Gaming won big in 2021, with the American Gaming Association (AGA) declaring it “a new record as the highest-grossing year ever” for U.S. commercial gaming at $53 billion in revenue.
The industry is moving fast with states setting their own timetables and rules, leading the AGA to ask Attorney General Merrick Garland to crack down on unsanctioned sports books. It’s the ideal time for a form of online betting that takes big oddsmakers and offshore operators out of the equation to let regular people have a bit of fun.
That’s the idea behind Lucra, a peer-to-peer (P2P) wagering platform that founder and CEO Dylan Robbins sees as a more personal way to tap into demand and immense potential.
Telling PYMNTS there’s a “tremendous amount of demand for avid traditional sports betting in the U.S.,” Robbins said that existing sites ostracize “the 100 million sports fans out there who like LeBron James, or follow the New York Knicks, or they’re a fan of Tiger Woods, but they’re not really engaging in wagering today.”
Many who aren’t wagering but would like to tend to be confused over legality and security and that it doesn’t feel “approachable.” Additionally, most don’t understand the jargon.
“What is parlay, teaser juice, vig, odds, you know? It’s a complicated thing,” he said.
Mainly, even the uninitiated gambler knows they don’t trust house odds.
“Many of them say, ‘I don’t want to bet against a black box,’ or, ‘I don’t want to bet where I don’t have the same information as the other operator. I don’t want to bet in a pool of 5,000 people, I want to bet against you, or my brother or my sister,’” Robbins said. “That social interaction is the tie-in.”
Gamified 1-to-1 sports wagering against friends and family for small amounts is safe enough for it to pass the litmus test in 37 states, per a legal opinion Lucra had drafted, which is turn was enough to attract $10 million in Series A funding announced in March.
Narrowing the focus to social betting gives people who are already engaging with sports a new way to wager, Robbins said.
“People who are talking about it, chatting about it, now they’re wagering on it,” he added. “It’s huge for fan engagement. If you’ve got $10 on the game, studies show the adrenaline, the brain waves, just the way you feel about it changes.”
Betting on Compliance
Much of the legal wrangling around online betting comes down to games of chance versus skill-based games. States regulate the two types differently, which works to Lucra’s advantage.
Calling Las Vegas odds not much more than a coin flip done by people you don’t know based on subtleties you may not grasp, Robbins told PYMNTS that Lucra is a user-generated platform. Using the site, users create their own contests, create their own set of terms and share it all with one another.
“We take out a lot of the chance,” Robbins said. “Lucra is really focusing on the skill-based arena, where 37 states, per our legal opinion that we had written up by our team, allow us to operate.”
When the 13 remaining states will come onboard “is hard to timetable,” he said, but Lucra is going in a different direction than Caesars Entertainment, DraftKings and FanDuel — and may have an advantage. Part of it comes from the groundwork done in compliance and an anti-money laundering (AML) and know your customer (KYC) tech stack that puts users and regulators more at ease.
“We won’t be the guinea pig. We’re a conservative company in that regard. We built our business legal-first,” Robbins said, calling it wise to follow trails blazed by bigger operators.
While not naming platform partners, Robbins said Lucra is “working with the same folks in the space that a lot of the big players are. We’re working with the highest-quality people, both in KYC and AML, compliance, etc. I think it’s helped us build a very safe and transparent platform.”
That goes for banking and payments as well, where Lucra leverages its banking partnership with an in-house team “working day in and day out on our product, analyzing our data pattern recognition, transaction monitoring, checking the reports and making sure that all our users are operating under our guidelines,” Robbins said. “Anti-money laundering is huge, especially in peer-to-peer.”
While not alone in the P2P social gaming space, Robbins feels that Lucra has “built a really strong legal moat. We jumped on this a few years ago when we saw the opportunity and been working hard at it. It opens this whole new market of folks.”
Calling out interesting stats from the current user base — numbering “about 10,000 or so” at the moment — he noted that Lucra is accomplishing its mission of making online wagering less anxiety-producing and more friendly. You can see it in the user stats he shared.
“One out of every two wagerers on Lucra has not placed a wager before,” he said. “Our average wager size is $15. This is not about taking money from your friend for rent. It’s a fun, casual, ‘I’ll buy you a beer after the game’ type situation.”
It’s not the hard-driving high-stakes world of NFL, NBA and NHL gambling, although all those leagues, teams and athletes are available through Lucra. It’s the nature of bets that’s different.
Coming out of stealth with a $10 million cash infusion will allow Lucra to focus more on product development and marketing, although the social nature of the gaming platform is doing the marketing work now as virtually all users are being generated by word-of-mouth. In a word: Social.
As for the next three years, expect Lucra to branch off P2P sports wagering to enable friendly bets on just about anything.
“Lucra’s mission is to connect people with friendly competition,” Robbins said. “Sports isn’t in that mission, but sports is a great entry point for us. It’s a proliferative industry, it’s a competitive industry, people are used to paying for it, but we want to expand outside of sports.”
It could make your next game of chess far more interesting.