Sports Betting Innovator Launches New Start-up

Douglas FraserBusiness and economy editor, Scotland


Among Scotland's most effective technology groups is starting again with a new company - and has secured the biggest preliminary investment of any British start-up business.


BetDEX is being led by Nigel Eccles, who co-founded dream sports wagering website FanDuel in 2009 in .


The new firm has seed financing of $21m.


It aims to release a new open source software application platform, on which others can innovate in sports betting, in the very first half of next year.


The business is hiring staff from a base in Scotland.


FanDuel was sold to Flutter - formerly called Paddy Power Betfair - in 2018 and is now worth more than $30bn.


However, Mr Eccles and other co-founders remain in legal dispute with FanDuel's later phase investors over the way in which they structured a takeover, which left the Edinburgh team without a share of the rising evaluation.


Mr Eccles said that one thing he gained from the FanDuel experience was to choose investors thoroughly.


He told BBC Scotland: "We took a great deal of lessons from that, one of which was the importance of who we choose as financiers in this new service, to ensure their values are aligned with ours, that they take their fiduciary tasks responsibly, and that they're the best partners for us."


The $21m seed financing for BetDEX consists of stakes taken by seven backers of US innovation companies, including 2 large funds - Paradigm and FTX - which specialise in buying business running with crypto-currencies.


Varun Sudhakar, president of BetDEX, said: "The sports betting industry charges high rates for poor products and limitations trades by its most effective users.


"BetDEX is diametrically opposed to this method. We will effectively contend against incumbents with a considerably exceptional product and low fees, which is now possible with the development of the blockchain technology."


As chairman of the brand-new firm, Mr Eccles stated it might look familiar to retail punters used to existing online firms.


'Pool of skill'


However, he states that those who use its platform to run their own wagering firms will have the ability to innovate and develop a larger variety of betting products.


He stated the common share taken by online bookmakers is 7% to 10% of a stake, but BetDEX should allow for that to fall listed below 1%.


The company will establish its own wagering apps to run on the platform.


Mr Eccles stated these would take an "smart, thoughtful" approach to the method they are marketed to secure those who deal with issue betting.


He stated the team of around 500 software application engineers who assisted construct FanDuel from Scotland revealed that it stays the location to build a firm. BetDEX has the exact same head of innovation, Stuart Tonner.


"A lot of that [FanDuel] success was constructed on an extremely experienced, very skilled engineering team, that constructed this product that could process millions of bets and millions of users.


"There's a real skill pool of experienced engineers who assisted us develop our product which's what we desire to leverage for BetDEX too."