ernard Marantelli is the founder and CEO of Colossus Bets, provider of the world’s major sports and racing jackpots. He has pioneered Cash Out, on which he holds 14 patents around the globe, and crowdfunded Syndicates. His vision for Colossus is to create lottery-sized jackpot products that every sports fan can relate to. The company’s strategy consists of delivering globally-pooled jackpots through a B2B network of operators, as well as through a UK-facing B2C channel. Marantelli also acts as an advisor to several gaming startups.
Today, Colossus jackpots are live with 60+ operators globally, including Betfair, PAF and Betway Africa, whereas the company’s patented Cash Out technology has been applied to other forms of betting and gaming, including multi-leg racing bets and online slots.
What are Colossus Bets' current operations, plans and expectations in the US market, following your recent agreement with AmWager? Why have you chosen that partner in particular?
Considering our significant US patent portfolio on Cash Out, we’ve been pursuing opportunities to bring functionality to the US market since the early days of Colossus. In simple terms, we can achieve this either by offering our own jackpots or by ‘wrapping’ our technology around third-party pools of liquidity. Racing wagering, given the exception it previously enjoyed from PASPA and continues to enjoy from the Wire Act, has been an obvious area of focus for us. Recent regulatory movements have actually reinforced this strategy because, on the one hand, the reversal of PASPA has encouraged racing providers to look for options beyond their core product, and, on the other hand, the Wire Act-induced uncertainty still surrounding interstate liquidity for sports betting continues to make racing the most relevant pursuit for us in the US.
AmWager have an expressed commitment to be the “best online wagering platform” and, in line with this ethos, were first to recognize the opportunity by adding our British and Irish pools to their portfolio. We believe it is only a matter of time before others follow suit. As for other US plans, we have entered an agreement with new partner eStars to lend our technology to their eSports product, largely targeted to a US audience. We have also developed and are soon to launch a MVP jackpot, which is based on the daily fantasy scoring system and can be classified as our ‘fantasy’ offering - the main implication being that we can get it to the market today across all states where DFS is legal.
Could you give us a brief description of the technologies and innovations you’re supplying to that market, and how could they stand out among the competition? How do the Advanced Deposit Wagering ADW tailored ‘leg-by-leg’ cash-out functionalities improve the customer experience?
Our multi-leg pools come with two major innovations, Cash Out and Syndicates - or ‘crowdbetting’ as we tend to describe it. Cash Out gives players the choice to sell all or part of their ticket after each leg of the pool (race) concludes. Beyond the obvious benefit of giving players more control, accepting a Cash Out offer often means ‘locking in’ profit on tickets that go on to lose. Without Cash Out, the experience would be binary, you either win the headline prize or you don’t. With Cash Out, you get a far more engaging experience, with more frequent payouts, which naturally translates into higher retention rates. And from an operator’s standpoint, you not only benefit from a more satisfied, loyal customer base, but also from a ‘de facto’ risk management tool as Cash Out effectively moderates payout volatility.
Syndicates, then, brings the concept of crowdfunding into the world of wagering. It allows players to join forces through shared tickets into our pools, while our platform eliminates the administrative onus and counterparty risk usually involved in sharing. Players get to leverage their contributions by participating in bigger tickets than they would afford in a solo play context, while enjoying a social betting experience. We in fact provide seamless sharing on social media platforms to encourage this interaction and we’ve seen several great organic ‘stories’ develop since Syndicates first went live over 2 years ago now. These USPs, along with the generous prize guarantees and consolations we offer, add up to a significant upgrade of the traditional ADW experience or, frankly, any wagering experience currently offered in the US market.
Are you working with emerging technologies in the gambling industry such as AI, Big Data, blockchain, etc.? Could you give us examples of that? Do you see new demands from customers in that sense?
I think it’s fair to describe our product as a technologically sophisticated one as it is underpinned by complex algorithms and a significant global infrastructure. That being said, we do not yet see direct application for these emerging technologies in our environment. Perhaps in the future, our tote engine will be AI-driven or our transactions will be held on a distributed ledger. But bear in mind that, as a gambling provider and operator, any technology we employ needs to live up to strict regulatory standards. And I’m generally skeptical of other companies ‘claiming’ these technological trends without articulating a clear vision of how they can be leveraged in their mainstream offering.
What’s your current assessment and expectations for your Oregon license to operate a totalizator? Has that license accelerated the launch of your Cash Out feature on existing US horse racing pools, as you projected when it was announced?
The Oregon license came both as an endorsement and a catalyst for the strategy we had been pursuing in the region as I outlined earlier. Discussions are ongoing with a handful of potential partners but I cannot disclose specifics until we have formal agreements in place. But what I can say is you can expect to see more of us distributing our own pools and licensing our Cash Out technology in the coming months, and, hopefully, not just in a racing context.
How is the current US sports betting landscape affecting your business areas? What opportunities and challenges did you, or will you leverage through this rapidly-changing scenario, and what are your strategies in that sense?
Again, it all comes down to prioritizing the opportunities and luckily for us, it is not about a single vertical or any particular state, so we have plenty of room to react quickly to changes and adjust our strategy. We, of course, hope to soon be in a position to offer our ‘bread and butter’ sports jackpots to a wide US audience. But this relies not just on more states legalizing sports betting but also on more clarity being achieved on cross-state co-mingling. In the meantime, this doesn’t preclude us from considering sports jackpots provision on a state by state basis, as at least a few single state markets are big enough to support the business case. We are also closely monitoring how state lotteries are adjusting their strategy, especially in terms of attempting the foray into sports betting, which is where we can easily step in to provide them with the perfect ‘bridge’ product in the form of our sports jackpots. Then, as we already discussed, we have the eSports and fantasy product angles. Ultimately, our next steps in the US will be partly driven by regulation and partly by where we can find the right partners for the right product.
Do you see room to improve regulations in some jurisdictions where you operate or you seek to enter in order to optimize the business, and how?
This is an easy “yes”. Without getting into the specifics of each jurisdiction, the biggest challenge is the lack of consistency across markets. And this is not an issue that will go away any time soon, although achieving a federal framework in the US would go a long way. Then, the challenges really vary jurisdiction by jurisdiction. In the US, as we’ve been discussing, it’s about getting more states to open and settling the Wire Act debate in a way that is favorable to collaboration across states. In the UK, where we operate in a mature regulatory context, we would hope that the ongoing public controversy around responsible gambling, and how we deal with problem gambling in particular, settles with facts-driven rules that encourage low impact products like ours, as opposed to ‘blanket’, industry-wide restrictions that stifle innovation. Elsewhere in Europe, we would like to see markets like Italy and Spain enabling more competition by relaxing rules on cross-border liquidity.
What could you tell us on your recent deal with SIS for British & Irish greyhound racing? What role does that business play in your company, and what are your prospects for it?
British & Irish greyhound racing, as with horse racing, is a betting vertical that has not seen any serious attempt at innovation in recent memory. Modernising multi-leg pools is our forte and it was only a matter of time until we got to it for greyhounds. Our deal with SIS enables us to cover high-quality greyhound racing content and distribute the relevant pools across our B2B network, including offering free live streaming of the races to all our players, which is essential given these are not widely televised. In reality, this is a niche offering for a niche audience but yet, it is promising - and heartening - to see the positive reception the announcement received.
Could you give us any more insights into your future projects, plans and agenda in the short and long term?
We covered a lot of ground today but the truth is our global strategy has many strands so it is hard to be exhaustive. In short, we are hard at work to deliver our vision of a global sports jackpot proposition. On a closing note, and taking a detour from the commercial agenda, we just launched our own charity scheme, Conscious Colossus, which aims to promote a corporate responsibility message and reinforce a corporate responsibility culture beyond what you usually see in our industry, by means of supporting some great causes. This is an area that will take centre stage for us more and more in the future.