Crowdfunding as easy as 123
Crowdfunding as easy as 123
A new consumer-facing horseracing platform is hoping to ignite interest among investors via a crowdfunding campaign ahead of a potential launch in the UK and with the backing of UK-listed horseracing pools technology supplier Sportech.
123gaming already operates the 123bet.com horseracing pools business in the US and it is seeking £1m from investors via the Seedrs crowdfunding platform.
Seedrs has been a popular vehicle with gambling-related companies after DiscountIF and Football Index successfully raising money within recent years.
Rob Earle, chief executive, said 123gaming had effectively been crowdfunded privately with friend and family investment and that aiming for a Seedrs campaign was the next logical step. 123gaming raised US$1.5 million through private investors in May 2015 to obtain licences in the US and soft-launch an online wagering site.
“Crowdfunding enables us to market to the public, something we have not been in a position to do until now,” he told TotallyGaming.com. “We have taken not VC money as yet but we believe this profile raising may interest those looking at the gaming industry.”
The money-raising exercise has been kickstarted by Sportech which has pledged a £100,000 investment. Sportech provides the back-end wagering services and technology to 123gaming in the US, where 123gaming is licensed to accept online horse racing wagers from residents in 24 states.
Said Earle: “Sportech has been a great technology partner over the years. Their endorsement of our 123racing product and their distribution of it via their tote platform will allow us to expand into multiple jurisdictions in a very easy and cost effective manner.”
123gaming says its horseracing product is targeted as being complementary to existing UK Tote race-betting products including the Scoop 6 and Placepot.
The jargon-free product is similar to a handicapping contest, pitting players against the market and with national leaderboards displayed on-screen at racetracks, off-track betting shops, betting terminals, online and on mobile. 123gaminfg also generates further revenues by licensing its free-to-play contests to racetracks for use as a marketing tool.
“We started off in the UK with one of the first real-money fantasy gaming/horse racing sites before focusing on the US market. We plan to launch and market the 123racing bet in the UK/Europe through Sportech’s connections and strategic tote partnerships,” said Earle.
The business has achieved a turnover of more than $10m since launch including $4.5m last year. A successful £1 million fundraising for 23% of the company would value 123gaming at £4.3 million. The company says that potential exits include an IPO or continued expansion as part of a larger group.
Totally Gaming says: Crowdfunding is now an established route for companies in the gambling sector seeking funding and Seedrs is clearly the platform of choice. In corporate terms this is Sportech’s first move since the sale of the football pools was confirmed in February. It will be interesting to see what level of enthusiasm the campaign can generate among UK investors.