Last week, sports betting platform Lucra Sports raised a $10 million Series A round from backers including SeventySix Capital, Victress Capital and Raptor Group, among others.
This news came just days before the Kansas Jayhawks won the 2022 NCAA Men’s basketball title—after a three-week tournament expected to drum up more than $3.1 billion in bets—and a week before baseball’s opening day.
This deal got me thinking about sports betting—beyond my 5-cent NBA bets on FanDuel, of course—because I was initially surprised to see another company trying to emerge in what seemed like an already crowded market.
DraftKings raised $719 million in venture capital before going public in 2020 at a $6.5 billion valuation (it’s risen to $8.3 billion since). FanDuel raised $416 million in venture capital before being acquired by Flutter Entertainment for $4.2 billion that same year. Many gambling stalwarts like MGM and Caesars have jumped into the space as well.
Was there room for another upstart? I turned to my colleague Will Yakowicz, who covers the vices beat and is our staff gambling guru.
“I think there is room,” he tells me. “It’s a huge expanding market. Not all states have legalized, and when you look at mobile sports betting, there are only 18 states that have legalized. It’s still early innings when you look at mature betting markets like the U.K. and other EU countries. There is just a lot of money to be made.”
Some startup sports-betting platforms may be able to make a name for themselves by catering to niche strategies. San Francisco-based Lucra Sports is marketed as a tool for friends to bet small sums against each other as more of a social activity, as opposed to some of its larger gambling-focused peers. San Mateo-based Sleeper focuses on fantasy sports and esports—neither of which is well accounted-for on the traditional platforms. Sleeper has raised $67.3 million and counts firms like Andreessen Horowitz and General Catalyst as backers.
Will says he expects more innovation in the space beyond betting platforms, too. Several startups have launched in the last few years that offer services fans can use alongside those platforms or that cater to the betting entities themselves.
Simplebet offers micro betting, letting users bet on every aspect of a game, down to whether a pitcher’s next pitch will be a strike. The New York-based startup has raised $77.9 million, including a $28.6 million Series C last October, and sells its tech to sports-betting companies like DraftKings. Houston-based nVenue raised a $3.5 million seed round last month for its data platform, which produces real-time predictive odds for stats fans and sports bettors.
With legal sports betting appearing headed for more states soon—including possibly populous California—there will be a growing opportunity for more startups to enter the market.