Betting on Bilzerian: How a social influencer model might keep down acquisiton costs

Anyone that has spent any time on Instagram will be somewhat familiar with the bare rocky chest, grizzly beard, and various assault rifles associated with social media star Dan Bilzerian. Having amassed an Instagram following of 32 million, with a daily growth rate of 20,000 new fans, Bilzerian has been crowned (by his own following no less) the “King of Instagram.”

As a self-described venture capitalist, it seemed only a matter of time before Bilzerian dipped a toe in the betting world, if nothing else to cement his claim that he is indeed a successful poker player.

Leveraging Bilzerian’s overall social media following of over 53 million, i3 Interactive’s gaming platform-backed betting brand BlitzBet is expecting to establish an extremely low CPA model by converting Bilzerian’s fanbase, as he markets the product to followers and invites competition winners to spend time with him.

The start-up has managed to attract support from a handful of industry heavyweights, including former William Hill CEO Ralph Topping and ex-The Stars Group execs Andy Lee and Ian Marmion who joined BlitzBet as MD and trading director respectively in June.

Lee and Marmion share with EGR North America exactly how they expect to break the mould with BlitzBet’s low CPA model, and why previous operators have failed to integrate ambassadors properly into their brands.

EGR North America (EGR NA): How were you both enticed over to BlitzBet after having worked together previously at The Stars Group?

Andy Lee (AL): Ian and I both left The Stars Group at the back end of 2019. Then we had our notice period, which for me ended in May, and I was looking around for new opportunities. I had a couple of consultancy gigs but then I got contacted by Chris [Neville, i3 Interactive CEO] via an introduction from my former colleague, CEO Ralph Topping, who I used to work for when I was the MD of William Hill.

Chris explained this very exciting and unique story which completely piqued my interest in the space, having thought there was probably nothing that would necessarily float my boat given that Europe is looking challenging [for the sector]. He came up with this celebrity/influencer-led model which I think is very different as the primary acquisition route.

Ian Marmion (IM): I had no great desire to get back into the industry per se because it’s just a little bit jaded. But Andy called me and the idea of doing something completely different from a start-up perspective by trying to leverage 50-odd million social followers and blend that into a sportsbook brand sounded quite a challenge. On a personal level, I really enjoy working with Andy, so it was a no-brainer for me.

EGR NA: What markets are you looking at entering and how will the low CPA model work?

AL: We’re not US-facing yet because we don’t have a license there, but what we’ve done is a very so. launch in a very small number of jurisdictions, which hopefully will expand. Ian and I only joined on the first of June, so to have launched within a couple of months is in itself pretty good, but to expect to have gotten licenses approved [already] is a bit of a challenge.

Getting the site up and running, getting some customer feedback, and doing internal testing is what we’re doing right now. Then we need to make sure that we have an absolutely fit-for-purpose site that can deal with the very different approach that we’re going to take to the market via Dan [Bilzerian] and his tone of voice, and also deal with the amount of scale that we believe we’re going to get when he puts his machine into action.

We think one of the attractions here is that if you’re starting from scratch, to try to organically acquire a large number of customers will take a lot of time and an awful lot of money. And the reality is through Dan we have access to an enormous database.

Dan has an unbelievable engagement rate, the amount of impressions he gets on what he posts amassed over 30 million impressions. That’s a staggering number. We believe that we can get huge reach at very low cost, very quickly.

One hundred dollars for a CPA would be highly optimistic for a new start-up. If you wanted to get 100,000 customers, you’ve got to whack $10m into customer acquisition, and that’s a cost upfront that you then recover through NGR going forward. That’s why brands find it quite hard [to become profitable]. Our CPAs will be a fraction of that because of the agreement and partnership we have with Dan.

Dan has a shareholding in the company and so he is interested not only in the brand enhancement that we can give to him and he can give to us, but we will pay him a bounty. He has a 15% share in the company and his interest is obviously in the value of the company.

IM: It’s not a Pinnacle-type model, betting very tight lines to very sharp customers. It’s meant to be a recreational book that leverages the massive social power that Dan has. It will be football and US sports-led rather than racing-led in the typical UK fashion.

My mission objective here is when somebody comes to the site is that they see a price that’s palatable. It’s not about trying to target the really sharp players – it’s about trying to leverage these fans.

EGR NA: How did Bilzerian’s involvement in BlitzBet come about?

AL: This is before our time so we can’t really take credit for putting this together. Our founder and CEO Chris Neville has known Dan for quite some time. And in the last one to two years, they started talking and developed this idea, and that’s really about as detailed as I can go.

I think probably the US opening up more laterally piqued his interest as well because he’s got a large following in the US and, as I say, we’re not live there because we don’t have a license at the moment, but obviously it’s on the radar.

EGR NA: Why has this influencer-led model not yet been exploited by other operators? The only example I can think of is the Barstool Sportsbook or Swedish soccer star Zlatan Ibrahimovic and Bethard, but his influence was never properly leveraged.

AL: I think it’s a newer way of looking at things. And if you look at Europe, a lot of the operators are established, more old-school-style sportsbooks and the breakdown of market share in a lot of these places is largely entrenched and established. They have certain brands and certain values.

I think it’d be quite difficult for a William Hill or a Sisal or even bet365 to decide that they want to change their brand to something that is Dan-esque. And I think that while the industry has been innovative on certain things, it can be quite slow to change. And I do think this is a model that is increasingly attractive and will become increasingly prevalent.

EGR NA: What have you learned from your time at The Stars Group and other tier-one operators that you can bring to BlitzBet?

AL: My biggest fear, certainly from a brand and marketing perspective, and in getting something up and running as a start-up, is vast acquisition costs. There are an awful lot of older brands out there that have got all the technology and the features that they need and have invested hundreds of millions in this.

To cut through and differentiate just with a bland, typical offering would have been a no go. The biggest concern for me was whether our CPAs were gen genuinely going to be materially lower than the industry average, and I do believe they will be.

The second thing is, can we genuinely differentiate ourselves in a largely commoditized market? Let’s be honest, the sportsbooks out there are not fundamentally very different. For us, I genuinely believe we have something in Dan because I think he’s totally different to what is out there at the moment.

The adverts and the brands that you see are all very similar. Dan may not be everyone’s cup of tea, that’s for sure. Even he would admit that because he gets some negative feedback on his side. But the reality is that some people absolutely love him.

IM: I think it’s an opportunity to move away from the gray, boring approach of most of the sportsbooks we’re familiar with, to be a little bit risqué and be able to take chances that you’re not able to take at a corporate brand. Being able to take them and marry them up with a homogenized product, alongside offers and promotions and money-can’t-buy experiences with Dan Bilzerian will massively differentiate us in a pretty bland marketplace.

EGR NA: How will Dan Bilzerian be properly integrated into the brand?

AL: We are looking at other influencers and celebrities who can tie-in very nicely with Dan. So, there’s a mutual benefit to both of them as well as the Blitz brand that can take place through interaction between those two. Whether it’s a local influencer supporting what Dan’s posting, or Dan supporting what a local influencer is posting, those are options.

We may look at other celebrities as well and put them on the roster to complement and amplify what we have with Dan. Where it’s appropriate we’ll look to partner via licensing agreements with companies in countries where it’s tough to get a license or the company is well placed to do a partnership with.

EGR NA: What sort of team have you forged at BlitzBet? Have you brought on any other former colleagues, and how did you coax them over?

IM: It’s quite difficult to build a team anywhere at the minute. i3 has a central management team that operates over a number of different jurisdictions. Within BlitzBet, we’ve built up a team of 18, all spread across different corners of the globe from Dublin to the UK, the Isle of Man, Canada, Brazil, Gibraltar, and Spain. And very few of us have met face-to-face as a consequence of Covid-19, so it’s been challenging.

AL: Some [of the team] come from Stars [Group], some from William Hill, and others from MoPlay in Gibraltar. What we have is a commonality where none of us are more than one connection away from a previous workplace or colleague.

If you’re just starting a business in this Covid-19 world, you don’t know each other and you’re not meeting each other face-to-face and it can be quite difficult to establish, but I’ve worked with most of the people in the team already, or at least I know someone who I trust a lot who vouches for everyone who’s there and that has been absolutely critical for the speed at which we have been doing things.