1on1 with David McDowell, FSB Technology: Into the Black

1on1 with David McDowell, FSB Technology: Into the Black

Tuesday, October 4, 2016
FSB celebrates deal with horserace betting specialists Black Type

Having an appealing horseracing-betting product is one of the keys to staking a claim in the ultra-competitive UK online market so it is notable that FSB Technology have added a new start-up with a horseracing focus to its platform. Black Type comes with some pedigree: founders Dave Gowers and Craig Nicholson played a central role in 888sport’s resurgence while working at Kambi and it has the Sangster name attached via the grandson of renowned owner-breeder Robert Sangster whose grandson Mylo is also involved.

Following the launch, TotallyGaming.com spoke to FSB’s chief executive and founder David McDowell about the challenges of getting focused offering launched in the UK and also about how innovation will impact the sports-betting sector, not just in terms of product but also at a supply level.

TG: Horseracing is one of the hardest forms of online sports-betting platform to get right – why does it cause suppliers issues?

DM: European and Asian platform suppliers often fail to incorporate each-way bets, forecasts, tricasts, best odds guaranteed, and all of the other details needed to make a great racing product. But I’m pleased to say our platform is very robust when it comes to these things. Fewer and fewer are offering a decent bet, the experience players receive isn’t up to scratch, while promotions are often ill-timed or irrelevant. And that’s where Black Type, along with our help, plan to disrupt the status quo.

TG: What benefits do you think the FSB platform brings to Black Type in particular, or to any other FSB customer?

DM: Black Type has the ability to offer completely bespoke pricing within a fully-managed service.  Over the previous eight years, we have watched the industry change, tweaking and adapting our product to ensure it remains ahead of the curve. In doing so, we have gained a lot of experience and expertise. For Black Type, that includes being able to offer a hybrid trading solution that allows its own traders to control certain sports-betting markets while others are run by our team. The two teams, ours and theirs, are working closely together and bouncing off each other. Of course, we are able to offer the exact same platform and level of service to other operators/partners. It must also be remembered that they are not just a horseracing wagering platform; they offer a wide range of other sports markets with plans to roll out a casino in the coming months.

TG: The UK is a crowded market – are you at FSB still hopeful of being able to attract more new start-up offerings or will you be looking at other territories or, indeed, at poaching more from your competitors?

DM: A key factor in achieving success is ensuring the platform and product can go toe-to-toe with the industry power-players. We know our platform can; signing partners such as Black Type just reinforces this stance. And by continuing to invest in our products and services, and banging the drum for innovation, we believe we are the natural home for brands looking to enter the sports-betting market. If established sites are unhappy with the platform and services they are receiving from their current suppliers, we are ready and waiting to welcome them with open arms.

TG: How does FSB view developments within the market such as the OpenBet/NYX deal? How do you see the sector maturing over time?

DM: Regulation and increased taxation are forcing operators to reduce their cost base. It is also driving consolidation across the sector, so deals like NYX Gaming and OpenBet are to be expected. The pace of M&A seems to have eased a little in recent months, but more mega-deals are certainly on the table with 888 clearly prepared to raid its cash reserves for the right target. We see modern technology like ours as a critical component for helping existing operators to remain competitive, as well as helping new entrants to quickly steal market share. M&A is good for the industry, so long as it leads to a more sustainable market and a better experience for players. The sector has changed beyond recognition in the past two years, and will continue to do so in the years ahead.

TG: Do you think it interesting that one of the major customers there has invested money in that deal? Would you consider customer investment in FSB?

DM: It’s very interesting, and a smart move on the part of William Hill. Most of the large bookmakers use the OpenBet platform to some extent, but Hills’ investment should put it in the driving seat to capitalise on OpenBet’s capabilities. What’s more, it should have a greater say in how the platform is developed and managed, which could play into its hands as it looks to strengthen its position against the likes of Paddy Power Betfair and Ladbrokes Coral. But since Sky Bet has also invested, it will be interesting to see how it all shakes out. Is customer investment something that FSB would consider? Not at this stage, but never say never. 

TG: What do you think will be the innovations to come in sports-betting provision? How interested is FSB in eSports betting for instance?

DM: Sports-betting innovation always focuses on product, but it’s just as relevant in the business model. We’ve recently seen massive changes in live-data availability and mobile usage, as well as shifts in regulation. Sportsbook operations have also moved away from manual labour and the monolithic platforms popular during the dotcom era. There’s been technological evolution behind the scenes, with algorithmic trading models, personalised marketing opportunities, and flexibility to adapt to different regulatory requirements all becoming important. It’s really about offering customers an entire industry in a single platform.

At FSB, we now run ten sportsbooks on a platform built at a fraction of the cost some operators have spent trying to do their own. Private cloud solutions are allowing us to host multiple brands efficiently, delivering scale that eclipses legacy platforms, whilst still being compliant with the Gambling Commission. This is where the real innovation in sports betting is happening.

eSports is certainly on our radar, but we see the early opportunities around data rights partnerships and pricing models. There is a lot to be accomplished before the industry can offer these markets effectively, knowing they have integrity and are priced appropriately. It feels like 2006 to me, when court-siders sent live data to operators to drive in-play tennis betting. eSports viewing figures are so high they can’t be ignored, but the real value to an operator is in devising the right marketing plan to attract and convert these customers. 

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