Oulala Games Ltd.
CEO Valery Bollier gave CalvinAyre.com his insights on the growing daily fantasy sports market in the UK.
A number of start-up companies are vying for their share of the European DFS market and Oulala Games says they’re ready to ride the wave after the launch of a new monetized version of its website.
Founded in 2013, the company started as a free game to familiarize the expectations of the European customers because simply duplicating the US model wouldn’t be good enough Bollier told CalvinAyre.com.
Users can now compete against other players to win real money. The company said they believe the platform is the first to allow players to make changes real-time as games are being played.
Daily fantasy sports landscape: Europe vs the US
“There are more differences than people think! Of course, the most obvious one is that we are not playing the same sports. In the USA, American football is the most popular sport, 73% of customers will play Fantasy NFL at least once during the year 2015. They also play many different sports such as MLB, NBA, NHL and NCAA. Even though the number of soccer players is rising, from 12% in 2013 to around 20% in 2015, people still mainly play (fantasy sports) on the local MLS teams.
“In Europe, the only sport that can realistically build a huge community is football (soccer). When it comes to football clubs, Europe is the epicenter of the world and even the best Brazilian or Argentinean footballers play for European clubs.
“Therefore, the most obvious difference is that the USA has multiple sports and a domestic market whereas in Europe we have only one sport but a worldwide market.
It is also key to realize that the European market is a much more complex market to operate in. Europe has multiples languages, different levels of market maturity because each country is different, there are different currencies and, even more importantly, a cultural difference between the relationship of data and sport.
Why football enthusiasts would choose DFS over traditional sports betting: the answer is Big Data.
Most countries in Europe allowing fantasy sports have already included fantasy sports in their traditional iGaming licenses. One example is the UK, where DFS falls in the same category as sports betting and horse racing. Therefore, the operators need to acquire an operating pool-betting license from the UK Gambling Commission.
Bollier explained why sports bettors will jump on DFS even though sports-betting isn’t taboo in the U.S.
“There are already 6 million people playing free fantasy football in the UK. As the game is more fun, once it has been monetized, it is obvious that an important proportion of those people will quickly jump on board as they did in the USA.
“In order to answer your question on a macro point of view, you need to analyze the radical impact of Big Data on sports betting. In the short term, the development of big data seems to be beneficial for sports betting as clients’ demand for more statistics is growing quickly, since they rightfully think that it increases their odds of making money. However, there is no doubt that clients will eventually realize that Big Data is instead helping bookmakers to optimize their odds. Simply put, if Big Data allows bookmakers to predict and price the outcomes of sports events even better, clients will start losing interest.
“Big Data will revolutionize the sports betting industry. One can therefore predict that, in the long run, sports betting clients will massively become DFS players. To reduce this risk, it makes sense for sports betting operators to start offering the DFS experience to their clients as early as possible, in order to anticipate this potential shift.
“This is the reason why next month we will commercialize a white label solution of our game. The iGaming operators need to have access to this new market quickly because, as always, when a new product arrives – like poker did 15 years ago – the first movers are often the winners. Fantasy sport is the next big thing arriving in the European market. With Oulala, any operators willing to benefit from this new opportunity will have access to a plug-and-play solution within the next few weeks.”
Daily fantasy sports: a perfect substitution product for sports betting
“We strongly think that daily fantasy sports is the perfect substitution product,” said Bollier. “Instead of playing against the house, with DFS, individuals can play against the community – the house takes a small commission as there are no more financial risks. Also, instead of playing a game where you don’t prove much when you win, with DFS you can finally prove to your friends or the community that you know sports better than they do. You win a lot more than money, you win pride! So in a digital world where everything is becoming social, DFS is definitely a natural next step.”
Impact of DFS controversies in the US in Europe
Bollier said that the crisis in the USA was inevitable but will not hurt the young DFS industry in the Europe.
“What happened is that the [US] market grew from nowhere so quickly that American legislators did not have time to adapt to the market reality. In Europe, as we already have iGaming legislations running, by default and even if it’s not ideal, all the serious DFS sites already have a license. Oulala has a pool betting license in the UK, even though we are not a sports betting activity.
“As soon as a game is monetized, it is healthy and normal to have a legal authority, it’s simply in the best interests of the whole ecosystem. It is good for the clients, of course, but also for the operators because the clients’ interests are secure and they feel safe to play more. We started working with the Maltese regulator many months ago to build a tailor-made framework for DFS, and we hope that Malta will soon be the first European country to offer a specific license for skill games.”
“In Europe, we have absolutely no fear that the sector will become illegal. A common mistake would be to assimilate the American market and the European one. After a few years where the industry grew without any restrictions, the American legislator may, again, take the opposite position as they did for the iGaming industry.
“It is possible that in Europe, for cultural reasons, legislators might be tempted to suffocate the kill this golden goose with too many taxes and administrative burdens. However, Benjamin Carlotti, my partner and co-founder at Oulala, and I strongly believe that they will be smart enough to not do it. The reasoning is simple: DFS does not threaten any national monopoly unlike, for example, the way online bookmakers did in France. DFS is a brand new market opportunity which will create jobs, generate tax revenues, and contribute to building the digital economies of the countries that will be wise enough to offer an attractive environment to the rising stars of the sector.”
Oulala is expected to close on further £7m investment within the twelve months period and the funds will be used to increase the company’s user base in new markets. The company is also set to launch Oulala Australasia in conjunction with its existing Asian partners.
