CEO Spotlight Series: Exclusive Interview With Stephen A. Murphy Co-Founder and CEO of Boom Entertainment

Steve, tell us about your background in gaming and how that led to the genesis of Boom Entertainment. How has your time in gaming, particularly content development (at well-respected studios like High 5 Games), influenced the evolution of the company? How have you raised capital, built your team, and developed a multi-platform enterprise?

I had been in the sports and gaming industries for about seven years before co-founding Boom.

I started my career in journalism—first as a sports editor of a couple small-town newspapers in the Midwest, and then as the managing editor of a gambling and poker trade magazine and website in Las Vegas. I had my fill of journalism, so I joined the business side of the casino gaming industry in 2010 when I took a role at High 5 Games.

That was easily the best career decision I ever made. I was able to get a front-row seat to see how truly great products were made (High 5 Games created some of the very best slot machine games on the planet, and a top-10 grossing Facebook app while I was there), and I was able to learn from some really smart executives and creative professionals.

I left High 5 Games to get my MBA at Stanford, but I was at the company when it grew from a less than 30-employee company to more than 200 employees, and it gave me confidence that I could help scale a business if I were ever fortunate enough to be in that position.

Fast forward a couple of years, and legalized sports gaming in the U.S. was just starting to take off (first through daily fantasy sports), and I was able to combine my love of sports and my experience in casino gaming to launch a company in this space.

I think every founder, when she or he starts a company, is influenced by their past stints as an employee of various companies. There are things they want to emulate, and there are things they want to do differently. So, my previous experiences certainly influenced Boom quite a bit.

I worked at a few companies before starting Boom, and they had various levels of ambition. Some were content to eke out a small profit, and call it a day by 5:00 p.m. Maybe it’s because I’m the youngest sibling of very competitive and athletic older brothers, but I knew I wanted to compete, and I knew I wanted to win big when we started Boom. I didn’t want to create a small company. I wanted to create a massive company. I didn’t want to have a little success. I wanted to have a lot of success. I’ve made a lot of mistakes along the way, but that drive and that ambition continue to fuel me and the business. That’s why we’ve chosen to raise capital ($30 million and counting) and have been relentless at recruiting some of the very best talents in the industry to Boom (and making them shareholders so that they benefit from the future we will create together). It’s why we haven’t shied from expanding into new markets, from B2C daily fantasy sports to B2B sports products, to more recently, B2B casino products. We are obsessed with creating a large and valuable business that will thrill and entertain sports fans and casino players.

The company operates in a number of verticals, including fantasy sports, real-money iGaming content, free-to-play predictions games, and other segments; can you tell us where you see the most opportunity for growth or where you are focusing your resources over the next couple of years?

When PASPA was overturned, a lot of startups rushed to the real-money sidelines to try to see if they could win a piece of this new market. We strategically started by focusing on the free-to-play market first. We knew it would take time for states to open up, and for operators to prioritize their own initiatives. We also knew customer acquisition was key. And we succeeded by establishing ourselves as one of the very best B2B providers of free-to-play gaming platforms and games. Five million people have played our games, and we’ve worked with NBC Sports, the New York Yankees media company, Tim Hortons, Golf.com, and many others.

We have learned so much on how to create great, engaging products for the U.S. market. And now, we’re focusing the majority of our attention and focus on continuing to grow in the real-money space. 2023 will be the first year our real-money revenue outpaces our free-to-play revenue, thanks to the overwhelming early success of our new daily fantasy sports product and our first few casino games. And we’ve been fortunate to sign some of the very best operators on the planet, which means we will have the distribution to continue to grow.

But I believe Boom really differentiates itself because it does offer that full continuum of gaming. We offer both free-to-play products and real-money products. We offer both sports products and casino products. We incorporate loyalty programs, high-definition live streaming, and community features.

And that’s important because gaming is changing. It’s merging and it’s evolving. Our sports games incorporate slot machine lessons. Our slot machine games involve sports gameplay. Our free-to-play games have an easy way to transition into real-money. More and more companies are going to get involved in gaming (Starbucks and McDonald’s have done this nicely in recent years), and we will be the go-to partner for big brands who want access to gaming expertise, capabilities, and innovation.

Many of your competitors in each of the verticals you operate in are typically focused on trying to be good at onething versus a bit of a jack-of-all-trades approach for Boom, is this a strength or challenge for you, and can you be successful across the board in so many businesses?

It’s a fantastic question. And of course, it can be challenging. Time and focus are both finite things. It is very, very hard to do multiple things excellently. And yet, some companies are able to do it. How? Why? I believe the answer starts and ends with talent. If you get truly exceptional individuals and you empower them, you can do a lot.

We are growing incredibly on the daily fantasy sports side right now. We have Gary Bogdanski, our SVP of Sports, leading the charge there with an incredible team. We have already launched a top-10 casino game for RSI in Michigan. That’s because of Phil Welty (GM of Casino Content) and Joe Masci (VP of Creative) and their all-star cast of team members.

The reality is that we do our best to create areas of focus for each individual and each team so that they can become obsessed with the products they are working on because obsession over the details of a product often leads to great results. We do have a very small number of team members, including myself, that provide input on multiple product lines, but that’s the exception rather than the rule. And I think this is what has allowed us to stay focused on what we need to accomplish and execute well.

In fall 2022, you re-launched Boom Fantasy going head-to-head with peers like PrizePicks, Underdog, and Sleeper; how is this tracking, and how are you differentiating from the competition? I have taken a view that fantasy sports products are likely to remain a very relevant and large category for many years to come as consumers (particularly younger 21–30-year-old players) have embraced them versus more seasoned bettors; what do you see as the outlook for this segment and evolution to come?

Boom Fantasy has been an incredible success. I think very highly of all those companies you mentioned. I’ve had the opportunity to get to know their founders and some of their team members, and they’ve all really done an amazing job contributing to the evolution and the innovation behind fantasy sports. So, when we decided to get involved in this market, we knew we would be putting up a product alongside some very impressive companies.

And yet, we knew what we would bring to the table too—a team that has been involved in the space since 2015, and an amazing product track record. And we’ve been delighted by the early results. In some ways, our product is still in its MVP (minimum viable product) form, but it is already generating significant revenue with a growing user base, and we have innovated with a number of unique game formats that have never before been seen in the industry.

I agree—real-money fantasy sports are not going away. It’s amazing how much history repeats itself. You’re seeing the same arguments against DFS today that you saw in 2016 (regulatory objections from the Twitterverse, questioning if the industry has legs post-sports betting), but the data and the market do not support this skepticism. This industry is growing, and even in markets where there is sports betting and legalized casino gaming, it continues to do very well. We expect this market to continue to heat up in the coming years.

One important thing to note about Boom Fantasy versus the other companies you mentioned—we are a B2B company. So yes, we launched a product under our Boom brand, but it is primarily our testbed of innovation. We innovate on our dime so we can bring proven products to partners. We are offering this same technology and gameplay to clients who want to get involved in the DFS space, and we’ve already signed multiple partners for this product line (with more on the way).

Two leading operators, including DraftKings and Rush Street Interactive, are shareholders in the company. Walk us through the relationship with these groups, and does this give them some exclusivity in trialing some of your gameplay and other game innovations? As a follow-up, you have agreements with BetMGM and Fanatics to roll out some of your real-money iGaming content, how is this tracking, and what can we expect as this relationship continues to scale?

DraftKings and Rush Street Interactive are both fantastic companies, and we are grateful to have them as shareholders. They are investors, but they are also clients. We deliver our games through our remote gaming server to their casinos. As part of our agreements with each, we do provide each of them with a few exclusive titles, but we are still able to work with every operator as we grow our business.

We’ve been thrilled to recently add BetMGM and Fanatics as clients. Obviously, their reputations speak for themselves. We are looking to be live on Fanatics by the end of the year, and BetMGM shortly thereafter.

I have often said that the U.S. iGaming industry needs to deliver some real content innovation to attract new players beyond the core slot product out there that hasn’t shown much real chance over the years. To their credit, the DraftKings Rocket game has become a phenomenon and is a real point of differentiation. You recently launched your first hit slot game, Lucky Money Tree, which really doesn’t look like a slot game and is posting some big numbers in Michigan; can you tell us more about this game andwhy it’s performing so well? What does the rollout plan look like for Lucky Money Tree, and is there a pipeline of other games that follow this play mechanic?

We’ve been very excited by the debut of Lucky Money Tree. It’s exactly the kind of game that I would’ve envisioned Boom building—simple, elegant, beautiful, and different. Instead of spinning reels, you shake or zap a tree, and money falls out or appears. This was a top-10 game for Rush Street in Michigan, and I expect it to see similar success for other partners as we take it to all iGaming states quite soon.

This is the first of several games that are part of our “Tap Tap Win” portfolio. We do think the casino game landscape will evolve rapidly over the next few years, and we are excited to be at the frontier of this transformation.

Boom has been a very successful fundraiser, having taken in more than $32 million to date. Where are you in your fundraising journey, and what are the next steps for the company as it looks to execute its growth roadmap for the next couple of years? How are you navigating the current venture capital funding market, and do you have any words of wisdom for emerging companies in the sector that are at the seed or Series A stage?

Boom achieved its first profitable year in 2020. We have since taken additional investment and re-invested it into the company, but it’s always been important to us that we keep both growth and unit economics top of mind at all times.

It’s that mentality that has allowed us to fundraise, and I believe sets us up well (even in this environment) to continue to fundraise should we choose to do so. We’ll likely raise a bit more as we achieve profitability again, and then we’ll evaluate capital opportunities strategically. As mentioned, we’re trying to build something really big here, and capital can accelerate businesses. But we will put ourselves in a position where we don’t need to constantly fundraise either.

As for advice for emerging companies—focus on what matters. That’s usually product market fit or your unit economics. It’s not the headlines; it’s not top-line revenue growth; it’s not winning awards. I’ve seen a lot of companies get great TechCrunch reviews and win lots of awards before going out of business. If you are building a truly impressive business, you’ll know it and you’ll be able to convince investors of it. It won’t happen overnight, but great things usually take time.