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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
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Good afternoon, ladies and gentlemen. This is Victor Kayat, senior journalist for SBC News. I'm joined today by Varun Sudhakar, who is the CEO of Beddx Labs for an interview on the latest developments going on with his company. Varun, first of all, how are you doing? Lovely to have you here with us. I'm doing well, Victor. How are you?
I'm doing all right. I'm looking forward to our conversation. But before that, as always, we have a message from our sponsor OptiMove. So OptiMove, the number one CRM marketing solution in the iGaming market who whitewashed the competitor. For new companies wanting to hit the six and claim a first three months of OptiMove.
go to www .optimove .com slash SBC to claim said month. The link will also be put in the podcast episode description below. So Varun, again, welcome here. And can you, for those of us who don't know about Beddix Labs and who might be listening in for and hearing that name for the first time, could you give us a brief introduction of the company in your own words? Yeah, sure.
So, Betdex Labs, we're a team of about 15 people. We've been in operation for a little bit over two years. What we have been building is primarily is the Betdex Exchange, which we just officially launched last week. So, the Betdex Exchange is a sports betting exchange built on the blockchain. So, if you're familiar with Betfair, it's quite similar to a betfair. The key difference though in what...
we built with bet decks versus some of the companies such as say bet fair or match book is we've fully open sourced our backend and made it permissionless. And so what that means is that anyone can go, anyone can build their own applications on top of the backend. Anyone can plug into it. Anyone can put liquidity onto it. And so the easiest way to think about this is if you have bet fair, the sports betting exchange, but their API was open and free for everyone to access and.
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and to trade into. So that's what we've built. And so we launched that. We were in beta for about a year and then we officially came out of beta last week. Congratulations on this achievement. Quite a huge one. You mentioned your 15 men strong team. Yes. So I have a few names here, obviously, besides you. There is Nigel Echols, who is the chairman of the company.
and Stuart Toner, who is the chief technology officer at BitDigslabs. All of you, the other thing that you have in common between the three of you, besides working at BitDigslabs, is that you've also had previous roles in Fenduo. And after this venture, you actually came together, the three of you, to establish BitDigslabs. So can you give us a bit of a...
information about what gap did you spot in the sports betting market that made you come together and start Betdex Labs? Yeah, sure. So just to give a quick background on the other individuals. So Nigel is the chairman, as you had mentioned, of Betdex. And so he was one of the founders at FanDuel and the CEO for about nine years. And Stuart, who is the CTO of Betdex and my other co -founder.
He was actually the first engineer that we ever had at FanDuel, which now probably has thousands of engineers, right? Just by way of background. So as you mentioned, yes, we all had worked together at FanDuel and our time had overlapped there quite a bit. And then we think all three of us left FanDuel between the times of somewhere between 2017 to 2019, depending upon which individual you're speaking about. We did a few other things before we came back together to start Betdex.
For us, I think working at FanDuel taught us how massive the industry is. I mean, my estimate is probably there's over $2 trillion that is traded per year. And growing as well. And growing, right? It's one of the few recession -proof industries, shall I say, right? And so we saw how big it is, but we also saw how poor the user experience is, right? So I think you see...
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this in a variety of ways, but like high fees are quite standard in sports betting. You know, like especially if you play with the recreational book, like you can pay anywhere, five percent, 10 percent, 15 percent big. Sometimes it can even get up to 40, 50 percent if you're betting on an accumulators. And that is really high. You know, compared to that, like payment processing fees are two percent. I think like when you buy a stock, it's basically free. Right. So.
There's no reason for a market that big that fees should be that high. Counter -party risk was another thing that we saw, not necessarily at FanDuel, but when we were starting to look at the market, you look at especially some of the international markets where it's sometimes it's hard to get your money out of the platform. Sometimes a platform just disappears with your money, especially markets such as jurisdictions such as Asia. So that was another thing. We also saw, you know, winners.
being quite discriminated against. So if you are someone who is winning better, quite often you will get, and I'm sure you've heard this with some other hosts or individuals you probably brought on board your podcast, you will get stake limited or in the case of an exchange, you can get premium charge. And so we saw all these problems, but the key underlying, in my mind, like the key underlying root cause of all of this is actually the liquidity fragmentation in sports betting. So even though it's such a
big massive popular market, the liquidity is fragmented. So what do I mean by this? Let's say you go and you bet, you try to go and buy a share of Apple, whether you use either Revolut or eToro or Robinhood or Bank of America, the price of Apple is gonna be the same to the consumer, right? Like with very few exceptions. If you go and you go and you go and try to place a bet on the Mavs -Basswell game,
the price that you get for the maps, let's say you're backing the maps, could be quite different depending upon the book you're using. And so that's the key problem that we wanted to solve. And so that's why we started Beth .dex. Good. A lot of problems to address. I'm sure you're keeping quite busy. Yes, yes, we are. So.
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One of your essential offerings is dealing with cryptocurrencies. So let's get a bit into that. That's a very relevant topic. It's been going on for quite a few years now, especially after the crash, after the fall, I should say, of FTX, the crypto exchange.
FTX actually, BitDix Labs and FTX have something in common as well. FTX, to my knowledge, was a financial contributor to the BitDix idea. So can you talk us through how did the company manage to rebound from the collapse of the crypto exchange? Yeah, so I think it's important that as you mentioned, FTX was an investor in our seed round.
There are a number of other investors as well. So Paradigm was actually the lead investor, multi -coin capital, light speed, ventures, et cetera. So they were one of many investors in the round. The collapse of like FTX collapsing directly, like the fall of FTX, if you will, actually did not affect us at all from a business operations perspective. It's because one FTX is a passive investor. They don't have any controllers in terms of the company.
But two, if you look at bettex and the way that we operate, the way the company and the product operates, all our trades are occurring in USDC, which is a stable coin. So we weren't having the price of the crypto going down and going up actually did an impact the product directly because the price of what you're betting in is still the same. I think what did have an impact is probably just more the general crypto market.
you know, probably taking a beating after FTX and then obviously recently rebounding. So that has, I would say has had an impact, but it's had an impact for every company who's in the Web3 space. And the market in general. Yes. All right. Speaking of the crypto market, since that FTX for have you seen any developments in the crypto market that you consider particularly beneficial for crypto betting?
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Or is there anything that you think could potentially hinder the space? Yeah, I think what we've seen from more of a regulation perspective is internationally, countries and jurisdictions seem to be much more open to crypto, especially in places such as Asia. We see serious legislation being put forward, which puts together very good frameworks for
entrepreneurs and individuals and founders who want to start crypto companies and issue tokens and things of that nature. The regulations there are well thought out. I think what we've seen, unfortunately, in the West is that's probably not the case. I think it's been quite nonsensical in nature to be perfectly transparent with the US to how the regulations are. And in some ways I've seen, unfortunately, it's been pushing a lot of entrepreneurs to be asked out of the.
out of jurisdictions such as the US or to focus your operations only on international jurisdictions if they are a crypto founder. We're starting to see that change a bit given that it's an election year, but I would say over the last few years, it's been quite an antagonistic environment for crypto, at least in the US. Specifically with crypto betting, I think the one area where we have started to see promise kind of globally is around the payment side of things.
Crypto is clearly, whether the government's like it or not, it's becoming a force and it's becoming a vehicle and a mechanism that and an asset that individuals hold. And people and one of the key benefits, I think of crypto is on the payment side, especially for high risk industries such as gambling. And so we are starting to see a lot more payment providers, like traditional payment providers, such as like the pay safes of the world.
are starting to accept crypto and put in place the right framework in order to do that. You're starting to see operators, like even the tangible draftings of the world, the US, the international, et cetera, people are starting to use crypto and accept crypto payments. So specifically as it relates to the gambling industry, I think that's a positive achievement and something that will continue to grow going forward. Yeah, nicely put, I should say. But...
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There is, I feel like we've talked about the crypto crash. I feel like there's still kind of a lingering worry in crypto users about the volatility of the cryptocurrencies. So when you're in the gambling industry,
What is the key to improving customer trust for crypto betting firms like yourselves? Yeah, I think it's twofold, right? So I think one is if you are going to... So one, you can go one route that we've done, right? Which is all trades occur in just a stable coin, no matter what you deposit in. So if you deposit in Bitcoin, deposit in ETH, you deposit in Solve, you deposit in Doge, we will convert that
on the backend and fund your account with the USDC. And that's what you bet with. And we chose to do that specifically because of the volatility that you just mentioned. We wanted to extract, we have enough uncertainties, we want to extract that uncertainty away from our users. There are a number of other crypto companies though that will accept, like say Bitcoin or ETH and allow you to bet in just in that, which are typically more volatile currencies. I think if you are doing that, I think,
There's 100 % of path forward for that. But just be very clear on the communications that, hey, you're betting with, not only do you have to worry about, you know, like not only do you have to worry about the, whether the bet goes your way or not. If it does, like the currency, the price may change, right? So I think that that is very important. And so, and I've seen a lot of companies have done good jobs with this. Like if you look at the user interface, the designs,
It'll make it very clear, hey, you're betting in Bitcoin. If you want to bet in ETH, you know, like switch to ETH, like there is good signposting there. But I think that that is crucial to do. And I understand why companies do it because you want to ensure that you're giving the least friction as possible to the user to get them on board, right? So if someone has...
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Bitcoin, you don't want to force them to necessarily convert into ETH or whatever it might be. You want to just accept what they have and allow them to bet with that. Yeah, option. And the end of the day, it boils down to having options. But having options isn't always the safest way going forward. All right. Moving on to the licensing of Bitdix Labs, you shared.
some exciting news with me before we started the podcast that you've gained a new license. Can you tell us a bit where that is and what advantages does it give you? Yes, of course. So we have gained a license with Andruan. Andruan is an island in the Indian Ocean, part of the Camaro Islands. You can think of it similar to some other licenses we had where it's a global license. So this allows us to operate a number of different.
international jurisdictions worldwide. And so that was a license that we got, I think it's been maybe a month and a half now. And so we hold that license along with our Irish gambling license. And what about the UK? Do we have any prospects for the UK market? Yeah, we, I think the UK market is one of the, it's one of the key markets for us as a company in terms of growing.
We really want to get a UK GC license. It's something we've been in conversations about at a high level for a while. I think that process just takes a while, especially as a crypto betting startup in the UK. But it is one that we want to get and we would love to be operational in the UK in the near term. Yeah, that's good news. But...
I can only say get in line. Yeah, because there's a lot of it can take some time. It can take some time. But it's obviously a key markets for reasons that are obvious. All right. Moving on to your commercial strategy. I've noticed that there is a recurring theme with your company.
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You always have your major launches with global sporting events. For example, the Beddix Labs, I think came out of beta in time for the World Cup 2022. Beddix Exchange and its tennis markets offering coincided with the start of French Open in 2023. And
Also, you expanded to offer cricket matches in time for the Indian Premier League as well in 2023. So in what way has this strategic commercial roadmap helped BEDX Lab so far? And yeah, can you talk a bit about that? Yeah, I think it's a twofold answer. I think one, being a startup in a company,
going up against incumbents with millions of dollars in their advertising budget, we will try to take advantage wherever we can. And one way in terms of putting yourself on the map, getting noticed and having your other individuals and users, potential users know who you are, is doing things around major sporting events. I don't wanna call it free PR, but it's an accelerant if you will. And it helps to get our name out there.
So we do actually quite intentionally choose to do major as some call it like some major announcements around major sporting events, just to help and try to get our name out there and increase our brand awareness. Second thing I think is actually internally as a company as well and as a team, we use sporting events as internal milestones too, not just the big ones, but even smaller ones, et cetera. So it's just a great way to organize ourselves.
and organizing principles to use that as an internal milestone to ensure that development is on track and everything like that. And with the upcoming Euros and Paris Olympics this summer, is my gut feeling justified that 2024 will be a big year for Beddix Labs? Yes, it is. Absolutely. I mean, we just came out of beta, as I mentioned last week. The product is in a...
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Good place now where we are able to also accept even though all the trades still occur in USDC and unstable coin, one thing that we've made a big effort to doing is trying to abstract away the blockchain. So we're allowing users to deposit with fiat or with other crypto that they have on hand. We've abstracted away the concept of things like gas fees and things like that. So this is going to be, it's like go time for us.
This is going to be our growth year. I would say this year as well as 2025 is really going about going to be about going out telling people about who we are, what the unique benefits that we offer are. And really going out there, increasing our brand awareness and going and getting users. Right. So there you go for overview sports betting listeners out there that want alternative to bet with crypto rather than fiat. Go check BitDex Labs.
Varun, thank you for being here. It was really nice talking to you. And yeah, any final words for the audience? No, thank you for having me, Victor. It's been a pleasure. I think for the audience, if you are someone who is a price sensitive bettor and you're someone who doesn't want to bet with an operator where winners are truly welcome, please come and check out MetTex and find us at www .MetTex .com.
If you're free to shoot us Twitter DMs as well, if you have any questions, it's probably easiest way to get in touch. Handle is at bettexlabs for the company and my personal handle is Svarun91. So just feel free to reach out. Thank you for this information. All right mate, have a good one. You too. Thank you, Victor.