## Waterhouse VC: Industry Luminaries in the Spotlight – Individuals – iGB
In this latest piece, Tom Waterhouse of Waterhouse VC shines a light on three industry trailblazers and examines their journeys to the top.
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Waterhouse VC: Industry Luminaries in the Spotlight
In every domain, there are certain individuals who rise above the rest, and the gambling sector is no different.
This month, our focus is on three exceptional leaders in the field: Tim Heath, a trailblazer in cryptocurrency gambling; Peter Jackson, Chief Executive Officer of Flutter Entertainment; and David Walsh, renowned as one of the world’s most accomplished professional horse racing wagerers.
Over the past ten years, the online gambling sector has witnessed significant expansion driven by the widespread adoption of mobile devices. Heath and Jackson spearhead pioneering companies in digital innovation within the industry.
YOLO
Heath, hailing from Australia, is a serial entrepreneur and venture capitalist in the gambling sector. After completing his university studies, he established a software development and e-commerce venture, Heathmont.net.
In 2013, he launched Coingaming Group, a cryptocurrency gambling operator and supplier, which underwent a name change to Yolo Group in 2021. Yolo Group is now widely recognized for its substantial B2C gambling operators Sportsbet.io and Bitcasino.io. We’ve previously explored the rapid growth of cryptocurrency gambling and Sportsbet.io in our newsletter.
A seasoned corporate entity, employing over six hundred individuals, Yolo possesses a diverse portfolio encompassing gambling and venture capital endeavors. Yolo’s consumer-oriented brands were pioneers in integrating streaming into all significant sporting events, and they were early adopters of the now ubiquitous “cash-out” feature.
Sportsbet.io and Bitcasino.io are industry leaders, boasting withdrawal times as swift as ninety seconds for users.
Heath’s commitment to customer satisfaction has propelled Sportsbet.io to become one of the largest crypto betting operators worldwide. The company generates a monthly turnover exceeding $2.7 billion. To put this into perspective, the largest operator in Australia averages a monthly turnover of $1.2 billion in 2023, controlling roughly half of the market share in the nation.
What lies ahead on his agenda? He aims to transform the international payments landscape, which currently relies heavily on the SWIFT system. He believes SWIFT suffers from inefficiencies, such as delays and a lack of privacy.
Global Supremacy
Meanwhile, Jackson has served as the CEO of Flutter Entertainment since January 2018. Under his guidance, the company’s valuation has doubled, making it the largest publicly traded gambling enterprise globally. Only Bet365, privately owned by the Coates family, comes close to Flutter in global reach.
Flutter is the sole publicly traded consumer-facing betting operator within the Waterhouse VC portfolio.
Jackson earned his degree in Manufacturing Engineering from Cambridge University and spent a trio of years at McKinsey sharpening his professional abilities. Subsequently, he joined Halifax Bank of Scotland, assuming a variety of positions until its acquisition by Lloyds Banking Group in 2009.
At the age of 34, he was named CEO of foreign exchange firm Travelex. He guided the company for five years, increasing revenue and ultimately overseeing its £1 billion sale. From 2013, he served on the board of Betfair, before being appointed CEO of Flutter five years later.
Early in his time at the helm, Jackson recognized the significance of scale and efficiency in a high-tax, highly regulated industry. Drawing upon his experience in consulting and banking, Jackson streamlined operations, achieving market dominance in their respective markets through organic growth and acquisitions such as MaxBet and Junglee Games.
The Flywheel Effect
By harnessing Flutter Group’s broader global industry knowledge, technology development, customer insights, and data analytics, each of Flutter’s divisions benefits from a “flywheel” effect.
This flywheel propelled Flutter’s US business, FanDuel, to an 11-fold increase in revenue from $300 million in 2018 to approximately $3.3 billion in 2022, now holding a market-leading 37% share.
Jackson played a key role in Flutter’s recent dual listing on the New York Stock Exchange (NYSE:FLUT).
The firm went public on the American stock exchange on the twenty-ninth of January of this year, making it simpler for them to access the American capital market and streamlining the procedure of providing stock incentives to American workers.
Historically, American stocks have been valued more highly than other global stock markets. Flutter’s investors will benefit from this higher valuation, and the company can leverage its premium valuation to raise more capital at a lower cost.
Mona
The betting industry provides amusement at a price. Only a very small percentage of individuals are able to wager profitably – they don’t need to pay for entertainment.
We believe that there are no more than fifty gambling groups globally that can win on a large scale. David Walsh is considered one of the most successful bettors in the world, and he teamed up with Zeljko Ranogajec to form this group.
The group wagers on horse racing, sports, lotteries, casinos, and financial markets worldwide. The group is reportedly generating over $3 billion in annual income. However, some estimate their global turnover to be much higher.
Walsh invested $75 million to establish the Museum of Old and New Art (MONA). For his contributions, Walsh was awarded the Officer of the Order of Australia (AO) for his outstanding contributions to the visual arts and his support for various cultural, charitable, athletic, and educational organizations.
Can emerging groups rival this?
Highly skilled and exceptionally bright individuals are the best bettors. They possess a profound comprehension of the intricate workings of every sport, casino game, and lottery.
They can model numerous variables to forecast the genuine likelihood of results. Subsequently, they integrate all these variables to conduct a professional wagering operation, which entails managing a substantial team of individuals.
Particularly within the racing sector, teams of specialists in mathematics, statistics, and computer science routinely develop, maintain, and enhance algorithms that analyze vast quantities of historical racing data and race-specific individual factors—such as track conditions, jockey statistics, splits, weather, and bloodlines—to guide betting decisions.
As mentioned previously, racing betting groups also benefit from receiving rebates on their wagers regardless of the outcome. To qualify for rebates, groups must invest substantial capital. Rebates effectively enhance their pre-existing “advantage,” making it increasingly challenging for new groups to compete in racing.
Waterhouse VC is a fund for institutional investors that specializes in investing in global publicly traded and privately held companies associated with betting and gaming.
Since its establishment in August 2019, Waterhouse VC has attained a total return of 2,858% as of February 29, 2024, assuming all distributions are reinvested.
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