Cipher and Australia-listed IXUP want to shake up the relationships between media and sports betting ops by giving both more information.
Their joint venture, Convertr, would allow both sides of a marketing partnership to securely match customer data that could open more sports betting revenue opportunities.
For example, if a sportsbook has a customer who only bets on basketball but its media partner knows the customer reads golf stories regularly, the sportsbook could learn that through the Convertr platform and start to build personalized offers.
The product is possible through IXUP’s encryption that allows both sides to upload data to the Convertr system, Cipher CEO Adam Fiske said.
Australian sports betting test
The two partners put Convertr through a pilot program during the 2022 Australian Football League Finals and achieved “extremely encouraging results,” a release from IXUP said. That led to signing the agreement with the hopes of launching in the first quarter of this year.
Ultimately, Fiske is selling Convertr as a product that can empower affiliate operators and media companies to have a greater role in their partnerships with sportsbooks.
It is an opportune time, as many sportsbooks are turning to retention and profitability.
Revenue model likely a mix
While Convertr is a software as a service-based product that typically includes a subscription fee, Fiske said revenue sharing could be included since that is standard within the sports betting industry.
Cipher is doing the legwork on marketing and sales, but IXUP is carrying the heavy load with its secure data collaboration technology.
Cipher will pay an IP Exclusivity Fee of around $170,000, which will be funded through revenue of the JV. IXUP will take 75% of revenue until that fee is paid and the deal reverts to a 50-50 share.
IXUP will also create a separate entity for the technology, which Cipher can buy 50% of for $200,000 as long as Convertr hits $1.4 million in revenue its first two years.
Super Group plan for US sports betting
Super Group (SGHC) will be disciplined in its US investments and will not try to grow the Betway brand “at all cost.”
That is according to CEO Neal Menashe on the company’s fourth-quarter call:
“To be clear, we see the U.S. as an attractive opportunity. And we’re going to invest while constantly re-evaluating the spending returns being generated on a state-by-state basis. From an investment perspective, the U.S. entry is simply creating optionality for us. Our global ex-U.S. business continues to grow and generate cash, and the U.S. presents upside potential on top of that.
“Keep in mind that it’s not a growth at all cost scenario. We’ve been disciplined in our spending since inception, and we tend to manage this expense in the same way.”
SGHC, which closed on the Betway acquisition in January, expects to lose about $75 million on US investments in 2023 and expects to break even within five years. Revenue should remain minimal in 2023, given Super Group will only invest in states once its sportsbook is on the Betway global technology, CFO Alinda Van Wyk said.
Just three of its eight live states are on that technology as of the end of 2022:
PTEC invests in Hard Rock Digital
Playtech (PTEC) is now directly invested in the US sports betting business after an $85 million investment in Hard Rock Digital.
That bought London-listed PTEC a “low single-digit” stake in the company.
Playtech will also supply Hard Rock with iGaming content in the US and Canada predominantly under a revenue share agreement.
Hard Rock will use most of that $85 million for continued global expansion.
There will be minimal impact from this agreement in fiscal 2023 with more meaningful revenue coming in fiscal 2024 and beyond.
Ohio sports betting kiosk handle grows
Ohio’s kiosk sports betting handle saw a 14.4% increase in its second full month after adding 94 more locations and 532 additional kiosks.
Handle still did not crack $1 million, though, with $973,208 bet through the lottery’s limited sports betting offering. Hold fell to 6.39% from 13.84% in January, leaving $62,146 in gross revenue.
The additional kiosks mostly came from Intralot, which was delayed in rolling out the machines in January.
The Lottery’s take is fairly insignificant compared to mobile Ohio sportsbooks. In January, the state debuted with $1.11 billion in handle and $208.9 million in revenue.
Both of those numbers have a Barry Bonds-sized asterisk, though, considering there were $320 million in promos handed out in the first month.
INSE talking virtuals with sportsbooks
Virtual sports are a complementary product to sports betting in European countries but have not taken off in the US. According to Inspired (INSE) CEO Brooks Pierce, that could change soon.
INSE has had “a number of conversations” with both lotteries and sportsbooks.
“I think people are coming around to the idea that this is a product that’s viable,” Pierce said on the company’s fourth-quarter earnings call.
Those conversations are turning into a pipeline of customers that will launch this year and in 2024, he said. The company’s first two US customers, the Washington DC and Pennsylvania lotteries, are “performing well,” he added.
