Todd Ballard and Joe Dunnigan set out to start an alternative sportsbook. They were assured it was an extremely bad idea.
So they found an alternative to their extreme aspirations.
Ballard, who spent nine years at GoPro, finishing as chief marketing officer, and Dunnigan, a former director of global brand strategy and marketing there with a previous stop in pari-mutuels, have pivoted from actually making betting markets on nichey endeavors such as motorsports and surfing to mining the data needed to create them. Then they sell it to sportsbooks.
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About one year in for the Carlsbad, California, start-up called ALT Sports Data, DraftKings is the lone outlet using its services. But Ballard anticipates more partners will come soon, and he loves how daily fantasy sports provides another avenue.
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It would help if California, Florida, and Texas — where many of ALT’s data points originate, and where fans and would-be bettors live — legalized sports betting. But Ballard doesn’t see the recent defeat of Prop 27 as very impactful to his company’s growth.
California Casinos chatted with Ballard about finding a niche and a means to capitalize on it.
What’s ALT Sports Data’s Big Idea?
BALLARD: Joe posed the question he started in horse racing: ‘I don’t understand why we can’t bet on these sports A.) that we built our career on and B.) that we know have massive communities behind them and are very passionate about them and highly risk-averse by nature. And there’s not a lot of products for them to bet on based off their passions.’
So we went out to find out, why hasn’t it been done? And we were fortunate to connect through Joe’s previous life in gaming to, I’d say, titans of the industry like Joe Asher and Benji Cherniak and Kip Levin and others that.
We went to them to do some due diligence and say, ‘Hey, is there something here?’ And we kind of went down the road first of, ‘Hey, we want to create a sportsbook for extreme and action sports.’ And they said, “Nope, don’t do that,’ which is probably the best advice we’ve gotten to date.
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But they said what you could have which is unique, is access to data. And if you have relationships with the leagues and you have the ability to provide data to the sportsbooks, they’re obviously looking for ways to diversify and attract new customers.
So we thought about it kind of in reverse order. I kind of went through the internal dialogue of, OK, if an operator came to me as a marketer and posed the question of, ‘If we need to attract the younger audience, we want to diversify, create more lifetime value, how would you do it?’
Well, my first answer would be like, let’s give them a product that they care about, because not everybody might not be interested in the big five or big six sports. So let’s give them a gateway that they’re very interested and very passionate about and once they’re in, then they’ll bet on other things.
Gathering Data From Alternative and Action Sports
BALLARD: So we set out to build relationships with the leagues. We knew really what were the premier leagues across a lot of action and alternative sports. And we’re still going through the process of doing exclusive global deals with some of the world’s biggest action and alternative sports properties. We have an internal trading team, proprietary simulation models, and provide a fully managed trading service to operators.
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And then next to that, we also help drive demand. So we knew that if you just put a sport up on an operator next to all the popular sports, it’s just going to sit there and there’s not going to be any handle. So how do we as marketers put our money where our mouth is and shake the trees of the communities around them and help educate and drive them to the operators?
This has really been a unique selling proposition for us, where we’re not just giving you the data, but we’re also helping drive the consumers that are passionate about that sport to the sportsbook and on that side have the ability to create some affiliate revenue.
What Sports Does ALT Specialize in for Sports Betting?
BALLARD: Our initial offering of portfolio sports includes four-wheel motorsports like Nitro Rallycross and Formula Drift; two-wheel motorsports, Supercross, motocross; surfing with the World Surf League; skateboarding with Street League.
We even did a deal with Major Arena Soccer League, which is kind of this underrepresented entity within the world of soccer that has a lot of history behind it. And they’re really putting a lot of new energy into the sport and gives us a lot of volume because there’s hundreds of games happening, and it’s a fast-paced soccer game where scores are in the 10-to-12 range and not the 1-to-3 range.
We seem to have uncovered a gap in the market where (Sportradar) and Genius (Sport) are obviously top of their game and biggest in the industry, but are also very busy trying to keep up with the investments they’ve made in major sports. And it creates this opportunity for these underrepresented sports for us to help them in the market.
We have a pipeline of a couple dozen sports that we’re kind of in conversations with and kind of putting out feelers to decide who we prioritize and when based off popularity and/or volume and other kinds of elements that are important to operators.
How ALT Acquires Data That Sportsbooks Turn into Bets
BALLARD: Initially we used a team to scrape publicly available data, and then as we onboard leagues, those deals give us access not only to their historical data, but also live feeds into their data. So most of the sports we work with, we have an API integration with that give us live scoring, which obviously helps with integrity and latency and everything else.
So the partnerships do include accessibility. With some of the sports we were proactive on, we kind of got ahead of the game and went out and started doing scraping ourselves, but moving forward, it’s all in partnership with the leagues themselves.
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Thoughts on Prop 27 Defeat as a California Sports Betting Start-Up
BALLARD: I’d say obviously a lot of the Sun Belt states are our hotbeds for the sports we’re focusing on. When we built our business plan, we really didn’t build it with California in mind. California would obviously be a big upside to that. But it really didn’t affect what our initial projections were for this business.
I think fortunately, with the growth of the DFS phase, it gives us an opportunity to leverage these sports with an audience in a unique way until we get legal (sports betting) here in California.
I think it’s obviously just a matter of time.
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But through a lot of the insights we’ve done, there’s still three-quarters of the audiences within these sports that are outside of the typical sports that you would expect (are in) Texas and California and Florida, where obviously it’s not legal. But there still are some massive global communities and because a lot of these sports are aspirational in nature and it’s why a lot of the culture and lifestyle that was derived from these sports has made its way into Middle America and other parts of the world.
So California will be a huge upswing for us, but definitely, we’re not dependent on it to be successful.