Sports Betting Innovator Launches New Start-up

Douglas FraserBusiness and economy editor, Scotland


Among Scotland's most effective technology groups is starting once again with a brand-new company - and has actually secured the most significant preliminary financial investment of any British start-up company.


BetDEX is being led by Nigel Eccles, who co-founded fantasy sports wagering site FanDuel in 2009 in Edinburgh.


The new firm has seed funding of $21m.


It intends to release a brand-new open source software platform, on which others can innovate in sports wagering, in the first half of next year.


The business is hiring personnel from a base in Scotland.


FanDuel was offered to Flutter - previously named Paddy Power Betfair - in 2018 and is now worth more than $30bn.


However, Mr Eccles and other co-founders are in legal conflict with FanDuel's later phase financiers over the way in which they structured a takeover, which left the Edinburgh group without a share of the rising valuation.


Mr Eccles stated that one thing he gained from the FanDuel experience was to select financiers carefully.


He told BBC Scotland: "We took a great deal of lessons from that, one of which was the importance of who we select as financiers in this new service, to ensure their worths are lined up with ours, that they take their fiduciary duties responsibly, which they're the right partners for us."


The $21m seed financing for BetDEX consists of stakes taken by seven backers of US innovation companies, including 2 large funds - Paradigm and FTX - which specialise in purchasing companies running with crypto-currencies.


Varun Sudhakar, president of BetDEX, stated: "The sports betting industry charges high costs for poor products and limits trades by its most successful users.


"BetDEX is diametrically opposed to this approach. We will effectively compete versus incumbents with a markedly remarkable product and low charges, which is now possible with the development of the blockchain technology."


As chairman of the brand-new firm, Mr Eccles stated it could look familiar to retail punters utilized to existing online companies.


'Pool of talent'


However, he says that those who use its platform to run their own wagering companies will have the ability to innovate and create a larger variety of betting products.


He stated the typical share taken by online bookies is 7% to 10% of a stake, but BetDEX needs to permit that to fall below 1%.


The business will establish its own betting apps to operate on the platform.


Mr Eccles said these would take an "intelligent, thoughtful" technique to the method they are marketed to safeguard those who fight with issue betting.


He stated the group of around 500 software application engineers who assisted develop FanDuel from Scotland showed that it remains the location to construct a company. BetDEX has the exact same head of innovation, Stuart Tonner.


"A great deal of that [FanDuel] success was built on a highly proficient, very gifted engineering team, that constructed this item that could of bets and millions of users.


"There's a genuine talent swimming pool of skilled engineers who helped us develop our item which's what we want to leverage for BetDEX also."