A Q&A with CashBet co-founder and CEO Mike Reaves. The Oakland, California-based online gaming startup announced back in February the closing of a $1.7 million Angel funding round from Fred Hsu and additional private investors. It’s not very timely in terms of news, but interesting nonetheless because the company is building a platform for real money betting in social and mobile games in the UK and U.S. It was founded in late 2012 by Reaves and CTO George Weinberg, and previously raised $200,000 in Seed money.
SUB: Please describe CashBet and your primary innovation.
Reaves: CashBet was founded in 2012 by a top notch team of gambling industry veterans with expertise in legality and compliance, including myself and CTO and co-founder Dr. George Weinberg. Last year, our platform was in private beta with game developers for managing licensing and compliance requirements, as well as player registration, verification, and banking needed to enable online gambling within games.
As of our most recent announcement, we are launching this platform in the UK with our first games. We also just announced eligibility for a New Jersey transactional waiver, and we’re actively in discussions with Atlantic City casinos for online expansion. We’re dedicated to bridging the gap and making it easy for social and mobile developers to operate their games in the e-gambling market.
SUB: Who are your target markets and users?
Reaves: Our initial target markets include the UK, and U.S.—specifically in New Jersey. The Alderney Gambling Control Commission (AGCC) awarded us Category 1 and Category 2 e-gambling licenses, which give us the ability to conduct online gambling transactions in Europe. Our customers are social and mobile game developers looking to tap into the massive revenue opportunity of the real-money gambling market.
SUB: Who do you consider to be your competition, and what differentiates CashBet from the competition?
Reaves: Currently, we consider Betable to be our primary competition, although we differentiate from their platform and approach in quite a number of ways. First and foremost, we differentiate from other platform providers in that every member of the CashBet team has experience in real-money gambling and deeply understands operations, security, and compliance requirements in this industry. Additionally, we offer a more complete platform than our competitors—we offer a robust engine that leverages mathematical modeling for multivariate testing of marketing messaging to players. This enables us as well as our partners to better understand the needs of the players and the market.
SUB: You announced in February that you’ve closed a $1.7 million Angel funding round. Why was this a particularly good time to raise more outside funding?
Reaves: This is the opportune time for us to invest in time and resources into building the most robust platform offering—from a competitive standpoint, and also because there’s a lot of movement happening globally in the online gambling industry. We are setting up our company and our platform to take advantage of these changes, so that our game developer partners can truly benefit and tap into this market.
SUB: How do you plan to use the funds?
Reaves: We’re leveraging the funding for our platform development and technical resources. We truly have a unique platform offering and an aggressive roadmap of features that we’ll be building out this year.
SUB: What were the first steps you took in establishing the company?
Reaves: The first step to building CashBet was really bringing together the right people with the right expertise in the casino and gambling industry. To build a company in this industry, you must have an understanding of the legalities, security, and licensing requirements for structuring a company in online gambling. Our entire business is based around unique expertise in this industry that we can offer to game developer partners.
SUB: Do you have plans to seek additional outside funding in the near future?
Reaves: We are planning to seek out additional funding this year, particularly as the market and opportunities for real-money gaming is expanding. Game publishers and developers need a robust platform offering to market to their players, and our goal is to bring this platform to them as quickly and as feature-rich as possible.
SUB: What have the most significant challenges been so far to building the company?
Reaves: One of the challenges in building a company in this industry is creating awareness and understanding of the complexities in operating online gambling. Not every company that enters this space will be able to operate successfully within the rules and regulations that need to be abided. We’re fairly unique in that we’re well-positioned and structured to run online gambling successfully, both overseas and here in parts of the U.S.
SUB: How do you generate revenue or plan to generate revenue?
Reaves: We monetize through licensing of our platform. We’ve brought together all of the necessary security and legal compliance for real-money gambling, which in itself is quite an accomplishment, and we’re providing easy access to developers.
SUB: What are your goals for CashBet over the next year or so?
Reaves: For the next year, we’re focused on launching our platform in the UK market, and growing our partnerships with game developers clamoring for access to the billion-dollar gambling industry. At the same time, we’ll be continually expanding on our platform capabilities and looking ahead to ways we can further the online gambling industry.