
Launch HN: Balto (YC W19) – Fantasy Sports People Bet On - spencercassidy
Hi everyone! We’re Spencer, Nick, and Joel, co-founders of Balto (<a href="https:&#x2F;&#x2F;www.playbalto.com" rel="nofollow">https:&#x2F;&#x2F;www.playbalto.com</a>). We develop tools for users to organize fantasy sports games that people bet on. Yes, we said it, betting! March Madness brackets, NFL survivor pools, PGA pickems and more.<p>With laws changing, sports gambling is becoming a reality in all states. Last year, 60M brackets were filled out with over $10B dollars wagered for March Madness. This is just one subset of the market we’re going after. Despite these figures, games such as brackets, survivor pools and pickems continue to be overlooked while cumulative wagers climb to an estimated $20B+.<p>Sports run in our DNA. We’re former athletes that come from sports families—Nick’s the son of Hall of Fame Quarterback, Joe Montana. With sports deeply embedded in our lives, we always wondered what happens beyond the playing field the three of us met on.<p>For years, we ran sports betting pools and leagues for our friends, co-workers and others as a hobby. Things began to take off dramatically, but posed a major problem. The software that we used was outdated and not conducive for managers (ourselves) or the bettors (users). We saw this as a major opportunity to go after due to the gambling laws and space evolving.<p>Within a few short months we’d built an enhanced platform for managers and bettors to play on: Balto. Not only did we notice high retention amongst our users from game-to-game, but the increased social interaction and engagement amongst peers made our platform more sticky.<p>Aside from Balto, the current options for users are third-party websites or large antiquated media companies, which aren’t betting or gaming companies. These platforms prioritize content and ads over a great UX, and completely miss on delivering the social interactions inherent to what makes playing these games (with your friends and family) so much fun.<p>We aim to become the go-to platform that aggregates all betting pool games for casual fans and gamblers. We&#x27;re putting the user experience at the forefront of the product by enhancing the social experience for users, the management tools for league organizers, and placing all of your favorite games onto one, mobile-first platform. It’s a tall task, especially when factoring in the laws, but it’s a space we’re beyond passionate about.<p>To test the product, feel free to visit www.playbalto.com. We’re currently running a free to play March Madness Challenge!<p>Feedback is more than welcome, don&#x27;t hesitate to share in the comments. We&#x27;re eager to hear your thoughts, ideas and experiences in this space. Thanks!
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soared
I would've expected yc's mission statement to shed some light on how they
justified funding a bookie. Turns out yc has no ethical/moral/etc grounds in
their mission or about us. Spend your money how you see fit, but I would've
hoped you'd build some ethics into your business.

[https://www.ycombinator.com/principles/](https://www.ycombinator.com/principles/)

[https://www.ycombinator.com/about/](https://www.ycombinator.com/about/)

(For context - I've worked closely with a number of large betting websites
like mybookie.ag. 100% of my contact with them has been toxic. My employer
explicitly does not fire clients but an exception was made after I recorded a
call with them. Similar situations occurred freelancing.)

~~~
slap_shot
What exactly is your qualm with them investing in this company?

If you have a problem with gambling, take that up with your legislators. But I
wouldn't expect you to have an issue with gambling, since you, ya know...
literally earned a living working with the incumbents.

~~~
everdev
> If you have a problem with gambling, take that up with your legislators

Legal != Ethical

It's perfectly reasonable for people to be upset about things that are legal.
In fact, almost every new law originates under those conditions.

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slap_shot
I guess it isn't clear to me what this actually does.

Every year I do a March Madness pool, a survivor pool, a couple fantasy
football leagues, a college pickem, a superbowl grid, and a half dozen NFL
game bets.

The idea here is that I should do some of or maybe all of these on this
platform, rather then the various other ones I use?

I think the major platforms of these are pretty good, we use a smaller one for
a college pick em that is pretty bad but we tolerate.

Is the value add here just the the UI is nicer and doesn't have ads? Or is
there something else I'm missing?

I'm doing a vegas march madness with friends and I'll see if we can use Balto
for our pools.

Congrats on the launch!

~~~
mark212
I think the point is to integrate the money with the bracket, and have it
update live and accurately. I assume none of the existing platforms you use
take money, hold the pot, and disburse to the winner?

~~~
philipodonnell
> I assume none of the existing platforms you use take money, hold the pot,
> and disburse to the winner?

To be fair, there's a good reason for that! [0]

But its not clear that's what's happening. Usually with grey area startups
there's a section that at least attempts to describe why they are not running
afoul of the law. This site under legal information is just a privacy policy,
so, yeah I guess they should spend a bit more time explaining how they will
make money. Ads?

[0]:
[https://en.wikipedia.org/wiki/Parimutuel_betting](https://en.wikipedia.org/wiki/Parimutuel_betting)

~~~
Nicky_Montana
We'll make money through affiliate marketing and premium features. We're
strictly a technology company and don't touch or handle any money.

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throwaway724
Posting anon due to industry reasons.

How in the world was this invested in?

1\. It's unclear how, at least in the context of March Madness, this is
preferable to any number of alternatives. Given that they don't touch money,
it's functionally equivalent to either running an offline pool, or using an
existing site with years upon years of consumer behavior and content
integration like CBS, ESPN, or Yahoo!. Better UX? Yeah, maybe, but there are
dozens of companies that have tried and failed on that premise in the fantasy
space: FleaFlicker, Sleeperbot, and on and on. Some guy from the Apprentice
had a company doing exactly this and spectacularly failed. People go where
they already go as a habit, not to some new destination.

2\. On the other formats, I'm skeptical that you'd have enough people willing
to join pools around The Bachelor or what have you, or else you'd see it
already. Even if I'm wrong, you run into the problem of (#3) plus generally a
scale problem; that maxes around at a very low total unique visitor count.

3\. Under the thesis that this might eventually turn into a platform that
accepts and handles money, that seems extremely unlikely if you've seen how
skin regulation has gone now that NJ is up and legalized. I can't see a world
where an existing license holder would take a flyer on this when you've got
the FanDuels and the DraftKings (not to mention the inevitable strong European
entry in the market) with vastly larger budgets and user databases to
leverage. Further to that, in the event these guys take off, there's
absolutely no reason why those companies wouldn't just replicate this
functionality. Anyone who follows Europe knows that over time, features
diverge to parity.

It's going to be a dickish statement, but I don't see how it's not 100% true:
there's no way this gets invested in if this kid's dad wasn't Joe Montana.
Literally the only logic I could theoretically buy is that the name
recognition of Joe Montana + YC would give them a shot at a license in a
multi-skin state where a lower-end holder would be willing to give them a
shot. Free to play either as a service (Chalkline, Sportcaller) or as the end
game unto itself (#1, #2) is dead on arrival.

~~~
elpakal
Joe Montana having a VC firm probably helped

~~~
throwaway724
Plenty of current athletes with lots of money to burn as well. I can count on
one hand how many cases I've seen an athlete actually be value-add; in most
cases they're the dumbest of dumb money who vastly overrate the influencer
value of their social network.

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slm_HN
>Sports run in our DNA. We’re former athletes that come from sports
families—Nick’s the son of Hall of Fame Quarterback, Joe Montana.

I'd be more impressed if you had the sons of Johnnie Cochran and Jackie
Chiles. This idea, "Let's make money on internet gambling" isn't novel, it's
just been a legal nightmare in the USA. And while it's no longer clearly
illegal on a federal scope every state will have their own ideas.

Washington state, for example, made online poker a felony long before the
federal government got around to closing all the sites. Even now the Native
Americans have introduced a bill making sports books illegal in Washington,
except on tribal lands, of course.

~~~
spencercassidy
It's definitely a challenging space with the law. However, we're confident
with the direction things are moving state by state --but it'll certainly take
time and run its course through complexities.

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aloukissas
The name is REALLY interesting to me as a Greek: in greeklish (using
latin/english characters to transcribe greek ones -- pretty common before
unicode caught on everywhere), "Balto" reads like "Valto". Now, "Valto"
loosely translates to "score it!", and it's a famous snippet of a sports
commentator, where he was talking to a football (ok, _soccer_ ) player about
to score a very important goal.

Good luck guys!

~~~
adam
"Balto" was also the name of Elizabeth Holmes' (of Theranos fame) dog:

 _For Holmes, the dog represented the journey that lay ahead for Theranos. As
she explained to colleagues at the company’s headquarters, in Palo Alto, he
was named after the world-famous sled dog who, in 1925, led a team of huskies
on a dangerous, 600-mile trek from Nenana, Alaska, to remote Nome, Alaska,
bearing an antitoxin that was used to fight a diphtheria outbreak. There is
even a statue of Balto in New York’s Central Park, Holmes told one former
employee. The metaphorical connection was obvious. In Holmes’s telling,
Balto’s perseverance mirrored her own. His voyage with the life-changing drug
was not so different from her ambition._

[https://www.vanityfair.com/news/2019/02/inside-elizabeth-
hol...](https://www.vanityfair.com/news/2019/02/inside-elizabeth-holmess-
final-months-at-theranos)

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noer
I know paypal won't process transactions where users mention that the payment
is for fantasy sports or brackets. I'm assuming it's for some kind of legal
reason. Why is Balto allowed to process transactions for sports betting?

~~~
nodesocket
I've been thinking about this as a startup idea for a few years now, every
time I gave up because of legal concerns and regulations. Stripe also does not
allow betting. I am guessing Balto had to use a payment provider that works
with adult and gambling companies... Most likely international (yikes).

~~~
Nicky_Montana
We're strictly a technology company and don't touch or handle any money. Our
emphasis is on the user experience and driving engagement through social
interactions on our platform.

~~~
noer
So, it's software to organize bracket/survivor/whatever pools and whomever is
using it would have to make sure money is collected and payment is made? The
void it fills is that existing fantasy services don't do brackets and survivor
pools?

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yazr
> With laws changing, sports gambling is becoming a reality in all states.

What is the current status in the US? Isnt it federally prohibit, in addition
to state level regulation ?

And i any case, dont u have to be specifically registered (and i guess taxed
and fee-ed) for various betting activities ?

~~~
spencercassidy
+1 to the comment below. Last May, the United States Supreme Court ruled 7-2
that a 25-year-old federal law that prohibited sports betting outside Nevada
is unconstitutional - allowing states to pass their own laws either allowing
or prohibiting betting on professional and college sports. Here's a link
discussing this as well as new states that have opened up to sports betting:
[https://www.cincinnati.com/story/sports/2019/02/21/state-
sta...](https://www.cincinnati.com/story/sports/2019/02/21/state-state-
sportsbooks-legalized-sports-gambling-tracker/2938122002/)

~~~
throwaway724
Great, but how does that impact you? How are you going to edge companies who
are much larger than you, for the finite number of skins allowed in each
state? What's your plan for working with the regulators, including the
necessary amount of lobbying and retail adjacency you need?

Just saying "Well, we can eventually become a paid host of these games" isn't
enough and you haven't done that; just because it's now legal in a singular
state doesn't mean that just anyone will be able to get licensed and
regulated.

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fernicolo100
Interesting. I have been playing NFL with crypto at
[https://cryptocup.io](https://cryptocup.io) and now are doing soccer. Idea
similar, but using crypto and smart contracts. Great UX as well

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shafyy
Not only does it blow my mind that betting is legal, states run their own
goddamn lotteries and made more than $70 billion of revenue doing that in
2014. [0]

I'm pretty sure lotteries have destroyed more lives than all of the drugs
combined.

0:
[https://www.theatlantic.com/business/archive/2015/05/lotteri...](https://www.theatlantic.com/business/archive/2015/05/lotteries-
americas-70-billion-shame/392870/)

~~~
carlosdp
That's quite a claim, what makes you think state lotteries ruin any lives at
all? Per capita lottery spend was at just $225 a year in 2016 [0], so no one
is going broke playing the lottery, and the revenues typically go to state
programs around education.

[0] [https://www.washingtonpost.com/business/2018/10/23/per-
capit...](https://www.washingtonpost.com/business/2018/10/23/per-capita-
lottery-spending-has-doubled-since)

~~~
MRD85
Per capita may be $225 but gambling isn't distributed evenly through the
population. I live in a country with very relaxed laws and I've seen the
social problems that unrestricted gambling leads to.

~~~
subjectHarold
And those problems exist whether you ban gambling or not. Do you think that
no-one is addicted to heroin because it is illegal? It is kind of farcical.

If you regulate gambling properly, you actually have tools to control harm. If
you don't, then you are increasing harm.

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seibelj
I suggest email signup, I refuse to do social media login, but I know HN users
are not the norm with that...

~~~
pedalpete
This was a huge request on our app as well, we did it, and about 10% of our
users are email sign-up.

On the flip side, when/if you do decide to go with email sign-up, be prepared
that users who once signed-in with their social media account will start
signing in with their email address and expecting it to work, even though they
never showed a password.

It seems to me users use the same social media service to sign into most
services, so they don't get confused between facebook or google login buttons,
but give them an email field, and they get confused as to how they have been
signing in in the past.

Anyone else seen similar behavior? Or is it just us?

~~~
kodablah
We're venturing a bit off topic here, but yes I can understand a user with
many logins on many sites may not remember which they used on yours. You can't
really remind them on failed login without subjecting yourself to leaking that
a user is a member of your service (or full blown user enumeration attacks).

In these cases where social logins are the primary approach most users use, I
suggest making the email login look like a social login button, but make it
clear it's email (i.e. more than just an icon) and trust only the few I-never-
use-social-login users will leverage it while not confusing the others.

~~~
Nicky_Montana
This is great advice, thank you!

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fernicolo100
a

