CEO Spotlight Series: Exclusive Interview With Justin Park, the Co-Founder and CEO of Betty

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Justin, thanks for joining us for the January 2024 version of our C-Suite Confidential series. Tell us about Betty and how you are developing this new online casino brand for regulated and unregulated gaming markets.

Our perspective is that the online gambling market in North America is set to experience a fragmentation similar to what we’ve seen in many other consumer markets. Initially, large, dominant players will enter the market, followed by the emergence of specialized, niche companies. Eventually, these smaller entities are likely to be reabsorbed into the bigger organizations.

Online dating is a great example of this. When Match.com launched in 1995, it was the first of its kind, but smaller entities offering niche services, like Christian Mingle and Tinder, began to emerge. These companies were later acquired by online dating conglomerates; Christian Mingle became a part of Spark Networks, and Tinder was integrated into the Match Group.

Since the legalization of online sports betting in New Jersey in 2018, major brands, such as FanDuel, DraftKings, and BetMGM, have gained significant value. These companies are highly successful and cater to a diverse customer base by offering a wide range of services, including sports betting, casino games, poker, and horse racing.

The online gambling industry is now ripe for the emergence of specialized platforms. Similar to Christian Mingle and Tinder, Betty is at the forefront of this shift. By identifying and focusing on an underserved market—female slot players, who account for nearly half of the online casino’s total addressable market—Betty is strategically positioned to build a billion-dollar brand specifically tailored to this demographic.

What does the roadmap for Betty look like for 2024? I’m sure you have a lot of exciting plans ahead; will we see you launch in any U.S. states near-term?

For context, Betty was granted an operator license by the Alcohol and Gaming Commission of Ontario in January 2023, and the first wager was taken the following month.

We ended 2023 on a nearly eight-figure net revenue run rate, and our return on ad spend, on a gross profit basis, is less than 60 days. All that is to say, we are going to invest against our extremely favorable unit economics.

We have also decided to focus on the Canadian market because Betty is resonating so strongly with the audience, the TAM is large, and the market is fragmented and ripe for consolidation. Finally, operators focusing on a single market and achieving significant market share have commanded higher multiples.

There are a number of things that Betty does well with its mobile online casino product, including “leveling up,” where you get players to try and build status—almost like my own personal experience using Duolingo as a power user—as well as providing customization to offer slot games to players that resonate, whereas many online apps still really don’t provide a tailored experience. Are there some proof points to share that demonstrate this is working in your performance versus the competition? What does the online casino experience look like over the next few years, particularly in a commoditized marketplace?

There are two aspects of Betty that make it female-friendly despite branding that suggests otherwise. First, Betty only offers slots because women typically don’t play anything else. Second, Betty has integrated metagame and LiveOps mechanics inspired by free-to-play mobile games like Candy Crush, which are primarily enjoyed by women.

A metagame can be broadly defined as a “game beyond the game.” It’s a mix of gamification features that can create additional mid- and long-term goals to engage players beyond the core gameplay loop.

Leaderboards are one example of a metagame feature.

LiveOps, short for live operations, refers to any changes, updates, or improvements made to a game without having to release a brand-new version of that game. Adding new content and upselling plates with sales/promotions are two examples. Delivering time-bounded events, many of which leverage the metagame itself, is also a cornerstone of LiveOps.

An instance of LiveOps leveraging the metagame is a happy hour event, granting players double points for a two-hour duration, enabling them to ascend the leaderboard more rapidly.

In short, the strategy is working.

The table below shows the percentage of users that remained active one month later. For example, we acquired 1,001 new players in November; of those, 543, or 54%, returned in December and placed a real-money bet.

Given that you have limited resources and are operating in a competitive market like Ontario currently, how have you gone about acquiring customers and keeping these costs relatively low? Are there any key metrics around CAC and/or retention you can share?

My co-founders and I previously built an affiliate business for the U.S. sports betting market and bring a wealth of knowledge in performance marketing.

What I can share is that our CAC is very low and is done 100% in-house without any affiliate traffic.

I don’t want to spend too much time on BetQL, but that was your first startup that was eventually sold in late 2020 to what is now Audacy, a media company, for $32 million. In some respect, you might have sold too early at the time, although as sector valuations eventually correct, perhaps your timing was good. What would your advice be to first-time founders around when it is, or maybe isn’t, the right time to exit?

The outcome was quite positive for employees and investors. In hindsight, we could have probably sold for more had we waited another 6–12 months, but we definitely made the right decision at the time.

My advice for first-time founders is to spend 100% of your time building a really good product and business. The rest will follow.

You have gone about developing Betty as iGaming first versus using sportsbook as a trojan horse to enter markets as many of the majors, such as DraftKings, FanDuel, and BetMGM, have done. Would you ever enter the sports betting market, or do you see being a single-lane platform as more advantageous?

As I expressed earlier, the market is going to reward businesses that focus on specific customer personas and specific markets. Betty is doing both and will continue to do so.

I remember grabbing lunch with you in late 2022, and you pulled out a screenshot for this idea that you had at least five years earlier while you were running your last startup, BetQL; what was the genesis for the idea that sparked Betty? To that end, what’s the next idea that you are potentially ruminating on?

Betty was initially born out of two truths. The first is that we wanted to build something that could become really big, and the second is that we knew iCasino is the backbone of online gambling, and no one was looking at it for North America. From there, we interviewed more than 250 players and figured out that women are underserved.

Betty has raised $7 million to date to get its initial operations, principally in Ontario, up and running; what does the current fundraising environment look like right now? Has it been easier for you to fundraise, given that you have had a successful exit before and now have a lot of institutional or HNW investors? How are you thinking about timing and scale for your next significant capital raise?

Fundraising in the online gambling space is easier now relative to 2015 when I started BetQL because there are way more investors looking at the space. That said, the overall macro environment has put a damper on things. Having a proven track record definitely helps.

We are in the process of closing a Seed 2, which will give us plenty of capital for growth. We may look to raise a Series A in Q3 to supercharge things even more. We will also be generating materials revenue then, so there is a real possibility that we will self-fund.

Finally, Justin, if you don’t mind, please tell us a little more about you and what you are up to when not working on Betty or brainstorming the next great idea. What are some of your hobbies and personal interests?

I try to spend as much time with my two-and-a-half-year-old daughter, Violet, who is actually a really funny person. I also pretend to play tennis.

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