Q&A: Paris Smith on fostering innovation and why “not all startups are created equal”

Paris Smith, former CEO of Pinnacle, stepped away from her role with the Curaçao-headquartered operator in July 2023, calling time on a 17-year stint in the top job at a bookmaker with a repetition for fearlessly laying high-stakes action, including sharp money.

During her time with the high-volume, low-margin operation, she oversaw Pinnacle’s transition from a business taking bets over the phone to a major online sports and esports bookmaker employing around 600 people.

However, Smith admits she became jaded by the “grind” of the job and travelling and needed a change, one that would involve “creating and innovating”. Since departing Pinnacle, Smith has founded and launched igaming advisory service Defy the Odds, alongside fellow industry veterans and friends Kelly Kehn (co-founder of the All-In Diversity Project) and Sue Schneider (former SBC vice-president).

The organisation provides a leg-up for fledgling businesses in the igaming sector, leaning on the expertise and network connections of the three co-founders to connect entrepreneurs with the right investors. “The biggest part was helping people who normally don’t get a strong voice, who have good ideas but don’t necessarily know how to navigate the industry,” Smith explains in a conversation with EGR.

EGR: You built quite the legacy at Pinnacle, overseeing its rise to become one of the biggest bookmakers in the world. Why did you feel it was time to step down?

Paris Smith (PS): I’ve been in this operational grind for about 28 years after spending 17 years at Pinnacle and 11 with other operators. I loved it and I loved the whole transition of the business, but it did become less exciting for me. I was always a big proponent of regulation, compliance and KYC because I always felt like was a critical part of making a stronger industry. I think where I started getting a little bit disenchanted was when the regulators started dictating rather than regulating.

I felt like it could have been a win-win for everybody if it was executed properly. When I saw it wasn’t working that way, I thought to myself that I’ve done this grind for so long, six or seven days a week, working 12-hour days and travelling constantly, so it felt like it was time to leave. I had done a lot to build the company and put in place a very mature organisation. When I started, we had 85 employees. When I left, it was more than 600. I took Pinnacle from a call centre sportsbook to a proper organisation, so it had the capability to grow and transition alongside the changes made to the industry over the last 17 years.

EGR: How much has the industry changed since you started out, and is it for the better or for the worse?

PS: The biggest fundamental change is probably technology. Additionally, with the regulation from within the US, the product has changed from a sportsbook to more of an entertainment platform. One thing that’s consistent is there is always a challenge and there is always a solution. So, I think the biggest thing you have is there’s still a grey market. However, the grey market exists because people can’t afford to get into the regulated market due to it being unintentionally monopolised by who’s already there – as you can see from all the [operator] exits.

All of the gamification and other aspects which talk to a new generation are very important, and a lot of the regulated books have really nailed it with that. However, I believe what we need to focus on in the regulated space is being able to cater to an actual sports bettor. A sports bettor, in the old school sense of the word, who isn’t going to bet on same game parlays or micro-betting. If you don’t accommodate them through strong pricing for straights, sides and totals then, unintentionally, you will create a pathway to the black market.

EGR: Where did the idea for Defy the Odds come from?

PS: I have a company called Life Winning LLC, which I set up directly after I left Pinnacle. That organisation is very small with two co-founders, and that’s where all the investments come from – some small angel investing with a little advising and consulting for leadership and strategy. While trying to formulate what this could and should be, I invited two people I respect more than anyone in the industry in the form of Kelly Kehn and Sue Schneider

From that meeting came Defy the Odds. We realised that with us, one plus one equals three. With a combined 80 years’ industry experience, we’re taking everything we’ve done – our network, knowledge and expertise – and we thought about how we could make a difference in the industry. The biggest part was helping people who normally don’t get a strong voice, who have good ideas but don’t necessarily know how to navigate the industry.

Generally speaking, it’s the people who need extra support in the space that are constantly overlooked. Since we put it out there, the response has been amazing. We’ve gone pretty much full throttle and reached out to potential partners that could be investment partners in the future. We’ve worked with Zero Labs, which is a phenomenal organisation from an incubator perspective, and we’ve done a lot with Betting Startups with Jesse [Learmonth] and Thomas [Coiner]. We’re solidifying and formalising the ecosystem that is the catalyst for people to succeed.

The reality is not all startups are created equal. It can be tough when you have to tell someone their idea won’t work, but the key thing is looking at how you pivot from that point. A lot of times people have the right mindset but not necessarily the right execution of the idea, and that’s where we want to help.

EGR: Were you surprised to receive such a positive response from the industry?

PS: I shouldn’t have been, given all our experience. People see there’s a need and a gap in the industry. I’ve always believed having more inclusion creates innovation. We’ve done a great job so far of creating that and broadening the awareness of it. It’s been extremely humbling to have the level of support we’ve had.

EGR: What qualities do you and your partners bring to the table?

PS: We all get along amazingly and have been natural friends forever. Sue [Schneider] has the organisational nous from all the events that she’s planned or participated in, and all the networking she’s done at those events. She brings a lot of experience from a very broad perspective of igaming, including sportsbook, casino and all the different components.

What I love about Kelly [Kehn] is she has operational experience from many years ago with casino, horseracing and sports betting. She was also part of a fund and has the passion for diversity and inclusion. Then you have me, who has 28 years of sports betting and gaming experience. I’ve been around from the very inception of it operationally, when there was no internet.

The three of us understand the intricacies of operational workings and how that can translate to a startup. You might have a great idea, but you need to ask yourself why nobody else has done it – a lot of times it doesn’t make sense in the ecosystem of an operation, or integration might be a problem.

I can really help ascertain whether an idea is something a sportsbook would identify with and want to integrate. We have three very broad areas and between us we encompass the ecosystem of the entire industry – if we don’t know something, we know someone who does.

EGR: What sort of businesses are you looking to support?

PS: We’re targeting people who need help not only navigating the ecosystem but need help with things like strategy and leadership. Mainly, we’re looking to work with people who are really going to stimulate innovation within the industry.

EGR: What’s the biggest challenge you anticipate about working with a startup compared to a larger company?

PS: The reason why this is so attractive to me is that when I started, it was not only with a startup company, but a startup industry. That is when I fell in love with creating and innovating. There were so many things from the inception of the industry where I was part of the conversation or part of the innovation, and that’s what excites me. As I progressed, the passion was always there because of the people, but the work became less exciting.

Now I’m going back to where my comfort level is, as opposed to something very large where there’s a lot of red tape and people to consider. Whereas now we’re doing what’s best. There’s not a whole lot of conversation and negotiation that needs to be had because we’re all extremely aligned. So, for me, it’s been extremely positive and exciting, bringing me back to where my happy place is.

EGR: How can the igaming industry benefit from Defy the Odds being a female-led firm?

PS: Companies are always trying to aim for a more diverse player base, and to do that you need diversification within your teams, as that will breed innovation. That’s really where we need to start – supporting and helping people who normally don’t get a seat at the table – we need to create those seats for people.

EGR: Do you think the industry lacks entrepreneurs and innovation?

PS: There’s a number of investors trying to help guide entrepreneurs. There’s certainly not a shortage of entrepreneurs, we just need to start helping people understand the types of problems that new companies are facing. Is there an entrepreneurial solution to help try and solve those problems?

There are so many instances where you have the idea but, if you don’t understand the industry, you won’t recognise a barrier to entry when it arrives. As entrepreneurs spend more time going to conferences, listening and pitching, it will help them identify and shape what the right solution is and create innovation in that way.

EGR: How much is it down to regulation and compliance?

PS: It’s a huge part of it that will really dampen the success rate of people starting out in the industry. For sportsbooks to get regulated in every US state, you have legal fees, compliance fees, then you have to build the systems to specific compliance regulations. People are going to have to write bigger cheques for startups, but it doesn’t look like we’re going in that direction.

People are going to come up with ideas, then have to go straight down the acquisition route because they’re going to require the support of already-regulated companies. Regulation will definitely stifle entrepreneurs and innovation. It already stifles innovation among companies. People only have so much runway for bandwidth and roadmaps.  

EGR: What’s the most important piece of wisdom you’ve gained from your time in the industry you will look to impart to those just starting out?

PS: One thing is you always need to be aware. This is a very dynamic industry and things do shift. You can have the best laid plans but, if you’re not aware of all the intricacies of what’s happening, you could end up going strong and investing hard without realising the tide is changing. Having that awareness and being able to pivot if you have to is really important.

Also, if you want to be successful, the reality is you need to focus on the people. The interesting thing is I’ve learned more from stepping away from the industry. Now I can look back at the things I did, and I can see where I could have done things better and worked differently. That experience helps me to guide people towards their best solutions when they share their problems with me.