profit margin was even higher. The model is based on machine learning, so there will be even better information next year. We’re looking to add different kinds of in-play markets, including "micro-parlays."

How so?

Bevilacqua: The current product features pitch-level markets, which is the No. 1 play. "Will the next pitch be a ball, a strike or put in play?"

Bettors will be able to use their knowledge of the game, and its tendencies. Aaron Judge led the league in full counts, so another popular betting market we’ve seen is: "How many pitches will he face in the upcoming at-bat — 2, 3, 4, 5, 6 or more?"

How does Simplebet make its money via the sportsbooks?

Bevilacqua: We have a revenue-share relationship with sports-betting operators, through which we receive a percentage of their gaming revenue.

Simplebet has partnerships with DraftKings, Betway, and Intralot.

Bevilacqua: We went live in September with Bet365, with distribution on their books around the world.

What about some of the other big ones: FanDuel Inc., Caesars Entertainment Inc. and BetMGM?

Bevilacqua: We're in various stages of discussions right now.

How big can the market become?

Bevilacqua: Currently, there are some 10 million monthly active users who are legally sports betting. Data shows 100 million to 150 million have wagered on sports in some capacity, whether an actual bet, participating in a March Madness pool or buying Super Bowl boxes. Forty to 50 million MAUs? There is a lot of room to grow, but the industry must attract the casual fans.

What percentage of U.S. sports betting comes from in-play action?

Bevilacqua: About 75% of the handle in Europe is in-play, mainly through soccer, with over-unders, money-line changes that are dictated by the action on the pitch. Today in the U.S., about 30% to 40% of the action is in-play.

Within in-play, you have micro-betting, which depending on the operator, is somewhere between 25% to 30% and also growing rapidly. With 2022 post-season baseball, we saw almost 40% of live in-play [gross gaming revenue] was from our micros with key customers, and we see more coming.

What about your free-to-play game with the New York Yankees and the NBA Brooklyn Nets?

Bevilacqua: Pick-N-Play Live is a free-to-play game within the YES Network (US) app, with users playing for tokens and prizes but not betting real money. Anthony Rizzo is coming up and, for example, you can make a bet on whether he gets a hit, makes an out, or gets a base on balls. The game is based on our same real-money odds that update with every pitch, and users play against each other in three-inning contests

Can I play against you two?

Bevilacqua: Not yet, but we do want to build that feature.

How much activity?

Bevilacqua: This baseball season on average users were betting as much as 40 times a game, so they are watching the game longer. They are more engaged.

We think our product may ultimately have as much benefit for media companies as for sports-betting operators. ESPN (US) is paying $8 billion to $9 billion [annually] for live broadcast rights for top sports. If they could get viewers to watch 10% longer, it would be worth a lot to them.

Will there be free-to-play games with other RSNs?

Hernandez: We’re trying to figure out a way to work with the company that has the biggest RSN portfolio in the country. They are looking at ways to increase engagement. We have one. As to the other independent RSN owners, it's a matter of keeping up with the Joneses. They see what's going on with the [Yankee] pinstripes.

Simplebet is working with the big sports here in the U.S.: NFL, MLB, NBA, college football and basketball. What about tennis and golf?

Bevilacqua: Those sports [already on Simplebet] account for 90% of the betting volume in the U.S. All the others add up to less than 10%. But now with Bet365 in Europe, we're taking a more global view. The NBA is a global sport. Soccer, tennis and golf are at the top of the list for global sports.

Simplebet has raised some $80 million. Are more funding rounds on the way?

Bevilacqua: Our last one was our $30 million Series C round led by Anti Fund. We don't need to raise anything right now. However, we are considering some growth capital, which we believe will help accelerate distribution, as well as add resources into the platform business we’ve started. We’re in a good position. The product is gaining traction. Revenues are starting to ramp up. We're on pace to break even next year. The question is how to accelerate that.

Hernandez: It might be the third quarter. Depending on rollouts and [football] seasonality. But MLB is a big product for us.

For the U.S. sports betting industry, the NFL is top dog, but for Simplebet and its micro-bettors, it's baseball?

Bevilacqua: In terms of volume, MLB has more revenue, more markets. There are 2,430 MLB games; the NFL has 276.