TheScore CEO on competing with FanDuel and Fox Bet

Very few US products have been as hotly anticipated as sports media giant theScore’s. With the promise of a seamless Facebook and Messenger-style UX and UI between apps and a Sky Bet-style brand integration, expectations ahead of the product’s launch were particularly high.

“I’m excited by them entering the market to see what they can do because it’s such a different approach,” PointsBet US CEO Johnny Aitken says. His sentiment seems to be the consensus across the industry, as theScore is currently the only media company operating its own betting product in the US.

The operator is at a huge advantage in already having users to convert to its new betting app. With 395 million user sessions on a base of 3.9m monthly active users (as of July 2019), and an estimated 50% of those being bettors, the operator’s task is to entice those users to bet with theScore by leveraging their data and preferences and sending them targeted notifications for bets they would be most likely to make. On top of that, theScore is striving to have a completely seamless user experience between the two apps.

Three weeks on from theScore Bet app’s launch in New Jersey, and CEO and founder of theScore John Levy is a beacon of enthusiasm and confidence. “We know that 12 months out, we are going to have significant market share in New Jersey and other states we launch in. Whether it happens three or six months from now, we’re going to work very hard to bring it on as fast as we can,” he tells EGR North America.

To Levy’s credit, theScore knows sports fans. The company first came to light as a TV station in Canada, catering to the wider Canadian sports fan whose interests exceeded hockey. It went on to expand its reach across North America and the US, while having to compete with media giants like ESPN and Fox.

Speaking on a recent Bloomberg podcast, Levy said theScore was the first Canadian sports channel to broadcast March Madness. And the channel grew a significant following despite it not paying for streaming rights to show games for some time.

As a result, Levy says theScore is now “the most used, least known brand in the [US] sports business,” second in users to ESPN.

Grow and adapt

As any business trying to survive in a constantly evolving market should, theScore has adapted its model over time to suit changing consumer behaviors. It first shifted from creating TV content to producing its mobile app, and is now putting all its efforts into the newly established betting arm. “It’s a huge commitment and for us, it’s the future of the company,” Levy says.

“The media asset was just turning the corner this [last] year and starting to make money. It probably won’t make money this year because we’re making all these investments, so it is a different projection for the path we’re on.”

But with a recent strategic investment of $40m from private equity firm Fengate Asset Management Fund, Levy is confident the firm will be able to fund its short-term expansion across the states and consider other opportunities.

Of course, significant internal investment has gone into the production of the app, with a high percentage of the firm’s engineering and product team working on it. Like others before it, the app has faced a number of challenges in its development journey.

Firstly, the team shifted from building a standard HTML wrap product to a native iOS app that would comfortably meet all of Apple’s stringent App Store guidelines. Because of the change, Levy says he wasn’t sure the product would make it in time for the beginning of the NFL season.

Elsewhere, licensing restraints in New Jersey overthrew the firm’s original plans to integrate the betting product into the current theScore app. With a separate app comes the concern of customer drop-off and difficulty in converting users.

However, Levy does not believe having a separate app has been a detriment to the company. “Once you register on theScore Bet, users are still going to be on theScore app. There will be these interesting interfaces and crossovers from theScore app to the theScore Bet app. Once you register, you’re floating back and forth as if you’re in one place. It’s one brand like Facebook and Facebook Messenger,” he comments.

With content, the driving force for new and loyal customers of the brand, Levy says theScore already has the stickiness other brands are striving to achieve by producing free-to-play games and launching unique brand partnerships with sports teams and leagues. On average, the flagship app produces 300 to 400 pieces of content every day.

“And now what we need is to have the betting product available inside of it. It’s not going to happen overnight, it’s going to build out over time,” he says.

Although theScore has historically built its brand independently of sports leagues’ content, Levy says the leagues’ involvement in the US betting sphere does interest the firm. And although such partnerships have worth in engaging sports fans across the country, Levy believes it will be the mobile-first operators that will have all the power.

“The leagues and the casinos and other land-based operators are going to have to have some feed into that universe for them to participate in it, and it won’t be the other way around. Everything happens on our phones and the leagues are starting to realize that,” he notes.

Competing in the big leagues

He acknowledges the app is still very much in its infancy; a stripped-back version of what he expects it to grow to be developed in the next two years. One industry exec speaking off the record warns of the dangers of launching direct to market with such a nascent product: “It took us two or three years to perfect our product before entering the market, whereas theScore will be doing that over the next 18 to 24 months.

“They launched without a way for people to deposit immediately and they pulled some moves in desperation to go live for the football season. Of course, they will get better but how quickly that happens we’ll see,” says the exec.

The operator has Las Vegas-based supplier BetWorks providing its back-end trading and risk management functions to the app. With theScore being Bet.Works’ first major client, the partnership shed light on the formation of the supplier as an all American-run business with over 25 years of Vegas trading experience behind it.

In a market saturated with European suppliers with little to no US experience, Levy says Bet.Works’ history with US betting was one of the main reasons he chose the firm. “After hearing a lot of horror stories with third-party platforms, the advantage we have had with them is we could help manage how [our] product would integrate with theirs,” Levy explains. “Others have had to wait months for the integration and then the same product was also given to everybody else.”

But Bet.Works will undoubtably start to bring in additional clients soon and have to divide its time more evenly between them. And with more clients comes additional products with the same pricing and back-end offering as theScore.

In time, Levy is keen to bring some of these functions in-house to give theScore the ability to control its own offering. “It’s a very positive relationship we have with Bet.Works but we understand that, at some point in the future, they and we may want to go in a different direction,” says Levy. But for now, the partnership is thriving.

David versus Goliath

Industry folk have been quick to compare theScore with the also recently launched Fox Bet, a Stars Group-run joint venture with Fox Sports that faces rather a lot of uncertainty after being acquired by FanDuel parent company Flutter as part of a bigger deal to purchase The Stars Group.

Fox Bet follows a similar model to theScore in engaging millions of already acquired customers through betting-focused content (in Fox Bet’s case an F2P game) and familiar branding. But unlike theScore, the company is also battling complex operational movements in just starting up and technology uncertainties following the recent Flutter deal.

However, Fox Bet does have the product expertise of both Sky Bet and FanDuel behind it, as well as Flutter’s immense scale and investment opportunities.

Despite all this, Levy isn’t threatened by the brand. “The philosophy of [their deal] is ‘big is better’, and I would assume there is efficiencies and that’s what they put up as justifications for deals of this magnitude. Our philosophy is not necessarily that big is better but better is better,” Levy gushes.

“What will win is the best product. Just because you have multiple products and lots of money doesn’t guarantee you’ll get it right. Merging those two assets together doesn’t faze me in the least. We chose the more direct route to rely on ourselves and our own relationship with customers.”

Levy is of the opinion that the deal highlights theScore as Fox Bet’s main competition. “I don’t know how much bigger big is, but I would much rather find a more commercially effective way to have sports bettors engage with our brand and keep them there,” he asserts.

Fox Bet has quickly established that its target audience is sports-savvy novice bettors and is appealing to them via its F2P game Super 6 (which has had upwards of 450,000 downloads since its launch in September), and where theScore may be at a slight disadvantage is in catering its product to a number of different audiences. Levy says the firm is targeting theScore app users that have never bet before and those that consume the firm’s content but have been betting elsewhere in the meantime.

So how is the operator maintaining that balance to appeal to both types of consumer? “We didn’t want to turn the [original] theScore app into a betting app,” says Levy. Users have been able to access theScore’s bet mode for some time, enabling them to view odds and view betting forums on the app, but those not interested in betting or those based in states where it is not yet legal can switch off the function completely and still view all the normal content.

Levy says: “That’s the creative stuff we can do with our media app that other betting companies can’t do. Six months from now, I’ll be telling you about features that we haven’t thought about yet.”

The CEO is reluctant to give away any performance numbers and warns it is easy to get swept up by movements in New Jersey each month. “I don’t want to get excited by good numbers or disheartened by bad numbers. If I honestly didn’t believe that our user base was as good, if not better, than those generating huge numbers because they’ve been in it for a year, then we wouldn’t be doing what we’re doing,” he explains.

Expansion is on the horizon with 11 states and 30% of the US market now open to theScore via a deal made with Penn National in August. The operator will look to move into Indiana and Iowa in the next six to 12 months, Levy estimates. But Levy is in no rush to expand into the sought-after states of New York, California and Florida, which are unlikely to see mobile betting movements in the short term. “The beauty, from our perspective, is if it takes years our user base within those states still exists,” he smiles.

The question of Canada

One opportunity for expansion that really piques Levy’s interest is Canada. The Premier of Ontario recently committed to sports betting in its latest budget, which suggests the province is serious about the industry. Levy alludes to the issue of the country’s version of PASPA, a provision in the Criminal Code that states single event wagering is illegal.

Levy says the company’s lobbyists anticipate the clause will be overturned in the next year, making room for theScore, which is number one in sports media in its home country, to take the market by storm and be ready for launch as soon as possible.

“By the time Canada comes on board, we will be so much smarter and further down the road, and the same things are true when New York is switched on,” Levy adds.

TheScore has even loftier ambitions to expand its betting offering beyond North America. Although not as well known in Europe, the brand is recognized among recreational bettors and keen soccer fans in the UK.

“If we get it right here, we don’t see why it can’t be more transportable,” Levy hints. “I only raised the international point because I do believe what we’re building here is scalable on an international basis. Whether it’s in the UK with soccer, although that’s a very competitive market, or India with cricket, passion for sports is global.” But Levy assures it’s only a pipe dream for now and the firm’s immediate focus is North America.

Perhaps the biggest question hanging over theScore is why it sought to enter the hugely competitive and low margin betting business over leveraging its position as a potential super affiliate and sending its users to the myriad other betting operators out there.

Levy admits that route would have been much more bottom-line friendly and likely generated significant return without any risk, but he didn’t consider it to be very “fulfilling.”

“We saw it in the DFS days when DraftKings and FanDuel were spending like drunken sailors, and it was the same thing in the poker days. They are doing it all over again. But we think it’s a huge opportunity for someone who is willing to go all in, so we took the bull by the horns and went all in,” he concludes.