Unlike other US operators offering bets on the Super Bowl, such as FanDuel or DraftKings, Dabble is not worried about who wins. In fact, customers on its app could not even place a bet on either team.
The bookmaker is more concerned whether the Chiefs’ Travis Kelce will get more than 80 yards (70 metres) in catches, or whether the 49ers’ Christian McCaffrey will get more than one touchdown. This is because Dabble is not offering sports betting to punters. It is harnessing the popularity of fantasy sports, a phenomenon that focuses on individual players’ performance rather than the outcome of a sports match.
It is a market that was operating before sports betting was legalised in the US, but has taken off recently.
“There’s a bit of a carve-out in the US about what constitutes legal gambling,” Mr Rundle said. “It was a better option for us as a software business to be able to pivot to and build a product that we could plug into our existing platform.”
“We can predict the performance of individual players within the game, but we can’t take anything on the game itself. You might predict Christian McCaffrey is going to get more than one touchdown or less than one touchdown and so on and so forth.”
There are early signs that this type of betting is popular. The bookmaker has about half a million registered users and is receiving about 100,000 bets a day into competitions, mostly related to the NBA.
Mr Rundle says the strategy implemented by Dabble means it does not have to pay market access fees which typically are linked to a casino licence and require a bookmaker to pay a percentage of profits and revenue, and taxes to the state government.
“We expected our payback period to be very short. We expect to be profitable pretty soon,” he said. “In most of the states we’re in, we don’t have those costs and we can obviously retain more of those more of that revenue as profit and either continue to invest in growth or to take profit out.”
Dabble isn’t the first Australian online wagering company to try its luck in the US. In 2020, when ASX-listed PointsBet announced plans to move into the US to capitalise on the legislation of gambling, its shares almost doubled.
Rising costs and competition in the US wiped much of the value of the business, which ultimately led to the sale of assets to US sports merchandise company, Fanatics.
PointsBet CEO Sam Swanell has said the withdrawal from the US market was necessary given market conditions and the amount of money larger companies had to invest on marketing.
In 2021, another local wagering operator, BlueBet, began its foray into the US. It has since started operating in Iowa, Colorado and Louisiana. BlueBet is deploying a “capital lite” strategy, which ultimately involves offering its technology and expertise to bookmakers looking for a back-end solution. In the second quarter of 2024, it generated gross win of about $800,000.
Mr Rundle expects by the time Dabble wants to operate sports gambling services, the cost of market access will have declined.
“Our long-term view is over the next three to five years we’d expect to be live in multiple jurisdictions within the US and potentially, Canada,” he said.
Tabcorp agreed to pay $33 million for a 20 per cent stake in Dabble in October 2022. It gave the social betting company an enterprise value of $165 million. As the company continues to grow, Dabble will need more capital. Mr Rundle signalled that he is open to Tabcorp taking a bigger stake.
“We’re funding our growth from a combination of existing capital reserves and what we’re getting from revenue,” he says. “But … getting into betting in the US, that’s probably going to have capital needs. We’d need to have some conversations about how we got that capital.”
In October 2022, following an investigation in The Australian Financial Review, Meta removed pages with links to Dabble that were found to be using Facebook’s AI chatbots to send users private messages luring them to sign up to gambling apps. It has also heavily promoted its products on TikTok.
George Barham, an accomplished journalist and avid gambling enthusiast, serves as the esteemed Editor-in-Chief at fly-to-australia.com, Australia’s leading source for comprehensive gambling news and insights. With an unwavering passion for both the written word and the ever-evolving world of betting and gaming, George brings a wealth of knowledge and expertise to the helm of our editorial team.