Slots veteran FredrikElmqvist is trying to make it in the crazy world of sports betting. But will it work?
Elmqvist is a well-deserved king of slot machines.
ParlayBay is a new micro-betting platform that the Stockholm native has been pursuing for more than ten years.
The Swedish entrepreneur is a keen observer of where the action is. He described it as a “pretty exciting” time to start a venture like this.
Elmqvist describes the US sports betting landscape as it is changing after the marketing wars that characterized the early days of the PASPA repeal.
He says that there has been a shift in sports betting over the past few years. “You see in the United States rollout both new products and lower marketing costs to keep the market cost down as well as new players,” he said.
The recent death of another Indiana igaming bill in committee suggests that sports betting may be the place where the most creative energies are expended going forward. It is also the place where Elmqvist and other more imaginative figures will be appearing.
ParlayBay launched with a free-of-cost play, just like many other start-ups looking to get in the door before embarking upon a multi-jurisdictional licensing process.
November marked a significant milestone for the business when it went live with real-money games. This was possible thanks to the partnership with 7bet in Lithuania, a gaming operator that Elmqvist had joined around a month prior.
He says, “It’s a great time to join – I love this stage of a company.” “At this stage, everyone is involved in the process, and everyone works together.”
Slots to Sports
The micro betting vertical is gaining a lot of attention at the moment. Many operators see in the offering an intriguing vision of what a truly American betting experience will look like – the cure of the dreaded spreadsheet-ification fears that have dogged the launch of sports betting in the US.
The Atlantic product is still European in its core aspects. This argument goes on. New products that are more appealing to the American consumer are required.
Many operators view micro betting as a way to continue growing their revenue as the growth of US sports betting slows. Micro betting has more similarities to igaming than traditional sports betting. It offers instant gratification and a frequency that is higher than traditional forms.
H2 Gaming Capital has recently published a report in partnership with iGB on this segment. It argues that we will eventually see in-play betting levels similar to European Tennis and Basketball in American sports.
Elmqvist says, “The Parlay Bay space – same game parlays and micro betting – is the right timing for us to also enter the US market. This is something we are currently looking at as we formulate strategy over the next few months.”
Big in America
Many people in the industry consider it impossible to enter the US market as an operator due to the increasing consolidation of the market. As such, many see entering as a supplier to American success.
Elmqvist says that there are a few exits from operators, and that some operators didn’t enter the market that you expected. With all the regulations, restrictions and scrutiny there is a certain bottleneck to entering the market.
Churchill Downs has been an interesting online operator that successfully transitioned to supplier. The company announced in July 2022 that it would transform its online sportsbook TwinSpires to an entirely B2B offering. This culminated in November’s announcement that the business would provide DraftKings with a horse-racing product, , which is the charmingly named DK Horse.
ParlayBay is not the only vertical business looking to make a splash. Elmqvist doesn’t believe that all the organisations will be in the same place with their unique propositions.
He says that there are “a few” companies out there, which take a lot of market share and have similar products. “So, I believe there is room for guys such as ParlayBay and SimpleBet to coexist in the same arena.”
ParlayBay’s future may be uncertain, but Elmqvist has done enough to establish his reputation as one the most ingenious individuals in the industry.
The gaming industry today is very different from the one Elmqvist entered many years ago.
“Oh my god, it’s changed tremendously. There have been so many twists. We witnessed what happened to poker when we received the UIGEA. “We had the beginning of European regulations.”
The business landscape was vastly different from the multi-national conglomerates of today, despite the gradual rise in the global regulatory regimes.
Elmqvist says that “the big guys were basically the same as in UK – and ofcourse there were guys from Italy, but they were very separated.” It was not as globalized or pan-European today. It was more local.”
Differences in the gaming industry between the noughties, now are a difference in type, not in size. It is inevitable that 2023 will be a different year than the previous. Technology was once the only limiting factor.
Elmqvist believes, perhaps prosaically, that regulation is the greatest roadblock to change in these times. However, he also believes that regulation can bring perverse forms of innovation.
He says that while the regulations can be a hindrance to innovation, they also force people to invent to create great user experiences within the restrictions. How can we provide the best UX while still complying with the five-second rule? That is a small innovation you might be able run for six to twelve months before some regulator blocks it.
Elmqvist believes that the year ahead could be a time for experimentation, even though industry is still abuzz with talk of layoffs.
“During layoffs it’s not only the lowest performers who are being laid off. There’s also people being laid off across all levels of the company – even people with experience.”
Elmqvist claims that ParlayBay CEO Patrick Nordwall met for the first time in similar circumstances, as they both worked in the IT industry during the Dot.com boom.
“There were many companies that participated in the explosion of innovation, drive to global markets and development of new products. After being laid off during the crash, people came back swinging with new products that have proven to be successful today.
“We will see a lot more of that stuff happen. Innovation will take place now, in high-pressure times when people are laid off. Whether or not it’s part of ParlayBay space, there will still be people.
“And we know that with the global aggregation systems available now, especially in Europe if you have a great product, it is possible to get it to market quickly and make an impression, something we couldn’t do when we started.”