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All bets are off

South African start-up BetTech Gaming gives small to medium-sized sportsbook operators the functionality they need to compete with the world's largest bookmakers.

Tamaryn Watkins
By Tamaryn Watkins
Johannesburg, 25 Oct 2013
BetTech Gaming CEO Ian Barnes believes igaming is the key to earning the big bucks in the sports betting industry. Photography: Sean Wilson.
BetTech Gaming CEO Ian Barnes believes igaming is the key to earning the big bucks in the sports betting industry. Photography: Sean Wilson.

Last year, South Africans spent an estimated R17 billion in the sports betting industry. PricewaterhouseCoopers predicts that this turnover will grow to about R24.2 billion by 2016, up from about R10 billion in 2007. While gambling online became illegal a few years ago by legislative amendments, online sports betting is still fair game. BetTech Gaming was established to play in this igaming market.

In 2009, co-founders Jesse Hemson-Struthers and Mark Bosman were toying with the idea of launching a betting site in SA but were quick to realise that the gap in the igaming industry was to be found in the lack of software manufacturing to cater to the needs of the market. The pair then switched their attention to developing a business-to-business model, instead of a business-to-consumer one.

Says the company's CTO Ian Barnes: "BetTech Gaming gives small to medium-sized sportsbook operators the functionality they need to compete with the world's largest bookmakers." It also has the potential to be used by licensed casino groups and sports marketing agencies to cash in on a burgeoning market with the means to exploit their offline existing consumer assets and databases in an online environment.

Third parties

BetTech Sports is Web-based and offers Web, mobile and POS betting interfaces. Delving into how the platform works, Barnes notes that the software makes use of third-party products that provide odds and event details on sports happenings around the world. "We do the tricky integrations with these companies so our clients can use this information. These third parties make use of different feeds - there's the pre-match feed where bets can be placed up until the event starts, and an in-running or live feed where bets can be on the next event to happen in a match, such as betting on who will score the next goal. We package this information to be used by our clients, on our platform," Barnes clarifies.

We're now moving into emerging markets across Africa, Asia and South America.

Ian Barnes, BetTech Gaming

The BetTech Sports platform has been certified by Gaming Laboratories International and it's ready to be launched very soon. "All operations can be managed through one interface, an online casino back-office built into the same platform that handles everything from risk management, marketing and reporting to event management," says Barnes.

Competitive industry

"There's a software-only option, where our client is then responsible for the operational and marketing side of their business and we take care of software service and updates. Or there's the managed service option, which means we run the operational and software side while the client is responsible only for marketing. The white label option is obviously ideal for companies that want to make use of our existing consumer database and to have their customer service, trading and risk management handled for them.

PricewaterhouseCoopers predicts that South Africans will spend an estimated R24.2 billion in the sports betting industry by 2016.
PricewaterhouseCoopers predicts that South Africans will spend an estimated R24.2 billion in the sports betting industry by 2016.

"Most online gaming-related software platforms available locally are faced with issues caused by legacy systems. These are outdated and the companies using them have to regularly re-develop and re-engineer to keep up with the demands of the market," observes Barnes. "Where the BetTech Sports platform differs from other online betting software is that there will be no need for plug-ins of any kind down the line, which means that it's easier to future-proof the product."

Changes brought about by the National Gambling Amendment Act of 2004 have forcibly shaped the industry into what it is today. "By making online casino-related gambling illegal, legislation has caused horse racing and sports betting to take to the Web and spread to mobile," says Barnes. "With the constrictive legislative framework, every step of our process is tightly controlled and audited. We have to get Gambling Board approval for every version release we send out and all our figures, processes and requirements are just as tightly controlled. The plus side is that this long and expensive process makes it a barrier to entry for any new competitors in the market."

Not going it alone

Independent early-stage technology venture capital fund 4Di is BetTech Gaming's investment partner. Based in SA's Silicon Cape, the fund targets start-ups with big growth potential at seed and early stages in the mobile, enterprise software and Web sectors and selects teams with insights into the large market problems they wish to solve through technology solutions. BetTech began with a development-focused team and worked from 2009 until 2012 on developing the product itself before taking it to market in February 2013 at the ICE Gaming show in London.

Regardless of how difficult it is to enter this field, the igaming industry is still very competitive on all levels, from the supplier space to the consumer-facing operators, but Barnes is certain that BetTech Gaming has a unique product. "We're relatively new to the market and all potential customers want to see existing clients and a range of case studies as examples of the platform successfully integrated and operational."

BetTech Gaming has managed to attract multinational lottery organisations, premium casino groups, online bookmakers and casinos as clients and launched internationally at the industry's number-one trade show in London in February.

"We were short-listed for the 'In-play betting software of the year' category at the 2013 eGaming Review B2B Awards," says Barnes. "The ceremony is the Oscars of our industry. We're now moving into emerging markets across Africa, Asia and South America."

As for the future of BetTech Gaming, the odds appear stacked in its favour.

First published in the October 2013 issue of ITWeb Brainstorm magazine.

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