April 19, 2024

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The Sports Fanatics

Ohio native Jake Paul could change sports betting forever

CINCINNATI — Ohio native Jake Paul will reach a global audience Sunday when he fights Tommy Fury in a pay-per-view boxing event, broadcast live from Saudi Arabia.

But it’s another kind of audience that has some people worried about Paul. That’s because he co-owns a sports gambling company called Betr. And he has millions of his social media followers under the age of 21, the legal sports betting age.

“I have a lot of concerns about the social media audience,” Massachusetts Gaming Commissioner Eileen O’Brien said last month before she cast the only vote against a temporary gaming license for Betr, an online sportsbook that launched in Ohio Jan. 1. The Massachusetts license was approved by a 4-1 vote in advance of a March 10 launch.

During a public hearing on Jan. 10, O’Brien asked Betr executives about the intertwining of social media strategies for the company’s sports-media channel and its sportsbook. She asked how Paul’s audience fits into that strategy and whether Betr was “priming them to jump into” sports betting when they turn 21.

A Betr executive told O’Brien the “overwhelming majority” of its social media followers are over 21.

“That’s who we’re always marketing, featuring, targeting to in everything that we do on the Betr channel,” said Jake Strasser, head of content strategy.

Betr declined to reveal the demographic details of its social media audience in the Massachusetts public hearing. So, the WCPO 9 I-Team obtained estimates from Empower, Cincinnati’s second-largest marketing firm, which tracks influencer marketing as a service to its customers.

It says Betr has 669,000 followers on Instagram, Twitter, YouTube and TikTok, 26% of them between the ages of 13 and 20. Paul has nearly 70 million social media followers, 38% of them younger than 21. Those under-21 percentages are higher than Barstool Sports at 25%, FanDuel at 16% and DraftKings, 13%.

Betr CEO Joey Levy defended the company’s marketing practices in an interview last week.

“By no means are we particularly targeting younger consumers,” Levy said. “We actually are the only regulated operator in the United States to proactively limit deposits for younger bettors, 21 to 25 years old. And we’re also the only regulated operator in the United States to proactively ban credit cards as a method of depositing.”

Those answers aren’t good enough for Les Bernal, director of Stop Predatory Gambling, a Washington, D.C.-based nonprofit.

“They’re marketing this product to people who aren’t fully developed as individuals,” Bernal said. “If you’re a young person now in Ohio, you’re not normal anymore if you’re just watching a game for the competition. They create this expectation that you have to be betting on these games.”

@betr Joe Burrow on the phone?!? 🤣 We’re in Cincy for the game! #ohio #cincinnati #cleveland #bengals #joeburrow #football #nfl ♬ original sound – Betr

What are the rules?
Here’s what Ohio’s administrative code says about marketing sports betting products to people under 21:

  • “Sports gaming advertising must not … target individuals under the age of twenty-one.”
  • People under 21 “may not be depicted in any way that may be construed as the underage individual participating in or endorsing sports gaming.”
  • Ads are banned on college campuses “except for generally available advertising, including television, radio, and digital advertising.”

State law does not define what it means to “target individuals” with advertising and gambling companies are not required to verify that social-media followers are over 21, said Jessica Franks, spokeswoman for the Ohio Casino Control Commission.

“Some of these individuals may see a sports gaming advertisement as a result – just as they may see one on television or hear one on the radio,” Franks said.

Betr has never been accused of targeting young people with its ads, but two online sportsbooks have:

  • Penn National Gaming’s Bartstool subsidiary paid a $250,000 fine for hosting a college football show on the campus of the University of Toledo. During the show, Barstool offered incentives to the audience if they downloaded the Barstool Sportsbook app.
  • DraftKings paid a $350,000 fine for mailing 2,500 promotional offers directly to people under 21. It blamed a database filter that sent gambling offers to people who were fantasy sports customers.

Bernal sees no difference between those violations and TikTok posts in which Paul talks about “real money gaming, cold hard cash” that gamblers can win on the Betr app.

“The gambling commission in Ohio needs to greatly restrict gambling advertising and marketing,” Bernal said. “And they need to go beyond just putting fines out there. They need to take licenses away when people violate this.”

@betr WE ARE GIVING AWAY UP TO $1,000,000! 🤑 Hit 30 straight microbets to win $1M in Ohio + we’re giving away $10k elsewhere by building your longest streak on betr 📈 *ACTIONS IN VIDEO DONE BY PROFESSIONALS, DO NOT TRY AT HOME* Must be 21+ Always gamble responsibly. Gambling problem? Call 1-800-Gambler. T&C’s apply. #jakepaul #microbetting #whowantstobeamillionaire ♬ original sound – Betr

Finding a Betr way
Ohio was the first state to license Betr, a Miami-based startup that raised $50 million last summer to launch a consumer-based version of the Simplebet app that Levy previously launched as a business-to-business platform.

Betr is the latest in a long string of pursuits by Paul, a social media influencer who worked a Disney actor and hip hop artist before turning to professional boxing in 2018. Throughout his 10-year career, he attracted millions of young social media followers with a carpe diem lifestyle typified by his 2017 hit, “It’s Everyday Bro.”

“He’s one of the smartest, if not the smartest content creators and marketing geniuses in the country,” Levy said. “So, having that expertise helped set the tone and helped our media team craft our brand voice and not just develop brand awareness but brand affinity.”

Paul is one of several content creators featured on Betr’s social media channel, which has a following that’s 90% male, 75% white and 67% between the ages of 18 and 29, according to Abby Merz, an influencer marketing associate at Empower.

“Betr is successful because they post engaging content while Draft Kings is more stat/number heavy,” Merz said. “Betr shares funny sports moments and news as well (and) their videos contain commentary on different sports news and opinions on bets to take.”

Levy sees the company as an underdog against the industry’s dominant players like FanDuel and DraftKings, which have a combined market share of 73.9% nationwide, according to US Sports Betting Market Monitor from Eilers & Krejcik Gaming.

“I think we really have an opportunity to be the product, company and brand that offers sports betting as an entertainment product to the recreational sports fan,” Levy said. “By the end of the decade, I think it very much may be the case that Betr is the largest operator in the category.”

While he won’t say how many Ohio customers Betr has attracted, Levy said he is pleased with the company’s performance so far.

“We’ve been blown away by our user engagement retention metrics, our betting handle, revenue,” Levy said. “We crushed all of those projections in January and we’re tracking ahead of pace in February as well.”

Levy credits Betr’s social media strategy with helping it acquire customers for “basically zero dollars.” Bigger companies invested heavily in Ohio, with Super Bowl ads and first-bet bonuses of up to $1,500. Betr launched with no TV and radio ads in Ohio and a $50 signup bonus.

“Our social media strategy has been working,” Levy said. “That’s basically where we’ve acquired all of our customers.”

‘It’s gambling fentanyl’
Betr also differentiates itself from industry titans with its focus on microbetting. It’s a form of in-game betting that allows gamblers to wager on every play in football, every pitch in baseball. Levy calls it “instant gratification betting,” aimed at casual sports fans who see gambling as entertainment.

In an earlier I-Team report on sports-betting addiction, author Natasha Schull said in-game bets are similar to slot machines in their ability to keep gamblers engaged. That’s because the betting action is constant and rewards are randomized, making it harder to stop.

“You’re gambling on many tiny micro-events throughout the game,” Schull said. “This makes it far more continuous. It sort of hooks you in and holds you.”

Most online sports books offer “live play” bets, with odds that change as a game progresses. But Betr is unique in its ability to offer bets on whether the next play will be a run or a pass.

“Bottom of the 7th, the Marlins are down by 7, it could get a little bit boring,” said Levy. “But if I could put $5 here or there on the next pitch or the next at bat, then all of a sudden that baseball game would become a lot more interesting for me.”

And more dangerous for bettors, according to gambling critics like Bernal.

“It’s gambling fentanyl,” Bernal said. “This is a highly addictive experience for people and they’re going to try to keep you in constant action 24 hours a day.”

@betr @Jake Paul is going streaking, too!😱 Hit the 🔗 in bio to join him! Must be 21+ Always gamble responsibly. T’s & C’s apply. #jakepaul #ksi #nfl #football #microbetting ♬ original sound – Betr

Levy said the Betr app allows customers to set limits for themselves, including a default limit of $2,500 in monthly deposits for bettors who are 25 and younger. It also sends an alert to bettors who’ve been active on the app for 15 minutes. It tells them how much they’ve bet and requires them to acknowledge the notice if they want to continue betting.

“We quite literally have no interest in accepting gambling activity from consumers who may be gambling with money that they don’t have,” Levy said. “Sports betting is for entertainment value. It’s not about winning money. The house will always win.”