It doesn’t take a Google search to discover Paul Martino’s roots or a deep dive on social media to find out where his loyalties lie.
Just ask what his favorite team is.
“The Philadelphia Eagles and whoever is playing the Dallas Cowboys.”
The Doylestown, PA-based founder of Bullpen Capital relates to the passion of Philadelphia sports fans. But perhaps even more fiery than his fandom is his foresight, knowledge of the gaming vertical, and “first one in the pool” mentality.
As FanDuel’s first US investor, Martino has lofty expectations for sports betting in Pennsylvania. In the next few years, he expects Pennsylvania and New Jersey to compete for the highest monthly sports betting handle. Of course keeping an eye toward what’s next, Martino is an investor in Bankroll, which is being billed as “the sports betting parlor of the future.”
MARTINO’S EASIEST “YES” WENT TO FANDUEL
Martino earned his BS in Mathematics from Lehigh University in Bethlehem, PA. He then got his Masters in Computer Science from Princeton University.
Martino is the founder of four companies and his early online gaming innovations in multi-player user experience from almost 20 years ago are the inspiration for several of the modern social gaming offerings. Also, he is the holder of over a dozen core patents covering social networking and big data.
Before forming Bullpen Capital in 2010, he was an active angel investor and personally invested in the first rounds of Zynga, TubeMogul, and uDemy. Bullpen Capital’s key investments include Ipsy, SpotHero, Classy, and FanDuel.
Martino, who plays poker and bets on sports, was intrigued by the then DFS-only company. At the time, it was making about $1 million a year with only 10,000 users.
“In the early days of apps in 2011, 2012 if you were making $10k you were doing good,” Martino explained.
He talked to FanDuel’s founder Nigel Eccles who said they were turned down by about seventy other venture funds. Those investors were turned off by the idea of a husband-wife team from Scotland who didn’t know much about American sports. And, since it was pre-PAPSA, possible investors were worried about regulatory approvals.
“This was the easiest investment I will ever make in my life. I looked at his numbers and his business was on fire. I haven’t had a deal that easy since then. It was the easiest deal I ever had to say yes to.”
FANDUEL IS TOPS IN PA
2020 marked the only month they did not finish tops in revenue as DraftKings slightly edged them with $1.9 million compared to FanDuel’s $1.4 million.
Since launching in PA, FanDuel has taken $1.1 billion in bets and generated about $50 million in revenue.
In August 2020, FanDuel took 45% of all bets in PA. The much-anticipated Barstool Sportsbook app recently entered the PA market bringing the total number of sportsbooks to ten. Does Martino expect FanDuel to hold the large market share (40-50%) of the sports betting action going forward?
“It would be remarkable for the company to hold market share of that size in the state. What’s amazing to me is out of the gate, FanDuel and DraftKings’ combined share in the state is as high as it is. With Penn National buying Barstool, William Hill making a concerted effort, and the local casinos like Parx, I would be surprised if it could hold that market share. But as an early investor, I’m thrilled it got out to such a strong lead.
INNOVATION IN SPORTS BETTING
Since the US Supreme Court overturned PAPSA in 2018, Martino mentioned in various articles that he was frustrated by the lack of innovation in sports betting.
“It was all derivative.”
However, he noticed a shift in early 2020. He started to see some fantasy/betting formats and products directed at under-represented demographics like African-Americans and female users.
“The stuff I thought I was going to see in 2018 is now being pitched to us. They are really innovating new game formats and I think we are finally going to make a couple investments after sitting out for a few years because it was all copycat stuff.”
Why the delay?
Martino says that after PAPSA, the next few years were about setting up brick-and-mortar and apps.
“In that mad dash, all innovation was lost. It was about who could get to market first, who could copy what European operators were doing as fast as possible. It just seemed like it was a natural cycle. You had a year or two where everyone gets to parity and once that happened, you could start thinking about what’s next.”
BANKROLL ANSWERS “WHAT’S NEXT” FOR SPORTS BETTING
So, what’s next?
For an entrepreneur like Martino, that’s not just a question, but a bet, a mission statement and a challenge.
In late August, it was announced that Martino was part of a group of investors looking to raise $8 million to build Bankroll, a 24,000 sq.ft. sport betting parlor/restaurant in Center City Philadelphia.
“This is going to be the next innovation in sports betting,” Martino told Sportico. “Now that the operators are up and running, we’re thinking: What can we do next?”
Marc Rayfield, one of Martino’s partners and a former CBS Radio New York and Philadelphia Market Manager, told the Philadelphia Business Journal, “We want to make Philadelphia the sports betting capital of the U.S.”
On his LinkedIn, Rayfield posted:
“Bankroll is a first of its kind tech based sports betting venture that we hope to scale across the US. I am fortunate to work with a super smart group of partners who are committed to creating a unique and amazing customer experience for sports bettors and non gamblers alike. We think of it more or less as ‘Apple meets the Sports Book!’”
This article is a reprint from PlayPennsylvania.com. To view the original story and comment, click here.