Q&A: SportsGrid CEO reveals plans to explore "untapped" casino market by end of 2024

It has been eight years since Jeremy Stein won $2m playing fantasy sports, a feat achieved largely due to the algorithms he developed himself to predict the outcomes of fixtures.

During those eight years, plenty has changed. One year later, in 2017, Stein put those algorithms to an alternate use, co-founding SportsGrid alongside business partner Louis Maione. The pair have barely looked back since, with Stein serving as CEO and Maione as president and chief strategy officer.

In neat annual increments, 2018 saw another momentous landmark for Stein and Maione. PASPA was repealed by the Supreme Court, something that came to the surprise of Stein but not to the optimistic Maione, who, the CEO reveals, was always hopeful that the legalization of sports betting would be just around the corner.

Using the aforementioned algorithms, SportsGrid dissects key data points and relays them to the firm’s on-air talent to use during the daily 18 hours of live coverage produced at minimal cost, something Stein regards as a vital KPI for the group.

With a one-year headstart on its competitors, SportsGrid was primed and ready for growth following the fall of PASPA and quickly established itself by snapping up partnerships with operators looking for further brand exposure in the nascent space.

Fast forward to 2024 and the company now boasts the likes of operating giants such as FanDuel and BetMGM as partners, while streaming for free on platforms like Amazon Prime and YouTube TV. It’s deals such as these that helped SportsGrid receive an acquisition offer worth $240m in 2022, although that deal eventually fell through.

The group boasts plenty of industry talent, though Stein admits that SportsGrid is always on the hunt for more. The CEO spearheads an operation that saw its revenue rise 1,888% in 2023, according to US business magazine Inc.

However, Stein has made clear that he is keen to shed SportsGrid’s label as ‘the sports betting channel’ in favor of being viewed as ‘the gambling channel’, with the casino market one “untapped market” he is clearly interested in exploring.

Speaking to EGR North America, Stein reflects on the origins of the company he helped build and now oversees as CEO, while also revealing what the rest of 2024 could look like at SportsGrid.

EGR North America (EGR NA): In 2016, you played fantasy sports as a full-time job, having created algorithms to predict the outcome. How vital was that expertise when founding SportsGrid and what inspired you to start the company in the first place?

Jeremy Stein (JS): It was incredibly important, SportsGrid’s thesis was ‘sports is data,’ you don’t need a large team to recap last night’s game and you don’t need a large team to predict tonight’s game. So, as far as our core thesis, marrying distribution with predictive technology would significantly lower the cost of content production. And that thesis has held true. SportsGrid has evolved a lot since we began almost seven years ago but it’s not just that thesis and low-cost content production. There’s also a degree of credibility that came alongside of it.

We got to tell the story that said: ‘Hey, we’re experienced in this space, we’re just not newcomers just because sports betting is legal.”

We’re actually experts who understand what we’re talking about and are able to make signal from the noise. And we were able to deliver that to our viewership base and we’ve been growing up into the ride ever since.

EGR NA: SportsGrid was founded before sports betting was legal in the United States. How was the transition process when PASPA fell and how did you react in real time?

JS: So, my business partner, our president and co-founder Louis Maione, he was very strongly of the opinion that sports betting would become legal within two years of starting SportsGrid. I obviously thought it was going to be a much, much longer time horizon. But it turned out that, I want to say within the first nine months, PASPA was repealed and it’s really an interesting shift.

The government flipped the switch and said: “Grow in ways that you never thought were imaginable.” A lot of our content when we first started was 80/20 fantasy sports to sports betting. We quickly made the shift as soon as PASPA was repealed to be 80/20 in reverse where it was sports betting and then fantasy – the rest is history.

EGR NA: You’ve got some real senior talent in the business such as ex-FanDuel head Adam Kaplan as COO and former Sportradar exec Jason Sukhraj. What do people with industry experience from the other side of the fence bring to the table?

JS: They bring a lot. Our business is incredibly diverse, so they bring a lot of knowledge in new business lines. They bring a lot of expertise within our industry. There’s a lot of relationships that they have.

It also lends to the credibility factor. Going back to kind of the first question, we like to hire experts within our industry, and we believe that getting the right people in place in our company is what leads to success. People build companies.

EGR NA: Are you looking to bring in more industry talent?

JS: Yes, of course. SportsGrid is a growing company and we’re always looking for bright people within our industry. And there’s a really large area that we’re specifically interested in – casino content.

SportsGrid, right now, we’re known as the sports betting channel, but really, we are the gambling channel. We’re going to be producing a lot of content that is geared towards casino, whether it’s land-based or online. That’s an expertise that we do have within our company, but we’re always looking for more.

EGR NA: SportsGrid currently streams on platforms such as Amazon Prime, YouTubeTV and Roku for free. How does that dynamic work in a way that benefits the company?

JS: It’s huge. When we talk about our competitors, we really point to linear television: the ESPNs of the world. They are competing on cable, which is a shrinking market. Last year was the first year where homes that did not subscribe to cable outnumber those that do.

SportsGrid is really a connected TV company. And every TV that’s being produced today is a connected TV, so that gives us a very large market to tap into. We often talk about cord-cutters when it comes to linear television but really we’re also targeting a large segment of the market that ‘cord nevers’. There’s a large population out there that has never subscribed to cable and likely never will.

So, being free and clear is very important because it also gives us the opportunity to reach consumers wherever they are, without a paywall, which is very important.

EGR NA: Given the nature of SportsGrid’s 24/7 coverage across multiple media destinations, how vital is constant impartiality in the content being delivered to bettors of varying experience?

JS: Our content has evolved. When we first began it was purely data driven and we were producing less content. Now we’re producing 18 hours of live original video, and that has allowed us to segment our customer base.

We use data not just to produce our programming but to also understand our customer. We understand the days and times of the week that are very important. What we do have now is we don’t just have a news focus; we do also have some shows that are opinion-based. We’re trying to go a little bit broader and serve the entire sports fan base.

We do believe that impartiality is very important, particularly when you’re talking about a sponsored show like a FanDuel or a BetMGM. But we do have opinion shows because that’s also important in media.

EGR NA: How important is intellectual property when it comes to differentiating SportsGrid?

JS: We think it’s really important. Intellectual property means a few things at SportsGrid. It means our predictive technology that we’ve been using since day one but it’s also our architecture and infrastructure – how SportsGrid is designed from a studio perspective and how we actually are able to deliver our feeds in a cost-efficient manner to all of the platforms. That’s really one of our most closely guarded secrets. It’s incredibly important and that’s some of the secret sauce that makes us so efficient in producing content.

EGR NA: How does Sportsgrid appeal and engage with bettors who are more casual in their approach to gambling?

JS: What we like to say at SportsGrid is we ‘super serve’ the audience. So, we’re not just catering to the experienced gamblers, we are in the business of creating and helping new gamblers become more experienced. We have a lot of educational content.

We used to have a segment called ‘Gambling University’ [that explained things like] how you read the board in a sportsbook, this is what a parlay is, this is how you construct one, this is what all the odds mean. It’s very important and that’s something that’s also very important to our partners in FanDuel and MGM.

We want to make sure we are super serving every single consumer who interacts with SportsGrid. So, we do touch every end of the spectrum.

EGR NA: What does SportsGrid do to promote a message in regard to safer gambling practices?

JS: We are a member of the AGA [American Gaming Association], we have disclaimers on many of our programs, all of our websites, and we do a lot of responsible gambling messaging throughout our network.

It’s not just important to SportsGrid, it is also very important to our partners, and we do want to make sure people are doing this in a responsible manner.

Sports gambling is an entertainment product and we want to make sure it stays an entertainment product so people can enjoy and have fun doing it [betting] in a responsible and safe way.

EGR NA: How do you view the wider US affiliate landscape at the moment?

It’s interesting. Affiliates right now in the United States – they’re facing some headwinds, for sure.

All of the major media partners become deindexed from Google, and that has been a significant portion of many large affiliate strategies within the United States. So, in many respects I think that some of them are, I wouldn’t say starting from zero, but they’re close.

They’ve kind of been set back significantly. In addition to that, you have what largely looks like a duopoly in many mature states with FanDuel and DraftKings leading the way. They’ve already acquired a large swath of customers so it’s very difficult to send them first-time depositors, so affiliates are now trying to operate on the fringes for example and send new customers to new sportsbooks like the Fanatics of the world.

You’re starting to see the US get mature a little bit. Sports betting is legal in over 32 states in the US, so, I think as all of that happens and sportsbooks get a better handle on LTVs – like the LTV is an unknown quantity in the New Jerseys of the world, in all the mature markets – I think you’re going to see that spending start to pare back.

EGR NA: What KPIs do you look out for?

JS: Our core KPI is our cost-per-video hour, so what we do is we look at all of our expenses, not just content production, we look at legal, all of that we throw it in, and we try to keep our cost-per-video hour around $2,100. That’s kind of our metric for success.

We know that if we can produce content, at that cost, we are going to be wildly successful in the future.

EGR NA: What are the core focus areas for the rest of 2024 at SportsGrid? What challenges do you anticipate?

JS: We have a few things coming down the pipeline. We are going to enter the affiliate market and we are going to do that with a partner. It’s something we’re very excited about. Even though the affiliate market has its challenges, SportsGrid has never taken any affiliate dollars whatsoever.

So that’s exciting for us and it kind of goes with our ethos of ‘let’s just grow our audience in every way that we can’.

Our big focus is we are pivoting our content mix. We are very interested in casino content. We believe that online casino and land-based casino is a large, untapped market from a content perspective. Obviously, very high margin products for the online operators and you’re going to see a big focus on that from us.

That’s kind of our shift. We’re not going to be known just ‘a sports betting channel’. We are going to be ‘the gambling channel’.