Interview with angel investor and co-founder of BestOdds.com

William Armitage is an angel investor and also the co-founder of BestOdds. In this interview, he shares his outlook on what iGaming affiliates need to do to differentiate including being less reliant on SEO.

Is BestsOdds.com your first foray in the world of gambling?

It depends how you consider a foray?! I remember having my first bet at a point-to-point (a type of amateur horse race meeting with jumps) in around 1982. Like many Brits, a flutter on the horses was part and parcel of growing up, and I was no different. It was in my DNA, with my father having been his school bookie in the 1950s. After leaving university, I started my working career at IG Group plc in 2000. This company would be at the forefront of financial spread betting and CFD trading as the product evolved and became mass market by the time I left in 2011. In the mid-1990s, I had done summer internships within IG’s sports spread betting business. So, I guess it’s been nearly three decades since my first foray into this space!

Education seems to be one of the core USPs of the site, what does the site do differently here compared with other affiliate sites?

I do believe that the majority of affiliate sites out there are rather dry and transactionally focussed. If that is your chosen business model, then good luck to you. Having taken on an incredibly powerful domain name, there would be little point in not trying to build a brand and destination to justify the expense in picking up www.bestodds.com. And one of the best ways to do that would be to focus on education. To date the US audience is not yet odds sensitive. Yes, you have the 10% of the US audience who might be deemed as savvy bettors. They know the difference between +225 and +245 and where one should therefore wager. However, the vast majority are simply happy to have a flutter legally. Over the coming years, this audience will become more sophisticated and do more odds shopping. I have used the same odds comparison site for close to two decades now. I want BestOdds to be that brand in the USA; the one that can foster that type of loyalty by providing great UX and education around sports betting.

SEO in iGaming seems to be changing by the quarter with many big affiliate companies stating that SEO is becoming saturated and companies will need to lean into other means of driving FTDs. Would you agree and what do you see as the current landscape of iGaming affiliation in terms of SEO and how to drive new players?

I would have to agree in part, especially if you were a new entrant to the space. Starting from scratch with a purely-SEO modus operandi would be a tough and expensive challenge. You can see why so much of the noise emanating from the super-affiliates is around diversification of revenue streams and the drive to be deemed as media companies. However, the idea that companies will pay less heed and attention to SEO is fundamentally false. The potential upside from nailing SEO is too considerable to forego. So rather than a shift away from SEO, it’s a case of continued investment in that specific sphere. But with the playing field being ever more competitive, that strive for diversification is what the mega-affiliates’ shareholders and managements demand. Affiliates of all sizes have to be more agile and innovative at attracting clients as the industry matures. If you remain static in how you operate, especially regarding pure SEO affiliates, you’ll have to paddle increasingly hard just to stand still.

As an angel investor, have you invested much into iGaming startups?

Yes indeed. I’ve invested in a wide range of industries over the years. I have dipped my toe into Fintech, Edtech, Healthtech, Insuretech, Fashiontech, Agtech etc. I’ve even invested in Colombian car repairs as a sector! However, it has only been in the last three years that I have ventured more into start-ups in this sector. I am friends with one of the most prolific angel investors in Fintech in London. He also happens to be the founder of the top compliance business for Fintechs in Europe. He has been very clever in writing cheques across nearly every single Fintech start-up in the knowledge that some will succeed from an investment perspective, but he also guarantees that practically every company will ultimately be a client of his own business! Unfortunately, what BestOdds is building cannot be used by every player in this space; otherwise, I might have tried the same strategy. However, I have made a handful of investments in this space, based either upon the belief in the product or in the founder’s ability to execute well as a talismanic leader. These are two of my most important criteria in which I need to believe before joining a company’s Cap Table. To date, none of my iGaming start-ups have gone bust yet. So, I guess it’s onwards and upwards!

What is your take on the current landscape of the entire iGaming industry from an investor’s lens and what trends are you spotting?

My first comment to this has to be around valuations and the view that a modicum of common sense has returned to this market. The froth has been blown away from the iGaming industry. Imagine saying 12 months ago that PointsBet would be sold for $150m given its own tech and footprint across many of the legal states in the US. You would have been seen as rather delusional. The question is whether this is the nadir of the market and that valuations have swung too far. What is fair value for that specific business? Is Fanatics’ $150m offer reasonable? Is DraftKings’ counter-offer just shy of $200m more in line with reality? All we ultimately know is that something is worth what someone else is prepared to pay for it! I admire DK’s executive team for how they are playing this particular game of poker. I imagine that Teams Caesars and BetMGM are chuckling away at how one of their big, established rivals, in DK, is seemingly kiboshing Fanatics’ prudent acquisition. It will be intriguing to see how it pans out from here. Meanwhile FanDuel probably doesn’t care given their large chunk of the US market!

In terms of tempered valuations, there are various ramifications. One is from a personal investment perspective, it is likely that you are in a more powerful position to negotiate terms, rather than a lofty valuation being simply forced upon you. Another is that it is noticeable how both VCs and angel investors are much more inclined to find reasons not to invest across any sector. There is a lot of dry powder out there and less willingness to throw cash around, writing cheques willy-nilly. The upper-hand now sits with the investor, rather than the founder. The great ideas are still out there, and the US space remains of huge potential in the long term. There are some major future winners waiting in the wings and it’s a question of being brave enough to invest when others are more reluctant to do so.

The other clear impact of lower valuations is that those still-unprofitable companies, which last raised between 12 and 36 months ago, are now really up against it. Unfortunately, dramatic down-rounds or simply running out of cash are now more prevalent. These in turn present opportunities for profitable affiliates or value investors to snap up talented teams or tech. iGaming M+A advisors will remain a busy collective in the coming months and years. Okay, the mega-multiple deals might not be around, but deals are still there to be done. I don’t see this trend changing anytime soon…