For those who are not familiar with fantasy sports, can you give us your elevator pitch?
Oulala is the first game to enable you to prove to your peers that you are a better football manager than they are. Build your team with players from the major European leagues, then watch the real matches on television. Yes, Oulala sticks closely to reality, so any of a player’s actions on the field will add or remove points from your team. At the end of the day, since the game is monetised, having more points than your friends will mean you don’t just gain pride, but you also win your friends’ money.
Many believe that Daily Fantasy Sports (DFS) is the next sensation in online gaming. Oulala was one of the first companies to offer fantasy football in Europe. Can you tell us how it all began?
Some years ago, when I worked as marketing director and shareholder for a French horse racing company called ZEturf, I realised that younger customers were progressively seeking a richer gaming experience than the one offered by games based on luck. Fantasy sports are social skill games that perfectly cater to this need. When I met Benjamin Carlotti, who would later become co-founder and managing director of Oulala, he introduced me to the concept of fantasy sports. Ben had just returned from America and was looking at ways of adapting fantasy sports to the European market.
After closely studying the success of FanDuel and Draftkings in the US, Ben and I launched Oulala in 2014, however unlike the American games, which are mostly based on American sports, we created a game based on European football.
DFS is making a simple but strong promise to its customers: when playing, you will be able to prove to your friends that you know the sport better than they do. However, in order to do so, our game needed to be a real skill game, not a game of luck.
To solve this issue, we hired a team of statisticians that spent six months creating a scoring system that would allow our game to be a real skill game. We then ran the game as a free version for two years. Two years is a long period for a start-up; two years without creating any revenue. However, it was imperative to prove that Oulala is a real skill game. It was only at the end of 2015 that we launched a monetised version of the site that is now used as a case study to show future B2B partners the efficiency of our game.
How did you rise to the challenge of securing investments to launch Oulala?
It was a challenging journey as is the case in most start-ups. At the time, one of the disadvantages was the lack of venture capitalists and business angels in Malta; so we had to look overseas though this is currently changing. We had to find people who had an interest not only in investing in a start-up but also in the fantasy sports sector. Eventually we raised €1.8 million in investment from business organisations and business angels.
In 2016, we were also able to close an intermediate round of funding of €1,35 million. The European DFS market’s recent spurt of growth made that funding essential in order to give Oulala more instant traction on the market while also cementing Oulala's position as the first DFS network specialising in European football. We now have investors from four different continents. We have also received financial support from the Maltese Ministry of Economy and Google, which awarded us as an innovative start-up business in 2014.
"Malta is currently becoming a major digital hub in Europe, and there is no doubt that more and more start-ups will, in the near future, use Malta as their base."
What would you highlight as the main advantages of starting up in Malta?
Malta is one of the best places in Europe to launch a start-up. It is an English-speaking country, a member of the European Union and just a few hours away from most European cities. Malta also boasts a professional gaming eco-system, competitive labour regulations and salaries. It is also relatively easy to hire people in Malta, or to attract them from abroad. If you think about it, when your job consists of working in front of a computer, why live in an expensive, crowded and polluted city with bad weather? Malta is currently becoming a major digital hub in Europe, and there is no doubt that more and more start-ups will, in the near future, use Malta as their base.
The regulation of fantasy sports is a hot topic. What’s your experience in this regard?
When we launched Oulala, there was no skill-game regulation in place in European countries. By default, the game was considered a sports betting activity. It was therefore essential that we aimed for a legal frame from the gaming authorities that was tailored to our specific function.
Our industry clearly needs a more suitable DFS licence, one that would be granted only to companies who can prove with certainty that their game is based on real skill. It is crucial that legislators exercise caution during the selection process of operators, and base their decision on the quality of their game and scoring system, while maintaining the accuracy of the DFS game as the feature of chief importance. A DFS license should therefore only enable verified skill games to offer a white label version of their game to third parties. Right now, Oulala is one of the few that has a white label version available on the market, however other companies will almost certainly follow suit in due time, with the aim of launching their game through numerous partnerships.
It is in both the operators and the players’ interest that a proper legislative frame is put in place. This would help prevent the system from going down the same road as poker did. This means preventing the system from allowing unfair advantages that would benefit professional players over casual players.
We have already discussed our sector’s needs with European legislators. As expected, Malta was the first country to welcome our suggestions. The result is the launch of a specific game licence later on this year. This will most definitely push the development of fantasy sports in Europe an enormous step forward.
What role do you believe Malta can play in building up this sector?
There is no doubt that Malta will soon become the epicentre of DFS in Europe, thanks to its tailor-made skill game licence. Anyone hoping to penetrate the European DFS market will likely choose to base their company in Malta. This will create jobs, tax income and growth for the country. We are very proud to have been the company that initiated this movement four years ago.
What kind of disruption can the iGaming industry anticipate from the advent of the European DFS sector?
The iGaming market is entering a critical stage, wherein most of its current customers are those who were raised playing video games; a post-70s generation that most likely owned an Atari, Nintendo or PlayStation. There is much that can be learnt from the video gaming industry, including the notion that one should always push the boundaries of quality and that skill is paramount, but the most important lesson is that customers expect to play against each other. The social factor is thus becoming the foundation of all successful games. Despite this, however, iGaming operators such as sports betting and casino operators in particular, are struggling to embrace this.
The reason for this is the notion that after playing against their own customers for years, a complicated relationship has developed. When the goal has been taking their money whenever they lose, one would expect them to harbour a certain sense of aversion towards the operator. Thus, when the ‘social’ revolution began to flourish, the iGaming sector quietly ignored it, fearing the countless consequences that this could hold for its optimised business models. We are aware that many operators do not believe in social games. However, millennials do indeed desire good skill games. DFS are just the first step in this development.
Many start-ups want to scale quickly in order to sell out. Where do you plan to go from here?
Oulala was not created to be sold quickly. Our initial plan was to become the major DFS network in European football. Milestone after milestone, we are gradually moving towards that position. 2016 will go down as the official birth year of DFS in Europe. After years of reluctance, the iGaming operators have finally come to acknowledge that DFS is indeed a perfect response to the specific needs of the new generations, both in the skill and social aspects, and that not responding to these ever-accumulating needs could gradually result in a critical situation. Oulala is the partner that will allow them to offer DFS more quickly and easily on their site. 2017 will be a year of serious growth for DFS, and Oulala will definitely benefit largely from it.
Valery Bollier is the CEO and Co-Founder of Oulala. He worked for 9 years in media and online marketing and 12 years in online gaming. He is a regular speaker at industry conferences and seminars, as well as a contributor to various B2B publications. Valery is also a shareholder and former CMO of ZEturf.