ZenSports set out to raise $1 million of seed funding as the peer-to-peer sports betting marketplace sought capital for its expansion into the US market. It ended up pulling in nearly $1.5 million.
The figures show that it’s not just flashy stocks like DraftKings and Penn National Gaming that’s driving investors to sports betting and online gaming. The fundraising round, which occurred during the COVID-19 pandemic included previous investors Cube Magic Gaming and LAUNCH, which is led by tech entrepreneur Jason Calacanis.
“Private investors are definitely very, very, very excited about the space,” ZenSports Co-Founder and CEO Mark Thomas told Casino.org.
Thomas added the company closed the round with an $8 million valuation cap.
The company has operated internationally for about a year and a half. In that time, more than 25,000 wagers have been placed on through the ZenSports app with the handle totaling more than $12 million. Like a sports betting exchange, the app allows bettors to offer wagers that others can then accept.
It’s not like we’re just going out, looking for money to go build a product or something,” Thomas said. “We have a product. We have paying customers. We have a lot of great IP behind our technology.”
Since the bets are between two or more individuals, there is no juice or vig on the odds. Instead, ZenSports charges a fee it says is substantially less than a sportsbook’s juice. That fee is reduced even more for customers who bet using ZenSports cryptocurrency for the wagers.
Focus on Nevada Now
With the funding round over, Thomas said the company’s focus now centers around getting its license approved by Nevada gaming officials. In early August, ZenSports announced that through a deal with Strategic Gaming Management (SGM), it acquired an option to but the Big Wheel Casino in Lovelock, which is located about 100 miles northeast of Reno.
The deal also includes operating the sportsbook at SGM-owned Baldini’s Sports Casino in Sparks, which is adjacent to Reno.
The company expects the licensure process to take between six to nine months.
However, Nevada’s online gaming regulations require in-person registration for online gaming accounts. Because of that, Thomas said ZenSports will look for additional casinos across the state to expand its sports betting marketplace network. That includes an eye on Las Vegas or the surrounding area.
“If we can get probably three to five locations across the state that’s ideal,” he said.
Beyond Nevada, ZenSports is working with another company as part of a joint venture for a new casino in Cripple Creek, Colo.
Next Steps for ZenSports
Like other sports betting companies, ZenSports saw a big jump in activity in August play. The handle increased from just less than $500,000 in July to about $2.3 million. That’s close to the marketplace’s record month when the app handled about $2.5 million in bets in February.
Thomas said the return of the major professional leagues certainly helped. However, ZenSports also added four eSports contests to the menu as well as tennis to offer more betting opportunities.
“We feel like we’re back to normal,” Thomas told Casino.org.
Beyond Colorado, the company is looking for other states where to expand. Thomas added a business development executive has come on to help identify opportunities. Some of the states that look particularly enticing are ones that are wanting to develop “mobile-only” markets, like Tennessee and Virginia as well as tribal gaming states like Arizona and Oklahoma.
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