'eToro for betting': Has Betconnect solved the social betting conundrum?

Last month’s EGR Intel cover feature looked at social betting and various attempts to crack what could be a massive opportunity for the industry.

The upside is the chance for operators to tap into the millions of hours people spend talking to friends and contacts on their phones, and slip betting seamlessly into those conversations. The likes of Sky Bet, Matchbook and Colossus are all working on different solutions to the problem, but the consensus is that no-one has quite nailed it yet.

Last week, a new contender emerged in the form of Betconnect, the self-described eToro for betting.

In short, Betconnect is a peer-to-peer platform with two groups, ‘pro’ and ‘punter’. The professionals put their bet requests in – £10k on Chelsea for example. The site’s algorithm might split this bet up into 100 different bets of £100 which are sent to the punters.  Once the punter has matched the bet request they can then go and place the same bet at a bookmaker – perhaps with a little extra for themselves – or choose to lay it. Betconnect present these punter choices as “Copy”, “Follow” or “Lay”.

“It’s a social network, matching up people who know what they’re doing with ordinary punters,” says co-founder Mark Weaver. “We’ve taken the best bits of a social network and a betting exchange.”

Weaver also likens the product to eToro and its ‘copy’ mechanism which allow customers to automatically follow certain traders or funds.

“To take that analogy further, our experts have more legitimacy than eToro’s,” Weaver says. “In the financial world, Warren Buffett isn’t on eToro publishing his strategy.

“Well we are going to have the equivalent of Warren Buffet on Betconnect, so we believe our proposition is even stronger because we are going to have the absolute cream of the crop.”

So can Betconnect really be appeal to pros, recreational bettors and operators alike as Weaver claims?

What’s in it for the pros?

Co-founder Dan Schreiber says the start-up had spoken to “a lot of football syndicates” in London who were keen to test the platform with several involved in the public and private betas.

But why would a syndicate use Betconnect instead of their existing options, presumably exchanges and Asian bookmakers?

“There’s a lack of liquidity at the moment,” says Schreiber. “I was a big Betfair user in the early days and liquidity was massive but it’s dwindled and it’s only going one way. They’ve penalised themselves by attacking pros with premium charges and high commission.

“Liquidity levels in Asia on football have also reduced over the past three years.. Beyond that we also cover a lot of markets that aren’t on Betfair as well.

“The other thing about the Asian market is that the lines are often worse than the UK. The syndicates have to use them because they have the liquidity, but they have to take a worse price. We can offer the best of both worlds.”

Commission rates start at 3% but drop as volumes increase, meaning professional syndicates will be paying lower than 1%. It remains to be seen whether it is a feasible model for pro bettors to use long term, with one professional racing bettor telling EGR he had signed up because there was “no downside to trying it”.

“I’d be sceptical it has any longevity,” he added.

The ‘pro’ dashboard

What’s in it for the recs?

The proposition is theoretically more attractive for recreational punters who are getting access to the betting strategies of professionals.  They can input what type of risk they are willing to take and what sort of sports they want to be offered, and the Betconnect algorithm will optimise what bet offers they are sent over time.

Pro punters’ bets are also published for all to see after they’ve been fully matched, meaning there could be a real community around sharing the bets and customers cheering them on together.

One concern is that punters would frequently accept the bet request and then refuse to match it, essentially gaining the information for free. However, Weaver points out that punters are rated in the same way customers are on eBay or Uber, and if they consistently reject bets, they could stop receiving future requests.

Another concern is how many punters will have enough cash lying around to sufficiently fund their accounts.  Liabilities on 10/1 shots add up fast, even on small stakes, and punters will need to fund both their Betconnect accounts and various bookmakers.

The final question is how long these accounts will last if punters are suddenly hitting best odds in the market and beating closing prices.

What’s in it for the bookmakers?

How long accounts last is basically up to the bookmakers, for whom it seems Betconnect is the toughest sell. After all, the app is essentially a way for restricted punters to get their bets on at UK shops– hardly an appealing proposition for the bookies. Weaver however argues that Betconnect can be a useful tool for them:

“The best case scenario for us, is we act as the biggest bet stimulation platform the industry has ever seen,” he says. “For operators, they might take the Betconnect feed and get a crystal ball into the leading edge of the demand curve – they can see exactly what they need to do on the price.

“We believe strategic operators will embrace this concept because you could see unprecedented engagement and get ahead of the market.  Potentially everybody wins.”

One exec at a leading European operator was less convinced however, saying: “Instinctively, apps of this sort surely can’t play both sides of the fence. It’s either an app that’s good for punters or good for operators. I think you could see all these punters come on at the same time so you get a Hugh Taylor effect, where the price collapses and accounts get clamped quickly.” That scenario is not particularly helpful for anyone.

A bet request from the punter point of view

Outlook

Betconnect potentially has upside for punters and pros alike with its social features and levels of engagement, but its future could ultimately be determined by how operators react to it. If they embrace it they could potentially offer up their APIs so punters can click through directly from Betconnect, but if they oppose it and start shutting customers down, things could go south fast.