1st November 2018
Bernard Marantelli discusses Colossus Bets’ Cash Out process, innovation in the industry and the steps his company is taking in the wake of PASPA
Cash Out seems to be the most pervasive innovation in European gambling in the last five years. What can we expect to see in the space in America?
Cash Out is the perfect product because it gives both operators and players a good deal. It should become as widespread in the US as in Europe. Also, in the US, cash out was trumpeted as a must-have feature from day one so many sportsbooks launched with it. On the flipside, the US will differ on a few fronts. Cash out will need state-by-state regulatory approval. And patents are critical here, whereas they are virtually absent over in Europe, so operators will not have carte blanche to replicate features.
A lot of online bookmakers over in Europe offer cash out functionality. What’s different about your version?
Colossus was the first operator to introduce cash out and partial cash out. Most firms now have partial cash out, although a few still restrict it to an all-or-nothing decision on technical or UX-related grounds. I’d say the main difference is our cash out process takes place within a tote or pari-mutuel pool, which is harder to deliver than in a fixed-odds setting.
Horse race wagering has long been the most legally available and widespread form of online betting in the US, but how does the lifting of PASPA change the opportunities for a business such as Colossus?
It’s a blessing and a curse. On the one hand, racing operators are in a great position to monetize their existing player base by extending into sports betting. They also hold an oligopoly on racing betting so they’re better set to offer a full product suite. On the other hand, people who bet on horses might now flock to sports. Either way, given that Colossus guarantees the biggest racing and sports jackpots in the world, we think we’ll fit nicely into operators’ US roadmaps.
The industry is criticized for a lack of innovation, but new products launch into the online betting space regularly now. Is the industry more innovative these days or does it come down to other factors, such as critics conflating disruption with innovation?
There are plenty of people looking to generate a USP and still, sadly, the majority of European start-ups fail and then see their innovation replicated by the big operators. That is not to say that big operators never innovate, but they tend to be followers rather than leaders. The US might be different in this regard, firstly because they fund and support start-ups more vigorously. Also, patents protect inventors and first movers in a way they don’t in Europe. So on the whole, I think betting in the US might foster innovation better than in Europe.
The regulatory tendency in igaming is towards ring-fenced markets and therefore liquidity pools. What challenges does this present?
Ring fencing liquidity has historically occurred where there was a legacy, quasi-governmental operator. These limitations have been lessened due to online competition and evolving regulation. However, the challenge could persist in the US market despite PASPA being repealed. Notably, tote betting on races enjoys an exception from the Wire Act so it is legal to cross most state lines.Ultimately, liquidity in big jackpots is key and harder to achieve if the market is fragmented. Colossus currently sell pools in over 30 countries, including most major European and African markets, so we are not being overly restricted, at least not more so than fixed odds operators.