Action plan: How Better Collective is slowly taking over the US affiliate landscape

Better Collective’s $240m acquisition of Action Network in May 2021 marked a record deal for the Copenhagen-based affiliate and one which has already begun to deliver, with the firm reporting a 435% surge in US revenue during its Q1 2022 financial results. Snagging deals with the likes of the New York Post and New York licensees, coupled with supplementary acquisitions like RotoGrinders and Canada Sports Betting, Better Collective is shaping out to be the affiliate to beat in the US. But what is the ultimate endgame for the firm stateside? Better Collective USA CEO Marc Frank Pedersen tells EGR North America.

EGR North America: In what ways does Better Collective’s strategy in the US differ from its European operations? Are there any similarities?

Marc Pedersen (MP): Our US strategy doesn’t differ that much from our European strategy, with only some slightly different nuances associated with the US market. Overall, Better Collective is a sports media business that seeks to engage and empower bettors around the globe. In the US, we have a legacy to deal with in that there’s a large proportion of people who have been betting offshore or with illegal bookies, and we now need to make those bettors aware that they can legally place bets with a safe, regulated book in many states already. This environment is somewhat different to how it evolved in Europe, where pretty much since the birth of the internet Europeans have been used to betting with sportsbooks. The Europeans were quite fast in terms of regulating this compared to the Americans. Obviously there are technicalities around regulation as the US is split into states, but aside from that, it really boils down to educating people that now they can bet safely and legally online.

EGR North America: In your opinion, how crucial has the addition of  Action Network been to Better Collective’s ongoing US growth?

MP: It’s been instrumental. Action Network is the spearhead of our US operations; its brand and brand reach are second to none. Action doesn’t really have any competitors  because it’s so unique. Yes it has the classic affiliate approach, but it also has vast options of quality content data to really empower the user experience. It has BetSync, a technology platform that helps users sync and monitor their bets, which really caters to the entire lifecycle of the user: it gets them on, helps them convert to a book, finds the right books, and keeps them engaged on a day-to-day basis. I think it is quite unique.  So, in my opinion, Action is absolutely instrumental to Better Collective’s future.

EGR North America: In your experience are US sportsbook operators more or less receptive to the idea of working with affiliates?

MP: In general, US operators have been very open and forthcoming in terms of working with affiliates. Of course there have been exceptions to this, but what’s becoming more apparent is that operators have now started to realize that they’ve been heavily investing in broad advertising, and while that gets the brand out there, it doesn’t really translate as well to the bottom line. There’s a lot more pressure now on sportsbook operators to become more profitable, and in that respect, working with an affiliate can be more efficient than broader advertising; we get paid a CPA (cost per acquisition) when we convert a player, or we get them on a revenue-share basis, and obviously revenue-share players are even more helpful for the books and something we’re very open to doing. That all takes a lot of the pressure off the upfront investment in marketing, so while we anticipate operators will scale down bonus offers and reduce TV spending, we’ve not seen any impact on our commercials.

Marc Pedersen

EGR North America: Several US operators have publicly walked back from spending large amounts of their respective budgets on marketing, particularly in New York where an early promotional blitz has since given way to more disciplined spending. How is this trend affecting you as an affiliate?

MP: As I said, we haven’t seen any implications from this on our side, but we have seen operators drastically reducing their bonus offers and many others following suit. Granted its off-season, so there could be some seasonality to it, but nonetheless I don’t anticipate that those high-level bonuses, marketing spend, and media activity will continue. I think it will eventually normalize over the long term but, speaking as an affiliate, we remain a viable option for operators with our CPA and revenue-share basis models.

EGR North America: How would you describe Better Collective’s approach to the Ontario market?

MP: It’s very similar to our overall US strategy. When it comes to the sports betting media aspect and empowering and engaging users throughout Ontario, it’s no different. We have strong US assets which have good traction in Ontario but we’ve also acquired Canada Sports Betting, one of the leading sites there, so it’s very interesting and we’ve seen a really good start to that market.

EGR North America: A number of operators have described Ontario’s market as being similar to that of a typical US state. Do you agree with this assertion from an affiliate perspective?

MP: There are some differences, but in terms of market size and potential then yes, I would say I agree. We’d consider Ontario to be around the fifth biggest state if it was in the US, so it is obviously a very significant market. Based on our experiences, interest in sports is at a similar level to the US market, and obviously we have casino on top of that as well.

EGR North America: How is the integration of the Canada Sports Betting business going?

MP: Very smoothly. Better Collective has a strong track record of acquiring companies over the years so we’re very experienced at it. Everything is progressing well; we have a good team taking care of the integration and we’re very excited about the potential of the business in the longer term.

EGR North America: How would you typify Better Collective’s approach to M&A in the US market?

MP: M&A is a key part of our collective DNA and our strategy so will always be on our radar. Having said that, we’re extremely happy with what we currently have in the US, especially with Action Network being the spearhead and market leader in many aspects. We also have the rest of the portfolio, brands like RotoGrinders on the DFS side, VegasInsider, SportsHandle, and ScoresAndOdds to name a few, so we’re really confident and pleased with what we have. For any new M&A in its traditional sense, it would have to be something truly unique that would add value to these existing brands. We always have our eyes open.

EGR North America: How would you describe your dealings with sports betting regulators in the US market?

MP: We do deal with regulators from time to time and we’ve always had a pretty open dialog with them. They’ve always been receptive to listening to our point of view whenthat’s been necessary, but it’s not very frequent.

EGR North America: Better Collective has partnered with the New York Post since January of this year. In what ways did this aid the group when sports betting was launched in the Empire State?

MP: We actually partnered with the New York Post a few weeks later than the market launch so we missed the initial first few weeks of activity. But, during the final part of the football season, there was a big frenzy of activity in New York and our partnership with the Post was critical to converting this into traffic. Sadly, we didn’t have any of the New York-based football teams as they didn’t make playoffs, but we’re looking forward to them being part of the regular season when it begins in September and the resulting bounce in activity.

EGR North America: In September, Better Collective instituted a three-year incentive plan aimed at encouraging growth across the Action Network business. Almost a year into the plan, how is that plan proceeding and are you meeting your targets?

MP: I can’t go into too much detail on that as the plan is still in force but we’re very satisfied with Action Network. The team is very committed and delivering very strong results, so we’re very happy.

EGR North America: What are Better Collective’s objectives in the US over the next five to 10 years?

MP: It’s our global strategy to become the world’s leading digital sports media group, so obviously, being present in the world’s largest media market for sports is a significant part of that ambition. To achieve our aim we’ll have to continue to grow organically as well as through acquisitions that match our long-term strategy.