Waterhouse Venture Capital: Market Assessment

## Waterhouse Venture Capital: Market Assessment – Promotion & Partners – iGB

In a recent article, Tom Waterhouse, a partner at Waterhouse Venture Capital, examined the possibilities for partners in developing regulated markets, particularly in the field of digital currency wagering.

**Home > Promotion & Partners > Waterhouse Venture Capital: Market Assessment**

**Waterhouse Venture Capital: Market Assessment**

As we have previously talked about in our communications (e.g., July 2022), gambling partners primarily make money by guiding bettors to gambling businesses.

The main revenue models include profit sharing and cost per acquisition (CPA). Gambling partners utilize various methods to drive traffic to gambling businesses. These methods include creating sports-focused media content or contrasting odds and promotions from different gambling businesses.

Oddschecker is one of the most well-known gambling business comparison websites. The platform contrasts odds and promotions from over 25 UK gambling businesses, while also providing betting advice and insights.

**Developing Markets**

Partners like Oddschecker are particularly flourishing in developing markets, such as the US, as operators aggressively compete for clients. Both large and small operators spend up to $1000 to acquire a single client. This utilizes all available promotional channels, including affiliate marketing.

The two largest gambling operators in the US spend over $1 billion on promotion.

Many partners have already discovered the potential of the US market.

As a result, they are concentrating on natural expansion and mergers and acquisitions in the area.

In May of 2021, Better Collective finalized a $240 million takeover of The Action Network. The Action Network provides odds comparisons, various podcasts, and other forms of media content.

In July of 2021, Bruin Capital purchased Oddschecker from Flutter for a possible total price of $218 million ($190 million upfront, plus delayed considerations). With this purchase, Bruin plans to improve Oddschecker’s services while supporting its entry into the profitable US market.

“There’s a strong connection between Oddschecker’s development in the UK and its chance in the US, where the market is very fragmented and discovery and customer acquisition expertise will be highly sought after,” said George Pyne, founder of Bruin Capital.

Moreover, in November of 2021, FansUnite acquired US Affiliates, a group of US affiliate websites, for $58.2 million, representing 9.7x EBITDA. At the time of the acquisition, US Affiliates had driven 150,000 new depositing customers to US betting operators. These included DraftKings, FanDuel, and BetMGM.

**Explore Crypto Betting Odds**

While the US and other newly regulated markets offer exciting opportunities for affiliates, we are particularly enthusiastic about the prospects for affiliates focused on directing bettors to cryptocurrency betting operators.

We last reported on the wider opportunity of cryptocurrency betting in May.

Worldwide data indicates that the global online wagering sector produced roughly $58.2 billion in income in 2021 and is anticipated to achieve $145.6 billion by 2030.

We are convinced that the widespread acceptance of cryptocurrency gambling will be a key driver of future expansion in the sector.

Similar to the situation in the American market, there are currently many cryptocurrency gambling operators competing for market share. As a result, affiliate businesses have been generously compensated for supplying cryptocurrency operators with depositing bettors. Affiliate businesses provide revenue shares of up to 50%.

We believe there is a significant opportunity for comparison websites specifically targeting cryptocurrency operators. This untapped opportunity will continue to be appealing as the cryptocurrency gambling industry matures.

Given that OddsChecker was sold for $218 million and 97% of its income came from the United Kingdom, an odds comparison website operating in the larger cryptocurrency gambling space would be a tremendous opportunity.

Moreover, unlike cryptocurrency operators themselves, affiliate companies are typically valued at significantly higher earnings multiples. For example, Better Collective is currently valued at 12.5x EBITDA.

Betscanner
Betscanner’s primary service will be to compare the odds on sporting events offered by cryptocurrency gambling companies.

The data required for odds comparison will be obtained through data extraction or by collaborating directly with gambling companies.

The primary emphasis will be on simplifying the process of comparing betting odds in real-time, enhancing the user experience, and concentrating on esports.

The organization will generate revenue by charging operators a monthly subscription. This will aid in attracting new customers and retaining existing ones by ensuring their visibility in the marketplace. They will utilize a range of marketing strategies, including search engine optimization (SEO), Google Ads, influencer marketing, social media campaigns, and unique sign-up incentives.

Betscanner is one of many promising ventures that Waterhouse VC is involved in.

**Crucial Note**

Please be aware that the information provided above regarding OddsChecker, FanDuel, DraftKings, Better Collective, The Action Network, Bruin Capital, Flutter, FansUnite, American Affiliate, and BetMGM is derived from publicly accessible information about these entities. It should not be interpreted as financial guidance. The information about Betscanner is based on data supplied by the company and should not be construed as financial advice. Waterhouse VC has an option trade and has entered into an agreement with Betscanner. The content of this document is for general informational purposes only and does not constitute investment advice. You should consult with a qualified financial advisor for guidance tailored to your individual circumstances.

**Solely for General Reference**

This information is intended for general reference only and does not constitute an offer to purchase or sell any financial product or service.

This document is designed for professional investors who fulfill the criteria outlined in the Australian Corporations Act. It is not intended to provide financial or tax counsel and does not take into account your individual circumstances. Although we believe this information is accurate, we cannot provide a guarantee of its correctness. Prior performance does not serve as an assurance of future outcomes. Sandford Capital, Waterhouse VC, and any other involved parties are not liable for any statements made within this document.

Waterhouse VC is an Australian investment fund accessible to global institutional investors. The minimum investment amount is A$1,000,000 or the equivalent in other currencies. This document was compiled by Waterhouse VC Pty Ltd, the trustee responsible for the Waterhouse VC Fund.

The appointed representative, acting on behalf of Sandford Capital Pty Limited, a company registered in Australia (ABN 82 600 590 887) and licensed by the Australian Securities and Investments Commission (AFSL 461981), has designated Sandford Capital as its authorized intermediary under the Corporations Act 2001 (Cth) to facilitate the offering, modification, or sale of units within the Fund.

**Results**

Prior results achieved by Waterhouse VC do not provide a reliable indication of future outcomes. Waterhouse VC Pty Ltd makes no guarantees regarding the success of any investment strategy or the recovery of invested capital, nor does it ensure any specific rate of return for investors. Tax implications, where applicable, have not been factored into these considerations. We strongly advise you to adopt a long-term perspective when approaching investments.

**Ownership**

Copyright belongs to Waterhouse VC Pty Ltd, registered in Australia (ACN 635 494 861). Reproduction of any portion of this message or its contents is strictly prohibited without prior written permission from Waterhouse VC.

**Governing Law**

These Terms of Use are subject to and interpreted in accordance with the legal framework of New South Wales. By acknowledging these Terms of Use, you consent to the non-exclusive jurisdiction of the courts of New South Wales in any legal proceedings related to these Terms of Use.

**Sign up for the Interactive Gaming Newsletter**