Business By The Books: Tipico Ready To Speed Up Slow Rollout

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Tipico intentionally has taken a different approach to US sports betting than most and is ready to see if those years were well-spent.

The brand is a European heavyweight and holds pole position in Germany, but that was not enough to move forward in the States, North American CEO Adrian Vella said.

Instead of diving right in at full force, Tipico chose to take the last few years to build a proprietary US platform and scale its headcount to 150:

“We believe the product will win the game at the end,” Vella told LSR.

Tipico now will put that theory to the test, starting in earnest with Ohio.

Tipico an eager first mover in Ohio

This is the first time Tipico has been at the starting line in any of its four markets. The company launched late in Colorado and New Jersey, and just launched in Iowa last week.

“We’re seeing very good signs [in Ohio], customers are coming in the door, we’re seeing good signs that they love our position and we’re seeing good signs that they like our product so far,” Vella said. “On those signs, we try to keep getting better and keep investing. In a couple of months’ time we’ll get signs of if they choose us as their preferred book or not and that’s when we can really start talking about market share. We think we can take a piece of the market.”

While Tipico admittedly is figuring out what works and what does not, this will be the first time the brand scales its marketing in a meaningful way. Eilers & Krejcik, which ranked Tipico as the 10th-best sportsbook by its testers, reported the company has “many tens of millions” for a marketing budget.

Vella declined to discuss specific numbers but noted the company’s big ambitions, especially for the next three to six months: “We’re taking Ohio very seriously and we love our position now. It’s very exciting as well because then the cadence of the company and the strategy is much more focused, and it’s working out.”

Leaning into locals

Vella understands the peril in burning dollars in bonuses to have customers churn quickly and move to one of the bigger books. That is why the brand is taking an approach that sells Tipico as the sportsbook for locals, he said, signing partnerships with AEG and local live music venues and a brewery in Cincinnati.

Its five-year, $90 million partnership with Gannett works for the local approach, too. While the headline for that deal might be the USA Today tie-in, it is really the sports sites that cater to local fans that can help Tipico grow, Vella said.

Not ready to expand quickly without proving story

Jumping into as many states as possible would be a mistake at this point, Vella said, especially considering how some competitors have managed:

“Market access was a niche, now it’s a commodity. You can get market access if you want. So would it make sense for our company to go in and sign 10 other states and put that burden on the [company financials] maybe when you’re still proving the story in the states you’re already in? And we’ve seen that learning from maybe other competitors that are taking themselves out.

“We’re taking a cautious approach but aggressive approach, investing heavily in the product, VIP and the customer, we really want to have something where the customer, they have no reason to churn.”

Once Tipico knows it has a formula that works, it can “go all in and scale in every state we want,” Vella said.

Delaware launches iGaming RFP

Delaware hopes to be live with a new iGaming offering by November, but there may not be many companies that fit its bill.

The Delaware Lottery wants one operator that can offer casino games, poker and potentially online sports betting, according to the RFP: “The Lottery is not considering joint proposals whereby signatures from more than one Vendor is required to contract with the Lottery.”

The current operator is 888. Other operators could be interested in the state despite the state’s relatively small population of 1 million residents and monthly revenues between $800,000 and $1.3 million last year.

Delaware has membership in the Multi-State Internet Gaming Agreement. That allows Delaware to share its poker players with Michigan, Nevada and New Jersey.

Bids are due Feb. 17 with negotiations between the lottery and a vendor starting March 24.

Is wait over for Betfred in Vegas?

Virgin announced Betfred would be running its sportsbook in Las Vegas more than two years ago and was expected to open in the second quarter of 2021.

It obviously took much longer than that, but the operator is finally on a special agenda for consideration by Nevada regulators this week.

Nevada will be the ninth state for Betfred.

ZenSports CEO to lead KeyStar

Mark Thomas is now the CEO of KeyStar, the company that acquired his ZenSports.

ZenSports is a peer-to-peer betting company that has not made a huge splash in the United States but has been active in Europe. The company applied for a Tennessee sports betting license but did not launch.

“The Board has decided to take an approach of focusing the company solely on B2C sports betting for the foreseeable future, and Mark Thomas is the perfect fit to lead these initiatives given his prior experience with ZenSports,” Chairman Bruce Cassidy said.

“Mark has done a great job previously with ZenSports, growing the business in the European market and obtaining a Nevada gaming license in 2021,” Cassidy added. “We have full faith and confidence that he will be able to do the same under KeyStar moving forward.”