Q&A: Smarkets on testing its new sportsbook and plans for the US

Having been on the front foot for pre-empting the widespread legalization of sports betting in the US, Smarkets is almost ready to unveil its long-awaited SBK fixed-odds sportsbook to both the UK and US markets in all its glory. To-date, the firm has yet to establish any partnerships stateside, but not for want of trying. VP of engineering Mark Miscavage tells EGR NA but the ideal situation has not yet come along for the operator, which owns and develops all its technology in-house.

“We are definitely the most interested in having an open market like the UK so Tennessee is the most interesting to us,” Miscavage said. “We’re still working on potential deals in NJ, West Virginia and keeping an eye on some of the other states like Massachusetts, Virginia and Iowa. In a perfect world, we’d be everywhere but we need to jump through hoops to be able to operate in these places,” says Miscavage.

Smarkets founder and CEO Jason Trost established the operator’s sportsbook development hub in Los Angeles in 2016 in preparation for the US sports betting market opening up. Then in February of last year, Trost told Bloomberg an SBK sportsbook would be launched in the UK ahead of the US. The operator initially plunged $5m of funding into the project and, according to recent investment teaser documents, Smarkets is seeking new funding to fuel its upcoming launch in North America. Miscavage insists he has nothing to share on that front but is optimistic the product itself will launch in time for the next NFL season in the fall.

Miscavage takes us through the product, how it has performed in the UK and his expectations for meeting the needs of the US bettor. He also takes us through the US office’s dynamic and its Silicon Valley developers’ approach to producing a betting product.

EGR NA: How close are you to launching SBK in the US?

Mark Miscavage (MM): The timeline is still up in the air, and it still depends on how licensing goes and where we can acquire a skin. We’re working on a number of those in a number of different states, Tennessee being the newest and most interesting one. It’s unclear to me who is going to fall next but ideally we would like to have a deal in place and be operational for the NFL season. That’s the obvious inflection point to be ready with a new product and launch with the NFL.

We are definitely the most interested in having an open market like the UK so Tennessee is the most interesting to us. We’re still working on potential deals in NJ, West Virginia and keeping an eye on some of the other states like Massachusetts, Virginia and Iowa. In a perfect world, we’d be everywhere but we need to jump through hoops to be able to operate in these places.

We would like to operate as ourselves directly to the customer. I don’t want to take any deals off the table whether it’s B2B perhaps but we definitely want to operate as ourselves in the US. Our focus is on the Premier League in the UK right now and we will shift that [on to marketing in the US] when it is appropriate and when we have a deal locked in or are confident we have a timeline for the US.

Mark Miscavage

EGR NA: How will the SBK fixed-odds sportsbook product differ in the US from the UK?

MM: SBK is still in a limited release in the UK. We’re slowly letting people in with a viral Q model and will do a bigger launch around the Premier League season. That would be the product we would launch in the US. It will be a very similar product in terms of the code. It will be the same code base and we will have certain adaptations for the US, whether it’s certain pieces of language or some sports that may be featured over others. Where it’s soccer in the UK, in the US it would be NFL, NBA. Otherwise it’s the same product, a sportsbook with the best prices, or as best as we can make them. The lowest margin of anyone out there if we’ve done our job correctly. And a very innovative product, it doesn’t look like other sportsbooks necessarily look.

We’ve come at it from a new school of software design and not from a high-street bookmaker perspective and that should come through in the design. There’s a social network integrated into it so you can comment on other people’s bets and leave an emoji reaction. We’re already seeing in our beta stage that people are interacting with each other, people are betting in different ways and we’re going to continue to add to that and to innovate in those areas because that’s what we’re best at doing.

We have really agile tech teams that are in LA for SBK and London for Smarkets and we’re able to make changes to these apps on the fly much faster than any of the other operators out there. We can see what the latest trends are and not just in betting, but in the world in general. What is the zeitgeist and then add that to the app in a limited amount of time. We have great engineers that can move quickly and update the product quickly. That’s where we see our advantage, alongside the best prices.

As we finish up the core feature of a sportsbook, having all those main features, once that is complete and bulletproof and ready to show off, what do we do from there? We’re not just a white label product we’re installing for someone.

EGR NA: What is the full launch in the UK dependant on?

MM: It’s dependant on us having those core features in place that are bug-tested and bulletproof for the UK as they are that much savvier at sports betting. They are inundated with marketing from other countries.

EGR NA: Can you give us a deeper insight into the social element of the SBK app? Have you seen it done well elsewhere?

MM: I don’t think we have another betting or social betting app that is of particular note or inspiration. It’s really been pulling things from the big apps in that space and adapting what is right and what has been done wrong and adapting that into a sportsbook. Once we launch we will continue to talk to customers and find out what users want changed. I don’t know that any other bookie has necessarily done what we’re doing. Maybe the closest comparison in the UK is Betbull but I put them in a different class to us as they have leaned hard towards gamification whereas we have the modern social media feel without being a video game.

The SBK app

EGR NA: How has the feedback from the UK’s beta phase been?

MM: The feedback has been positive. People like the design decisions we’ve made. It’s very clean and easy to use. There is definitely some crossover with the exchange users. The exchange users don’t have the ability to place multiples right now on the exchange but they do on SBK and the account crosses over between the two products. A fair amount of exchange users will come onto SBK to place those bets and talk with friends. The other users are those wanting to try a new product. They’re helping us find the features that may be lacking like a specific bet type or feature.

EGR NA: How do UK bettors tend to respond when you ask them why they bet elsewhere?

MM: It can be a variety of things, and generally not the things I think we are better at like the aesthetics or design. It’s maybe markets that we’re missing or that we haven’t priced properly.

EGR NA: How do you think having an established tech hub in the US has been an advantage to Smarkets in plotting its US launch?

MM: Having the office in LA gives us a foothold in the US once we can launch the product. We have a lot of engineers that are from New Jersey so they will be able to tell their friends at home about it. As much as I would have liked to have already launched in New Jersey, it is better that we’ve waited until this point and are able to check out the other apps available and see what they are doing right or wrong, and what markets and bet types we need. To launch something that is not only on par with other apps but is far better because we are building it all natively. Once we get our foot in the door and a deal is done, I’m excited to capture some of this market and let the product speak for itself.

We’ve gotten to the point now where we feel we are ready to launch and open the app up to the general public. We just hired someone in the US to help out with marketing.

EGR NA: What have been the benefits of hiring seasoned Silicon Valley developers to work on the product?

MM: We have engineers from Stamford and Princeton and Brown and Carnegie Mellon and the reason they’ve chosen to work with us over Google or Facebook is because they’ve had so much influence on the product. It’s a fairly small team of only 18 people, most of whom are engineers. They get to have a huge impact on the product and built it from the ground up in the last year. I would argue we still are a fintech company and so apps in that field have been influential. In the US, Robin Hood is a pretty good example. We’ve also looked at some of the more popular apps like Instagram or Twitter for example for that sort of experience. For the vertical scroll and the entertainment value that keeps users in the app for a long time. Also the potential for users to interact with their friends and what new interesting data points there are to look at.

EGR NA: Do you think UK bettors are a good marker for US users?

MM: I definitely think that user experience in the UK will translate to the US from an app perspective. We don’t think it’s that different. We see users we target that care about SBK have similar profiles in the UK and the US.