Part two: The most eye-catching startups bidding to disrupt the online sector

Players’ Lounge

Category: Video game wagering

Launch: 2016

HQ: Brooklyn, New York

CEO: Austin Woolridge

There aren’t many startups that can reel off such an impressive list of investors as Players’ Lounge. Backed by the likes of rap artist Drake, former Yahoo CEO Marissa Mayer and video game giant Take-Two’s CEO Strauss Zelnick, the startup secured $3.5m in funding in 2019, followed by a Series A round which raised $10.5m in July 2022. The fledgling business went through the Y Combinator accelerator programme in 2018, famous for helping launch the likes of Airbnb, Dropbox and Twitch. At the end of the three-month programme, CEO Austin Woolridge pitched “thousands” of investors and closed $3.5m in funding. To date, around $15m has been raised The idea for Players’ Lounge stems from Woolridge’s college days at Wesleyan University where he and his peers used to play FIFA for money in their dorm rooms. In 2014, while watching the World Cup, Woolridge started playing FIFA again but didn’t find the experience as enthralling when competing against random people online. This led to the idea to host tournaments at bars in New York to recreate the social aspect of video gaming. From there, the concept for Players’ Lounge Sports came to fruition. The premise of the product is that gamers can place bets on the matches they are playing against each other. Users can compete in solo head-to-head matches, tournaments or with friends to win real money. Woolridge, who co-founded the business with Zach Dixon and Dan Delaney, recalls how tricky it was to secure funding in 2015-2016. “Outside of a few friends and family investors who believed in our personal work ethic and us being successful, it was hard to raise any money. It’s crazy to think now but back then no one wanted to invest in the esports betting business, it wasn’t sexy or promising enough.” He continues: “Back then, the appetite for a video game wagering company wasn’t as open as it is now, not only from an investor standpoint as they have their own risk profiles and assessments, but the industry hadn’t really shaken out enough for them to feel comfortable investing. Also, from a regulatory perspective as the market was greyer back then.” However, Woolridge did pay homage to FanDuel and DraftKings for unlocking opportunities. “In the US, you could wager on games of skill without needing a gambling licence, and FanDuel and DraftKings really ushered in that era and paid the legal dues which paved the way for a company like us to utilise the same laws that FanDuel and DraftKings use. Video games may be more applicable to the game of skill law than daily fantasy.” In this regard, Players’ Lounge Sports circumvents the need for a gambling licence as you can only wager on yourself. The product, which is live in 42 out of 50 states, offers head-to-head matches where users can play against someone of a similar skill level using its own robust matchmaking system. “The maintenance and sustainability of the marketplace is highly dependent on providing that skill-based matchmaking,” explains Woolridge. “So, you might be a ‘regular’ – a banker, work a security job or a soccer coach – and you come home from your nine-to-five and want to play FIFA for $10. If you get matched up against three FIFA pros in a row, you’re probably going to think this site isn’t for me. So, we need to have that skill-based matchmaking.” Having launched a new app, Players’ Lounge Connect, just this month, users can receive lines (also known as personalised gaming challenges for cash prizes) based on their historical statistics in the game. Woolridge explains: “For example, if you play Call of Duty, and you average five kills every time you play, you can download the Connect app and think because I average these stats, here are my lines. If I get six kills in the next game and I finish in the top five, I’ll win 2x. So, I bet $5, I hit those challenges and I win $10.” Going forward, Players’ Lounge’s co-founder hasn’t ruled out expanding into traditional betting in the future. “It’s one of the only products, if not the only product, in the world where you and your friends can collaboratively bet on something instantaneously and win money by achieving a goal. I don’t think there’s any other product in the world that can do that, so I believe that’s a billion-dollar business in itself,” he states proudly. So, should sportsbooks watch their backs? “We’re able to get users who are interested in wagering on themselves and not only on themselves, so there’s a high likelihood that they like to wager on other things like esports and real sports.” Woolridge admits that in terms of marketing it has stayed under the radar but believes the Connect product will be the “real catalyst of growth; the launchpad to the next stratosphere”. By leveraging its celebrity partnerships and investment assets, Players’ Lounge could be on course to strike gold.

WPT Global

Category: Online poker 

Launch: April 2022 

HQ: Remote 

General manager: Alex Scott

The World Poker Tour (WPT) is one of the most well-known brands in poker, with its televised tournaments broadcast from lavish locations, primarily around the US and Canada. In fact, the WPT is credited with having a big hand in sparking the poker boom in the early 2000s, when the old cowboy card game was given a 21st century makeover and piped into Americans’ living rooms via the Travel Channel on cable TV. Two decades on, WPT Global is a recently launched online poker room licensing the iconic WPT brand and taking on the incumbents. Spearheading the operation is Isle of Man-based general manager Alex Scott, who has re-joined the sector from the fintech space and was, prior to that, MD of poker at Microgaming. “I’ve seen a lot of poker startup ideas over the years and a lot of them have been terrible with no chance of success at all, but this one was different,” Scott remarks. “This is perhaps the first poker startup I have seen that has a really good chance of being successful, so to get in early and be one of the first employees was a great opportunity.” The reasons for his bullishness are primarily due to the fact this venture is “very well-funded”, uses the WPT brand and has access to a strong player liquidity pool straight out of the gate through an “Asian partner”, he says. “Most poker startups are starting from scratch, and if they aren’t very well-funded then they have no chance to build that liquidity.” WPT Global, which serves up poker formats Hold’em, Short-Deck Hold’em and Omaha, also owns its own fully customisable software and back-end tech like PAM. Licensed in Curaçao, the product is available in more than 50 countries, which doesn’t include markets like the UK and the US, however the plan is to apply for local licences in regulated markets in the future once the operator is more established. Being able to use the WPT brand itself – including having access to its back catalogue of TV content – gives this startup a huge leg-up when it comes to marketing, though. “The WPT reaches something like 600 or 700 million homes across the world. It’s an incredible reach that gives us broad exposure to a lot of people,” Scott explains. “We don’t need to promote WPT; what we need is to upsell the people who already know WPT exists to the online business.” The site has also teamed up with influencers, affiliates and media partners to raise awareness among poker fans, including well-known vloggers Brad Owen and Andrew Neeme. Another partner is Hustler Casino in the Los Angeles area which features the WPT Global logo emblazed across the table of its lively cash-game streams. Indeed, a recent livestreamed game from the property involving a handful of pros and the likes of YouTuber ‘MrBeast’, Twitch streamer ‘Ninja’ and chess star Alexandra Botez went viral, such was the interest in the event. On the online felt, WPT Global is running a massive loss-leader: a tournament with just a $1 buy-in and a $1m guaranteed prize pool. The $1 for $1 Million Tournament has been rescheduled as improvements are made to the product to ensure as many people as possible can participate, yet an eye-watering overlay of more than $900,000 – planned from the outset – is still on the cards. Phil Ivey, who is widely regarded as one of the best poker players of all time, was enlisted to star in an amusing advert to promote the tournament. “If you haven’t heard of WPT Global after we have finished this promotion, we have really done something wrong,” Scott asserts. “This is one of the most valuable poker promotions there has ever been. Nobody has done anything like this before and basically given away over $900,000 just to build the brand.” Keen to capitalise on the crossover between the poker and crypto communities, WPT allows for deposits and withdrawals in cryptocurrencies and is embracing non-fungible tokens (NFTs), giving players access to special features and promotions. NFTs could even be used to authenticate someone’s real identity at the table. This is a pertinent topic given the online cheating scandals across the years and the proliferation of bots, real-time assistance (RTA) tools and ‘ghosting’ (live coaching or taking over playing a tournament) infecting the game. Scott insists some of the tools WPT Global has at its disposal to detect collusion, bots and real-time assistance are “light years ahead” of what he has seen before in the industry. And even though he concedes attempts to “abuse the system” are “far most sophisticated” nowadays, Scott says detection systems have moved on. “What we might see in the future is some online operators not able to cope because they are not investing in these tools, but we know most of the big guys are investing in this area. We are investing heavily in it. The places where you can get away with using this kind of cheating software are diminishing.”