Sports data developer RotoQL is optimistic about legalized sports betting in the US. Having created successful tools for daily and season-long fantasy sports, the company just secured funding to step into the new vertical.
Today, the company announced a $3 million seed round, bringing its total raise to $4.7 million. The new investors represent a handful of large venture firms, including early FanDuel backer Karlani Capital. The company also counts David Stern, the former NBA commissioner, among its stakeholders.
RotoQL will use the funding to bolster existing products, as well to launch a new BetQL platform for sports bettors.
BetQL for sports betting analytics
BetQL will be a crowdsourced tool for dissecting betting lines and information. According to a press release, the product will provide “data designed to aid players in ‘bet discovery’ — guiding them to the value on the betting board.”
CEO Justin Park offered his thoughts on the potential market:
We see it as an over $6 billion annual opportunity in the U.S. regulated sports betting market by 2023 with only a subset of states participating.
The industry will need to reduce the friction for bettors who are currently wagering through offshore services, and especially address new bettors who are not wagering at all because they view it as too complicated.
The company expects to foster a “middle class” of sports bettors — part-timers who hover around break-even and expect some longevity from their bankroll. “Data and analytics are an extremely important way to increase the average aptitude of sports bettors, ultimately helping the new or novice player to be more savvy so they can join the middle class.”
Much of the development must be complete already, as the company expects to launch BetQL within this quarter. As it matures, it plans to diversify away from subscription-only services and explore the affiliate model.
RotoQL’s fantasy sports background
RotoQL is an established, direct-to-consumer sports analytics provider. It launched in 2015 as the creation of the world’s top-ranked DFS player, Saahil “Maxdulary” Sud.
The company’s first tool, named after itself, was designed for the daily fantasy sports space. It is essentially an aggregator of DFS data which compiles stats, salaries, and news updates in one place. The mobile-centric platform also includes tools to make lineup analysis and construction more straightforward.
According to RotoQL, that subscription-based DFS product has more than 100,000 users. Monthly fees run between $0 and $100, depending on the level of functionality desired.
The company became profitable within its first 12 months of operation, and it currently employs 15 people in its New York office. It’s since developed a utility for season-long players called SquadQL, too.
With BetQL, it will complete the trifecta for products tailored toward sports speculation.
First wave of secondary sports betting businesses
Despite the federal sports betting prohibition in place, a sidecar industry is already beginning to materialize in the US.
The US Supreme Court is reviewing that prohibition, known as PASPA, which restricts single-game wagering to Nevada sports betting. A favorable ruling could open the door to further legalization at the state level, and preparations are visibly underway.
Companies in parallel spaces, like RotoQL, are well-positioned to enter the new market. A fair percentage of its customers are likely sports bettors, so the path to early acquisition is partially paved. A BetQL investor called the product “a textbook example of the right product at the right time in the right place.”
As state lawmakers consider sports betting bills, they often speculate about the jobs that might be created from the industry. Just this week in Louisiana, a committee quashed an iGaming proposal partially because it was unclear how many related jobs would remain in the state.
Although sports betting will create many direct jobs, it has the potential to spawn a substantial secondary industry, too.
It’s already evident within DFS, where RotoQL is one of countless tools and utilities designed to help users navigate the space. It’s a relatively small one, with just 15 employees, but there are dozens of others like it. And the sports betting movement is already taking hold, with emerging platforms like the Action Network and BlitzPredict beginning to appear.
Expect the list of related products and services to expand quickly if a regulated sports betting industry gets off the ground.