According to the American Gaming Association, the U.S. sports betting market generated $10.9 billion in revenue across casinos, sportsbooks and iGaming in 2023. One of the reasons the industry is so lucrative is because the majority of people who bet on sports lose. DubClub, a three-year-old San Francisco-based startup, is looking to change that.
“When it comes to betting on sports, they're at a structural disadvantage against sportsbooks,” DubClub co-founder and CEO Ryan Gartner told TechCrunch. “They have more data than the average person. These companies make money when people lose.”
DubClub wants to help amateur bettors win more by finding experts who can help them better understand which bets to place. DubClub is a platform where amateur sports bettors can sign up with professional “cappers.” A “capper” is a gambling industry term for someone who researches and picks winners using a unique handicapping system. Cappers are a profession as old as gambling itself, and a hotbed of fraud. But DubClub claims to vet these sports content creators. Users receive information via text, email, or Discord.
Gartner says the idea for DubClub came from overhearing a conversation between co-founders Andrew Daschbach and Louis Blick. Daschbach wanted better information to gain an edge in sports betting. He found handicappers online who were willing to share their predictions, but these were hard to find, the payment process was uncertain and fraud was hard to avoid. Gartner knew Daschbach wasn't the only one with this problem.
“Cappers really wanted to get paid, and they were already getting paid for their advice, but that system was outdated,” Gartner says. “We felt this was the perfect place to build a product and network that would bring the two together.”
Gartner said he spent six months working with sports betting content creators to build a platform they were excited to adopt. The company was founded in 2021 and has since seen more than 1 million sign-ups on its platform, with some users continually signing up for certain cappers for over a year, he said.
DubClub just raised $7.5 million in a Series A round led by Renegade Partners. Gartner said DubClub doesn't need to raise capital because it's not a particularly capital-intensive business. He added that the funding is to enable DubClub to build a better technology stack and website. Gartner acknowledged that the company's technology is good right now, but not the best, and said the company needed the money to hire engineers and product people.
Rosanne Winneck, co-founder and managing director at Renegade Partners, said she was introduced to the company through Uncork Capital partner Trip Jones, who led the company's seed round. As the two were waiting at the airport for a delayed flight, Winneck asked Jones a question she often asks fellow venture capitalists: “What's your favorite investment?” Jones said Dub Club and Winneck decided to look into the space, even though they didn't know much about it.
“We have a significant amount of vertical SaaS in our portfolio. I don't think you really think of Handicapper as a vertical, but this is a consumer trend, with the creator demographic on top of it,” Winnecke said. “It's a get-rich-quick market. It's $10 billion in size. It's expected to hit $30 billion in a few years.”
Sports betting is an interesting sector for DubClub to enter, despite the potential for growth. While it has the potential to be a huge market, it is also a polarizing sector. Many consumers and investors do not want to be associated with the gambling industry due to its association with addiction. Some investors are also prevented from actually getting involved in the gambling industry due to the anti-gambling clauses that LPs put in place to prevent GPs from backing certain types of businesses.
While DubClub itself is not a gambling platform, Gartner said he is aware of the industry's perception. He stressed that DubClub is a platform for users who bet on sports as a hobby, not a profession, and that it tracks how much money users spend. He added that the company is considering adding guardrails and guides that would allow it to set limits on how much money users can spend on the platform. But that's why this space is so controversial: setting limits may be the right thing to do, but restricting usage could have a negative impact on the company's revenue.
DubClub is not the only company connecting handicappers with sports bettors, BetFirm and SportsCapping are others.
Gartner believes Dubs Club's current subscription business is just the beginning — eventually, he wants to add features that allow users to discuss different bets, much like social media companies do — but for now, football season starts this weekend.
“It's not about winning, it's about winning more together,” Gartner said.