Having secured $12 million in a Series A funding round that involved notable investors, Tennessee-based Wagr launched its social sports betting app on January 21. It’s special because it allows sports fans to bet against others within the community instead of the house.
Wagr co-founder and CEO Mario Malavé explains: “[Traditional operators] only make money if you lose more than you win, full stop, so the incentive alignment is misaligned… Our entire value proposition is: We’re not the house. Our motto is: Challenge your friends, not the house.”
However, Wagr still needs to generate revenue, so it charges a flat 5% transaction fee based on betting volume.
On August 31, 2021, Tennessee became the first state to approve Wagr, following Tennessee Education Lottery’s green light. In fact, Wagr is the first social betting operator to obtain a license in the US.
The authorities are most likely motivated by the overall success of sports betting in the state. Before Arizona, Tennessee had the highest debut-month handle.
Wagr aims at making sports betting a fun, social, and inclusive experience instead of a complicated and intimidating one. The app is designed to facilitate keeping track of wins/losses and dealing with payments.
Moreover, you don’t have to make bets — Wagr can be used to get informed about the latest games or see what other users are betting on.
There’s also a nice safety feature, allowing you to set betting, deposit, and time limits if you recognize problematic behavior.
The money gathered via the Series A funding round will allow the operator to additionally develop the product and launch it in other markets. The investors include BITKRAFT Ventures, The Kraft Group, Greycroft, Pear Venture, and more.
Moritz Baier-Lentz, a partner at BITKRAFT Ventures, says: “We’ve seen community-centric financial products […] gain huge popularity in recent years, and we believe sports betting could be the next market to benefit from an experience that’s truly designed for fans — not to maximize profits for the house.”
It seems that online betting will be the driver of the industry’s success in the future, considering the fact that the market is projected to reach $59.5 billion in 2026. We can conclude that Wagr has a rather different approach to sports betting, and time will tell whether its users are satisfied.