One important aspect of enjoying watching sports with friends is throwing wagers as to who will score the next goal or who will win the next set. These are not just challenges for bragging rights but the fun is in settling the amounts won and lost. When the friends are in the same place this is easily done. Today, it is common to watch sporting action together from remote places through a number of streaming platforms. The problem is that wager settlements have to be done through other apps.
To fill this gap in the social media space, Reddit Inc. co-founder Alexis Ohanian is launching a new app. Wagr will provide the missing facility for gambling with friends and a commercial opportunity for its investors. Smack talk is an integral part of the activity and the Wagr app will include a platform for jousting using insults and dares to keep the atmosphere at a heightened level.
The Wagr Proposal
Wagr was founded in April 2020 with the objective integrating social media to a fast-growing sector of the gambling market. Betting on sports with bookies is a rip-roaring business worldwide and has been officially growing in the United States since the repeal of PASPA. Wagr will provide a different kind of excitement because you will be interacting with friends instead of a cold online website. The betting options will be kept simple to start with to encourage casual punters without in-depth betting knowledge to sign up. The biggest advantage will be that the money transactions after bets are won and lost will be handled automatically through the Wagr app.
Ohanian explained it succinctly in a telephone interview: “It’s about productizing what already goes down in everyone’s group chat, which is wagers between friends about sporting outcomes. Right now the way these get resolved is through a Cash App payment or a Venmo payment on Monday, and surely we can do better.”
The Betting Model
Given that the target market consists of casual gamblers, Mario Malave, founder and CEO of Wagr, said, “Our app really strips down the betting experience to the bare essentials – we’re launching with point-spread bets only. From a user’s perspective, all you have to do is pick a team, decide who you want to bet against, and select how much you want to wager.”
The app will launch with only major sports and only point spread bets. One punter takes one side of a point spread bet with another willing to gamble on the other side. The bet is modelled to offer a 50/50 chance either way and makes it perfect for peer-to-peer transactions. Once things have settled down, Wagr will open up prop bets and money-line wagers. If you have friends or family members to take you on then it is great. If you are alone, the app will match you with someone in the state who is willing to bet against you.
The Revenue Model
Wagr plans to charge a platform fee that will be in line with what traditional casinos levy. It is sure players will willingly pay that amount for the one-stop service handling the odds, payments and smack talk. Ohanian does not only want to make betting simpler, but also safer and will include responsible gambling facilities in the Wagr app. There will be a $500 maximum limit for a single bet, however, users will be allowed to set lower limits if they want to.
“Wagr is focused on building a gambling business around friends gambling together; whether there is a real scale in this model is left to be seen but it’s always good to see new companies are trying to improve the user experience and enjoyment for gamblers.” says Mason Jones from NoDepositRewards.
The Team Behind Wagr
Alexis Kerry Ohanian is a 38-year-old American Internet entrepreneur and investor. He is best known as the co-founder and executive chairman of the social news website Reddit. However, he has several other irons in the works. In 2012, Andy Greenberg of Forbes magazine dubbed him “Mayor of the Internet”. As of 2019, the business magazine estimated Ohanian’s net worth as $70 million. On the social side, Ohanian is married to professional tennis player Serena Williams. Ohanian is contributing $4 million seed funding as the lead investor for the sports-betting start up Wagr through his firm Seven Seven Six.
The other investors come from equally high-profile backgrounds.
- Greycroft: An American venture capital firm with over $2 billion in investments
- Pear Ventures: Another venture capital firm
- Justin Mateen: Co-founder of the popular dating site Tinder
- Brad Martin: Former chairman and chief executive officer of Saks Inc
Gary Loveman, the former CEO of Caesars Entertainment, is an adviser to Wagr.
What the Future Holds for Wagr
DraftKings and FanDuel have created a market of casual gamblers through fantasy sports betting. For starters, Wagr aims to wean out a share of that market. The total market for online sports betting in the U.S. was about $30 billion as estimated by Goldman Sachs analysts earlier this year. So, the sky is the limit for Wagr.
The Covid-19 pandemic has created havoc for businesses, but it seems to have done Wagr a favour. Some American state legislatures have legalized online betting in a hurry to cater to consumers who were stuck at home and could not go to their traditional outlets. The company has already submitted license applications in Tennessee and Virginia – both of which are still pending. California based start-up ZenSports also has a peer-to-peer licence pending in Tennessee.
Reddit has over 50 million users per month and if Ohanian finds a way to rope them into Wagr it will be the work half done. In conclusion the Mayor of the Internet commented, “It’s frankly the perfect time for a business like Wagr to come in and want to build something that really disrupts the way that sports betting has traditionally been done.”