The future of online sports wagering will see a “Tik-Tok-ification” of the industry. At least that’s what Kero Sports is betting on.
“Today’s sports betting products will be rejected by the next generation,” predicted Tomash Devenishek, Kero’s founder and CEO, during a panel at SBC Summit North America last December.
Kero offers a white-label, curated, in-game betting engine intended for deployment inside the apps of professional sports teams, broadcasters and sportsbooks. The engine uses machine learning and AI to deliver curated bets inside an interactive and engaging social environment.
For fans, this could forever change the way we watch sports. Imagine watching a play unfold on the big screen and receiving in-game (second screen) prompts to predict what happens next. The opportunities to boost engagement (and revenue) seem endless.
Kero currently has partnerships with several teams, including the Chicago Bulls, Minnesota Vikings, Atlanta Falcons and NY Islanders. According to Devenishek, more teams will join the list this year, along with broadcasters and sportsbooks. Which, and when, however, are still under wraps.
Devenishek, born in Russia, raised in Israel and moved to Canada as a teen, hopes Kero is a significant player in Ontario. The company plans to go live at, or shortly after, the province’s launch of expanded sports betting markets next month. Details around what that entry looks like will follow.
Devenishek also believes his product will contribute to the market’s long-term evolution.
Founding Kero about following a passion
Before starting Kero (formerly Rush Sports), Devenishek served as chief technology officer and product lead for several big companies. In 2019, after completing work on the gamification engine for the Coachella app, Devenishek was in a place to choose his next adventure. He could continue to help build solutions for others or pivot to pursue a passion all his own.
At the time, he was toying with the notion the sports betting and entertainment worlds were about to converge.
“Betting is certainly part of sports entertainment,” said Devenishek. “It just makes it more exciting for you to watch something if you have some kind of material investment on the outcome.”
Something else he was beginning to notice: the increasing curation of entertainment on social platforms like Instagram and TikTok.
The shift was a far cry from the days of searching for videos one by one on YouTube, he said. Instead, social media platforms were increasingly serving content based on likes and swipes. And, it’s an approach that’s wildly successful. In 2021 TikTok, which delivers AI-driven curated content to users’ thumbs, became the web’s most visited destination. The momentum knocked Google from the top spot for the first time since 2010.
“You could see that coming back in 2019,” Devenishek said. “All it [TikTok] required a user to do is just swipe up with their thumb on a screen.”
He figured to broaden the appeal of sports betting, Kero would have to mimic the ease the audience expects.
Putting theory to test
Devenishek is undoubtedly a sports fan, especially when it comes to soccer.
But, when it comes to sports betting, he considers himself more a casual fan than a ‘sharp’ bettor. (He classifies a sharp bettor as one with a deep understanding.)
“I’ve never had an account with a sportsbook,” admitted Devenishek. “I certainly bet on sports with my friends.”
Through those betting experiences with his far-flung group of friends, he realized the benefit of mixing sports, betting and social. The combination offers broader appeal to a wider range of people than a typical sportsbook might. And it was with that same group of friends Devenishek first piloted the prototype that would become Kero’s in-game engine.
“Their response was overwhelming,” he said. “So I said, OK, there’s something here, I can keep going.'”
So, they kept building it out, eventually landing the New York Islanders as the company’s first client. Kero launched a free-to-play experience with the Islanders for fans on February 24, 2020.
The launch was a success. The timing, you might say, could have been better.
Getting into the groove
It was tough to put Kero’s partnership with the Islanders on pause during the initial pandemic-related sports stoppage, said Devenishek. But it also offered a chance to fine-tune Kero’s engine using learnings gathered during those first weeks live with the Islanders. Tweaks that further improved fans’ free-to-play experience.
By the time the NHL popped its bio-secure bubble, Kero had added the Bulls, 49ers, Vikings and Falcons to their client roster.
For Kero, carving its place in the industry meant finding its groove with fans.
“If you’re going to curate bets, you need to have a good cadence,” said Devenishek. And finding the right rhythm is key to maximizing engagement.
Initially, Kero served bets to free-to-play players in 5-minute intervals. Gradually it shrunk the window between wagers to four, three, two, one minute, and finally 30 seconds. With each move, engagement stats went up. So, Kero threw the interval back to five minutes to see what would happen.
“One of the awesome things about having a chat in your app is people will complain right away,” said Devenishek. “And people freaked out.”
Finding the right flow
Initially, the team at Kero didn’t understand the reaction. So, Devenishek asked a contact in the gaming industry. That contact looked at the stats and quickly saw a similarity to slot mechanics.
Slot machines are extremely ‘sticky’ technology, said Devenishek. And slot cadence very quickly puts people into a ‘state of flow’ where every spin delivers dopamine. It’s not whether you win or lose, rather it’s the thrill of what may be. So, by mirroring a slot mechanic in a sports environment, you’re doing the same thing, putting players into a state of flow. When you knock your audience off their groove by increasing the time between bets, that messes with the dopamine hit.
Based on this insight, Kero quickly realized algorithmic capabilities would be critical. On their own, humans could not curate engaging betting propositions in real-time at scale. Certainly not across a full schedule of NBA games, for example.
“Fast forward to today; we run fully algorithmically on basketball and football,” Devenishek said.
“We’re building out hockey, and we’re supporting the industries where we have clients and then slowly growing horizontally.”
These days, players inside a Kero-powered environment are served a new bet every 30 to 60 seconds.
“It’s extremely engaging,” said Devenishek. “People spend about 30 minutes on average, per game inside the apps that we power, which is a lot.”
For Kero, that engagement underlines that they’re on to something good.
Getting noticed and championing growth
Further indication for Devenishek that Kero is on the right path: The industry is starting to pay attention.
After self-funding the company for the first two years, Kero closed a seed funding round last October, bringing in US$1 million. In part, the company used that money, said Devenishek, to bring on revenue and data specialists.
Kero has also been having exciting conversations with major media companies, sports leagues and leading sportsbooks. One of the latter even expressed interest in an acquisition, but, for now, the plan is to keep following recent momentum.
“Everything that we see now is reinforcing the fact that the strategy is on point,” Devenishek said.
It wasn’t always like that, however. As he recalled, it took months to land the Islanders, a few more for the Bulls, then the Niners, and so on.
“People are not necessarily realising the opportunity that there is around the in-game micro betting space,” he said.
But, that’s starting to change, he said. And he believes the boost to entertainment and engagement will help drive expansion in the industry.
Not just because the innovation will drive the next generation of betting products, though he believes it will. But also, the ease of use and social aspects will appeal to underserved sports fans intimidated by existing sportsbooks offerings. Not the sharp bettors well-served by today’s sportsbooks, said Devenishek. But the dabblers or those who don’t bet at all. Both are categories that include a lot of women.
There are a lot of sports fans who bet on sports. However, a majority don’t, though perhaps that would change if sportsbooks were easier to navigate for novices.
Making sports betting, whether free-to-play or real money, more accessible welcomes more players to take part. Inviting casual bettors in could be a real boon to the industry.
Building a more accessible sportsbook experience
According to a 2019 Facebook report based on stats from a study of 90,000 internet users, nearly 80% of women globally watch live sports. That’s not much different from the 90% of men (worldwide) who reported the same. The binary breakdown in viewership in the US and Canada is 53% male to 47% female.
Another recent report on sports betting in Canada found approximately 38% of Canadians are either interested in or are actively wagering. However, the report from Deloitte also found only a small number (8.5%) of those bettors are regular or ‘ardent’ bettors. Most Canadians are ‘casual’ (33%) or ‘potential bettors’ (58.5%), who wager rarely or not at all.
Unsurprisingly, women made up a good chunk of these less experienced groups. Interestingly, women were well represented among ardent bettors, too (43.7%).
For an industry looking to grow, figuring out how to reach underserved communities is a no-brainer. The accessibility of Kero’s style in in-game micro-betting could be a part of making that possible.
Devenishek uses his wife as an example: She will play slots, but she’s not comfortable playing table games like blackjack or baccarat. The difference is she has confidence in her ability. And slots are super accessible.
“What is that version of sports betting? I don’t think it existed,” Devenishek said. “I think we’re building it.”
Closing the loop
People, even die-hard fans, rarely give you all their attention.
The same Facebook study found, globally, 90% of people use a second screen while watching TV. For 79%, their mobile device was the top choice when second-screening. And half are diverting their attention to social media and chatting with friends when not focused on the big show.
Considering all that, Kero’s move to ‘Tik-Tokify’ sports betting makes sense.
“Why would you need to reinvent the wheel when you can borrow from it?” asked Devenishek. “It’s actually the closing of a loop. Most social media borrow tremendously from slots mechanics.”
Devenishek cites Addiction by Design: Machine Gambling in Vegas by Natasha Dow Shüll. The critique is considered a bible for anyone interested in social media product design.
When it comes to hacking the psyche, “slots were version 1.0,” he said. “Social media is version 2.0.”
Kero’s approach melds the two (within a sporting context) for a next-gen offering.
Coming soon: Canada, real-time and real money bets
In January, Kero took a big step and launched the first deployment of its free-to-play in-game tech with a gaming operator, Canada’s NorthStar Gaming.
NorthStar and its sportsbook, NorthStar Bets, are owned by NordStar Capital, which also owns TorStar Corporation (publisher of newspapers including the Toronto Star).
Together, NSG and Kero debuted PickPlayNext.com, ahead of the Buffalo Bills and Kansas City Chiefs matchup. The partnership allowed Canadians a taste of Kero’s next-gen in-game entertainment—and a chance to win Uber Eats gift cards.
“Canada is a great market because a lot of tech companies pilot stuff in Canada,” said Devenishek, who still says ‘we’ when talking Canada despite living away for more than two years. “Bless the folks at NorthStar for believing in our vision and taking us on as a vendor.”
“I think we’re going to productize the real money version in Canada first,” he added.
And that’s an evolution he’s particularly excited about. “We definitely view Canada as a great ground to productize and iterate.”
That said, whether Kero goes live with operators in Ontario when the provincial market launches on April 4 is yet to be determined. Or perhaps, the news is still under wraps. Regardless, it won’t be long before Ontario players experience Kero’s tech in action.
“You’ll see us very quickly in Canada,” Devenishek said.
Real-money micro bets coming to democratize a sportsbook near you
Devenishek often shares an anecdote of a phenomenon they see in the Bulls chat.
A man will show up, complaining that his wife, a ‘lesser’ sports fan, is above him on the leaderboard, said Devenishek. On the one hand, he tells us he’s frustrated because he should be doing better than his novice wife as a’ better’ fan. On the other, he’s saying the technology is accessible enough for her to adopt as a non-fan. And it was fun enough to keep her engaged long enough to beat him.
“I want that,” said Devenishek. “I want to have this democratized entertainment value within sports. Because guess what? A lot of people who watch sports are not super-savvy, smart-risk traders. That’s the majority.”
Adding real-money options to Kero’s style of user-friendly, low-risk micro bets has a lot of possibilities. It not only offers the opportunity for sportsbooks to broaden customer bases but for sports teams and leagues to maximize fan engagement. Devenishek even believes in-game micro bets can even assist with responsible gambling goals.
Responsibility in real-time
“If we can do it in a way that isn’t conducive to people losing their mortgage,” he said, of the introduction of real-money in-game bets. “Well, then I genuinely feel great about our mission.”
He uses a scratch ticket as an analogy:
“That $3 you paid for it. Whether you won or lost, you were kind of OK to lose it in the first place. Same as my wife [and slots],” he added. “She has full confidence in the value exchange irrespective of the outcome because it provides entertainment. It’s like, you go to a movie, you pay 20 bucks, you are entertained for two hours. So here, if you lose 20 bucks and you’ve been entertained for two hours, it’s the same value.”
And it’s a lot harder to play beyond your limits as you coast through a game-winning and losing low-risk micro bets (likely $1-$10 per bet). Much the way slots work, real-money micro bettors will win some, lose some.
But what actually happens, said Devenishek, is you stretch out that time of play. Going back to slots can be very lucrative in the long run.
He added that if you can engage people in the right way, they will come back. In-game betting becomes a lot of fun if delivered in the right way, with the right UI, cadence and context.
“That’s what we’re focused on.”
That said, real money gaming will bring challenges along with upsides.
One challenge will be figuring out how to manage risk should operators make it possible for players to bet against the house.
But before that can happen, something else needs to be addressed: lag time.
Picture it, Sicily 1922
These days, a lot of us watching sports watch online. Depending on the viewing platform chosen, that can mean contending with broadcast lag time. Real-time technology exists, but for the most part, broadcasters haven’t made the investment to upgrade, said Devenishek.
And it’s unrealistic to expect bettors to wager much on in-game betting until they do.
“One of the ways that you can find the upside is in gamifying the broadcast,” argued Devenishek.
Picture it, he said:
LeBron steps up to shoot two free throws within the next 60 seconds. If I gave you that bet, and you haven’t even seen the foul yet? But with real-time play, now you can see how this becomes introduced into NBA League Pass (for example).
Added Devenishek, “That’s where we really fit in.”
