Sports betting has grown tenfold in popularity over the past few years. We’ve seen FanDuel and Draftkings expand their horizons, BetMGM become a leader in the NYC metro markets, and state-based apps like SportsBookRI make history within their confines.
Now that the market has proven it can handle disruption, new players are emerging. And today, Wagr put itself on the map.
Wagr, a peer-to-peer sports betting app that allows players to bet against each other, announced its partnership with MLS side Nashville SC today. Wagr is only available in Tennessee at the moment, but is scheduled to launch in other US markets. So, while it was limited in its professional team partnerships, it’ll be a massive step forward for the early-stage startup backed by Robert Kraft, Reddit’s Alexis Ohanian, and Tinder co-founder Justin Mateen.
Wagr co-founders Mario Malave and Eliana Eskinazi at Geodis Park. PIC: The Tennessean
Setting up shop in The Music City
It was only a matter of time before Nashville became the pioneer Nashville SC was founded just over four years ago as a USL team. Although it hasn’t exactly been a hub for professional soccer, there had been some success at lower divisions over the years in The Music City…notably, the Nashville Metros (PDL) and Nashville FC (NPSL). Finally, in 2016, the community rallied like they never had before. They loved the concept of fan-owned professional clubs - similar to FC United of Manchester in the Northern Premier League - and they sought to bring one of their own to Nashville, Tennessee.
The fans’ quest led to a host of wealthy business investors buying into their mission, and as such, the MLS granted Nashville its bid to work towards an MLS franchise. After four two seasons of competing in the USL, Nashville SC hit the pitch for its first MLS season, on which they’d never look back.
Now, in 2022, Nashville SC is in nothing short of hyper-growth mode. They’re scheduled to open their $300 million stadium, Geodis Park, on May 1st of this year. Immediately the stadium made its mark; they’re scheduled to profit as much as $4 million yearly from Geodis as its naming rights partner, and they’ve already sold 20,000 season tickets & sold out their season opener.
As part of the deal, Wagr now has the rights to set up marketing activations at Nashville SC home games. They’ll have 2 tents at every single home match for the Nashville side this year, in different locations throughout Geodis Park. The goal is to engage with fans, rally the community around an innovative way of sports betting, and - of course - app downloads.
Mario Malave, the founder, sees American soccer as a great foundation upon which to build the Wagr community. “When you talk to all the fan clubs (in soccer), there are friendships there,” he told The Tennessean this week. “They go to games together, they tailgate together, they travel together. Our product is built for groups like that.”
Wagr’s business model would appear to fit in with the “grow now, monetize later” mentality. As many entrepreneurship thought leaders have commented on in recent years, the key to consumer products - especially apps - lies in a few general trends, all of which can be directly applied to an innovative model like Wagr.
1. Pick a massive market. Sports betting had a global market of $67 billion in 2020, and growing at a 10% clip year-over-year. It’s expected to eclipse $100 billion in 2025, but with new players emerging and betting becoming more commoditized among even the most passive sports fans, the time it’ll take to get there could be shrinking. It’s a market that requires relatively less overhead/capital than most consumer apps, and growing at a high rate…check.
2. Create an excellent, easy-to-use product. How many times have you downloaded something and said “damn, this app sucks?!” That’s an all-too-common reaction for most consumer apps, even the most well-marketed products that are backed with more capital than imaginable. With a quick glance of its website, you can tell Wagr emphasized the user in all facets of its product. Hopefully the trend continues with more user feedback and requests.
3. Acquire as many users as possible. This is where scaling gets tricky. Wagr is currently monetizing at a rate of 5% per bet placed on its apps. Obviously, generating revenue is the only way that any business will survive. But all too often, consumer apps fail because they are attempting to monetize too quickly. Think about Twitter, Facebook, and Instagram: they were once pre-revenue apps that simply focused on encouraging growth. In the early days, Facebook was simply focused on building community in all ways - Groups, Messenger, and Events all contributed to that sense of community. Then, they figured out their advertising algorithm and dove into crazy stuff like the Metaverse. Consumer apps like Wagr take a page out of their playbooks.
A killer, easy-to-use, and fun product should be the top priority for any consumer app. Here's a look at Wagr's early functionality.
The principles of the “Scale quick and figure out the rest later” model can be applied directly to sports betting in North America and beyond. Apps like Wagr can only benefit this industry, and I’m excited to see what this partnership brings.