Until now, sports gambling in the United States has faced harsh restrictions. With the Professional and Amateur Sports Act of 1992, all sports gambling was made illegal except in Nevada, Delaware, Montana and Oregon as those states had already made sports gambling legal. As esports gambling falls into the same category, citizens of the United States that wish to gamble on tournaments have had to do so through third-party off-shore websites that don’t operate under United States restrictions.
All that changed with the Supreme Court ruling the PASPA unconstitutional as a result of Murphy v. NCAA. Sports and esports gambling is now legal in the United States but each state must set its own regulations. New Jersey has already introduced a law that actually specifically bans esports betting but the wording leaves a very grey area.
We sat down with Zach Smith, CEO of MoneyMatches – a Las Vegas-based analytics company and free-to-play esports betting platform where players win prizes, not cash. We discussed the advancements in the MoneyMatches platform along with how he thinks the Supreme Court ruling will affect esports betting in The United States.
Esports Insider: Thanks for joining us today Zach! First of all, for those unfamiliar with MoneyMatches how did the platform get started and why?
Zach Smith: MoneyMatches has been active since 2015 and we actually started as a betting company. We wanted to be the go-to for esports gamblers but it didn’t make sense to do that yet in the United States at the time. Through our beta testing of the platform, we collected so much data that people wanted. People bet on odds in esports just like in traditional sports and those odds are based on data. People are constantly changing the betting odds in person so we looked at that and wondered ‘why aren’t we creating algorithms for this?’. We decided instead of spending finances on licensing for strictly betting, which hadn’t be regulated yet, that we would instead become the bookies of esports, not the casinos. Primarily we sell our data to betting websites, our public platform is free to play, you don’t have to spend a dime on our website and we actually encourage you not to but there is an option to buy tokens as well.
“It was a great ruling but I think what a lot of people don’t understand is that it’s not instantaneous”
ESI: With this Supreme Court ruling, how do you think it will affect MoneyMatches and esports betting as a whole?
Zach: I’ll steal a line from Mark Cuban: “It doubled my companies net worth overnight.” The more people that see the opportunity to utilize this and see the profit margin, the bigger the players that come in. It was a great ruling but I think what a lot of people don’t understand is that it’s not instantaneous, it’s now purely state by state. For example, the Indian casinos in California have already lobbied for horse racing to be legal so they were already one step ahead of that. When you think about it, there are five states that are in the process of passing the bill to become law for betting and as it goes state by state you’re going to see 30 states legalize it in the next two to five years. Everyone else will be the Indian casinos, Las Vegas and Atlantic City.
“We would rather be the bookies, not the house.”
ESI: Do you see MoneyMatches as staying in data and analytics or will you focus more on betting now that it’s legal?
Zach: I think as a whole our company is widely known as the go-to for data and analytics and diving into real money would change our entire model. I think we would lose a large majority of our fan base. I don’t think the margins from the monetary side would be beneficial but we’re an ever-changing company. I can’t say that we won’t do it but it’s definitely not on our roadmap to change. We would rather be the bookies, not the house.
ESI: How do you see it affecting companies looking to come into esports betting in the United States? Will it be a ‘wild west’ of people making these platforms or do you think it will be gradual?
Zach: From a morality standpoint a majority of people think gambling is evil. Unfortunately, anything that is addictive needs regulation so there will be an adoption rate. With that comes the boards like the Nevada Gaming Control Board (NGCB). I think at first it will be the wild west and everyone’s going to get screwed over. You’ll see a lot of skin betting scams again and coin flip websites but I think the big players will get bigger and better with regulations. The small players in the back room with the secret entrance won’t affect the overall scope of esports betting. I wouldn’t say the change is going to be as fast as everyone thinks it’s going to be but it will take a turn.
ESI: What issues or growing pains do you think the United States esports betting platforms will face despite the ruling?
Zach: I think that platforms that have the backing behind them really have the room to grow. The companies that have 11 employees aren’t publicly backed, didn’t do a round of funding or are looking to do a round of funding will most likely fail. The small to mediums are going to disappear, merge, or get bought out. The tycoons like Unikrn and GGBet are going to excel exponentially. I hope they do because you always want to see your friends do well, especially the people that buy stuff from you [laughs].
ESI: MoneyMatches has been making a lot of acquisitions lately. Tell me about those and what it means for the platform.
Zach: MoneyMatches is owned by Elysium Holding, which is operated by myself and Jacob Cecil and we like to put our hands in many honeypots. With our acquisition of EasternMedia, we saw a lot of disconnect in dealing with designers. I hated dealing with 15 or 16-year-olds and getting a design two weeks after it was due. It was frustrating in its own right so we wanted to partner with them so people don’t have to worry about it. If there are issues people know it’s MoneyMatches backed.
We also recently acquired ConcurApp after six months of negotiation. They’re a data company that creates a systematic platform to track where players go and the style of coaching, like white-boarding for a basketball coach. They’ve only been in Gears of War and Call of Duty and we see potential to get them into Halo, Smite and other games. Obviously, more money means more data for us so that was a strategic buy. We’re always looking to expand and not just sit in our bubble.
— ConcurApp, LLC (@ConcurApp) June 5, 2018
Zach: As a final thought I just want everyone to know with the new betting laws in the States to bet responsibly. You never want to put yourself in a situation where you run out of your income because you think you can make it big. Just like anything else in life, 99% of the time it’s not going to work.