Dennis Tsalikis doesn’t hold back when describing the challenges of running his own fantasy sports betting vertical.
“When you’ve built your own start-up company, every year is difficult. Every month is difficult,” he says.
As CEO of Fantasy Sports Interactive, he wants to transform the way people play fantasy. That’s a challenge daunting enough during good times, but the coronavirus added another layer of complexity. With most of the world’s sports leagues off the grid for swaths of spring and summer, FSI had to do its best to adapt to the unusual climate.
“We were focused to keep our coworkers calm, to shift all our energy to the development of new products as we’ve been with half of sports in action for three months,” Tsalikis says. “To gain the most, we repaired all the new products to be ready when the season started again in the middle of June.”
As it turned out, June proved to be a fruitful time not just for the return of sports but for FSI’s emergence as a serious player in the sports betting industry. The company entered a strategic partnership with Scientific Games that will provide FSI’s trademark Fantasy Sportsbook to SG’s wide-reaching network.
Fantasy Sportsbook fuses fantasy and traditional sports betting by allowing customers to wager on fantasy-like items. For example, someone can wager whether a team will hit a certain number of fantasy points during a game’s first period.
FSI, which launched in 2012, is the first company to offer betting-oriented fantasy sports. Though the company already has partnerships domestically in Greece and in regions such as South America, the SG deal announces its arrival on the global stage.
“We are very close to announcing in the next month hopefully the first client through Scientific Games,” Tsalikis says. “So this is going to be a great success. I think it’s a great opportunity not only for US but for Europe and globally to introduce the fixed
odds solution to the whole world.”
FSI’s easiest sell might be the United States, where consumers are more familiar with fantasy sports through DFS sites like DraftKings and FanDuel. The company is targeting New Jersey in particular, where online sports betting revenue hit $29.6m in July. Once FSI obtains a proof of concept in the US, it expects to steadily market its product beyond the Garden State. Tsalikis believes his company is uniquely suited to succeed in America.
“Fantasy in the US is mainly offered as a pool game,” Tsalikis says. “But what we are offering is unique, innovative and I think going to have great results in the US because it combines the sportsbook elements that betting operators like and the fantasy sports that the US is so familiar with.”
I think that we’re going to have a very different behavior from the regulators because they’re going to try to regulate as many products as they can because this is an important revenue for states. As we now have reached out to a couple of them, we can see that they’re very positive to license the fixed bet solution.
FSI has spent the last couple months staying nimble by zeroing in on what it can control: its own product. When FSI’s first SG clients are ready to offer the Fantasy Sportsbook product later this year, Tsalikis expects a secure launch.
“This company knew our target before the coronavirus,” Tsalikis says. “We have invested in our company to have high skilled people that are able to succeed under any circumstances. I think we have succeeded in that. We saw that after this lockdown we were in for three of four months, we’ve seen that we've reached our targets. We've done the developments that we wanted to have, and now we’re focused to deliver and support the contracts we have.”
Though the coronavirus has caused havoc for many segments of the betting industry, one plus side may be that US regulators are more willing to green light new products
like what FSI is offering. Tsalikis is bullish that this will lead to more opportunities.
“I think that we’re going to have a very different behavior from the regulators because they’re going to try to regulate as many products as they can because this is an important revenue for states,” he says. “As we now have reached out to a couple of them, we can see that they’re very positive to license the fixed bet solution.”
Finding success in the US will be paramount to FSI’s ambition to eventually expand into much of Europe. While American customers have more experience with fantasy than their European counterparts, Tsalikis expects the game to catch on in both continents quickly.
“I think this transformation is going to help fantasy be a standalone product in the next three to four years both in Europe and in the US,” Tsalikis says. “From our perspective, what we’ve done in our roadmap is that once we’ve finished the development of this sport we want to offer in the next couple of years, our product roadmap is to go through live betting.”
In the near term, FSI’s focus is on reaching its target customers through the remainder of the coronavirus. Committed fantasy players, Tsalikis points out, tend to be people in their 30s who have a steady job and decent salary. That demographic may be more immune to the pandemic’s economic implications than others, but the wider industry will feel pain for some time, Tsalikis believes.
“I don’t think they’re going to have an effect only on fantasy sports, but I think long term they’re going to have an effect for the betting industry,” he says. “I think the operative spending for the gamblers is going to go less in the next couple of years. We can see in the pandemic we have a lot of loss of income for a lot of people. We’re going to know in the next three to six months what effect the economy will have (on fantasy sports) after this pandemic hopefully ends.”
With less discretionary income to pull from, Tsalikis is resolute that betting will become ever more specialized. For a company like FSI, that means less room for error but also an opportunity to double down on existing players.
“We have to take advantage of this and offer more targeting products to gamblers and I think the gamblers are going to be more careful about what they’re going to play,” he says. “I think they’re going to play products that they’re more confident they’re going to win than have fun bets or playing bets with one dollar to win $1m.”
The sports league shutdowns of spring and summer 2020 gave FSI time to reinvest in its existing products, but the return of sports was just as exciting. The company saw consumers were eager to wager once games returned, and with a loaded fall lineup on the cards, the returns could be huge.
“I’m very confident on that, because we have case studies like the German Bundesliga or the Champions League in a short year that we have managed to work it with the coronavirus,” Tsalikis says. “So I think NFL, Premier League or NBA, what they’re doing now with this bubble, everyone now is prepared to have consistent championships. If you have consistent game weeks and consistent time frames of the championship, we will see an increase of revenue not only in fantasy sports but in the betting industry in total.”
By the time 2021 comes around, Tsalikis expects the sports world to have returned to a state of near-normalcy with the addition of carry-over events from 2020. If the timing is right, FSI will be entering the pockets of sports bettors right as summer 2021’s biggest events roll around.
“I think everything is going to go smoothly,” he says. “Not excellent but smoothly. I think 2021 is going to be an exciting year for everyone because we’ve seen that a lot of big events have been shifted from 2020 to 2021 like the Euros. So according to the time frames, it’s going to be a full year.”