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Launch HN: Balto (YC W19) – Fantasy Sports People Bet On
30 points by spencercassidy 31 days ago | hide | past | web | favorite | 55 comments
Hi everyone! We’re Spencer, Nick, and Joel, co-founders of Balto (https://www.playbalto.com). 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.

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+.

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.

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 The software that we used was outdated and not conducive for managers (ourselves) or the bettors (users).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.

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.

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.

We aim to become the go-to platform that aggregates all betting pool games for casual fans and gamblers. We'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.

To test the product, feel free to visit www.playbalto.com. We’re currently running a free to play March Madness Challenge!

Feedback is more than welcome, don't hesitate to share in the comments. We're eager to hear your thoughts, ideas and experiences in this space. Thanks!




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/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.)


YC funded a "crapware-bundling as a service" startup named InstallMonetizer. (And briefly had YCers defending this in comment threads on here)

They'll do anything that potentially makes them money.


YC states their lead ethical underpinning in the first line of their Founding Principles: "Startups are on balance a good thing." They go further in describing their goal to support and advise founders; and include phrasing about their philosophy of being "benevolent" to founders. Their Principles also describe prioritizing mission-driven endeavors over money. You or I may not share their ethics, but they have theirs.


Those are not ethics.


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.


> 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.


My problem is not strictly with this company, I was just surprised to see that yc has not a single mention of ethics/morals/anything around what type of companies they'll invest in. Most big tech companies at a minimum put on a facade that they have ethics.

edited for clarity


Out of curiosity, why do you view gambling as unethical and/or immoral?


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!


Hi there happy to answer this! We’re a tech company focused on allowing users to create and host all bracket-style, survivor pool, and pickem-style games for all sports! (Think March Madness brackets, NFL survived pools, PGA pickems). We even do brackets for The Bachelor and Game of Thrones! Unlike the media sites who built these games to push content and ads, our focus is on the user experience as it pertains to those playing in games, those managing games, and enhancing the competitive social interactions that have been lost on other sites.


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?


> 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


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


Yeah, we pay out the winner using Venmo.

I signed up and made a pool but it wasn't immediately obvious to me that the funds are transacted through them.


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.


Joe Montana having a VC firm probably helped


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.


As opposed to the usual rigorously meritocratic VC funding decision, where they scan the application for the words "Stanford" and "Harvard" instead of "Joe Montana."


>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.


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.


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!


"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...


Love hearing this! The name originated from a Siberian husky and sled dog (Balto) who led his team on the final leg of the 1925 serum run to Nome to stop the deadly diphtheria epidemic. Given one of our challenges is a 'survival pool' we thought it was fitting as you must be the 'leader of the pack' during the long race to win/survive the challenge.


Thank you for the kind words! We love the name Balto as well :)


Not bad. I like this idea of investing, maybe it will interest other people. You absolutely rightly noticed that pools of bets on different kinds of sports are becoming very popular in every country in the world. In particular, the analyst and the rate of e-sports is gaining momentum, since it is a feature of modern society. It reminds me https://mid.bet/bets/live and there is the possibility of bets against other players on the same odds. I am sure that such projects will become the highlight of bookmaker bets.


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?


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).


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.


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?


> 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 ?


Not anymore, the US Supreme Court struck down the 1992 law prohibiting sports betting at a federal level [1]

Now, it’s up to each state to decide if and how they want to legalize it. New Jersey is actually the reason this went to the Supreme Court, and you can now take wagers within NJ if you have a physical operation in Atlantic City [2]

[1] https://www.supremecourt.gov/opinions/17pdf/16-476_dbfi.pdf

[2] https://www.nj.gov/lps/ge/sportsbetting.html

Edit: adding a link to the NJ sportsbetting rules


+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...


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.


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


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...


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...


That's like saying because per capita beer consumption is 75 liters per year there are no alcohol-related problems.


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.


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.


Before state lotteries, there were numbers games run by various organized crime groups and independent operators.

And before that, there were other forms of gambling.

The only difference is where the money goes.

Drugs and alcohol have destroyed far more lives, I can say that with absolute certainty. Drugs are not cheap, plus the drugs affect your judgement/health/family to a far greater degree than just gambling. Just compare the amount of treatment programs for both, etc. It's not even close.


What I'm saying is that gambling should not be legal. I don't know if it's worse than drugs and alcohol (my initial claim is definitely a hyperbole), but it's definitely not good. Just step a foot inside a casino and look at what kind of people spend their days there.

I'm sure there are ways to handle this issue without it leading to the uprising of organized crime.


Rates of gambling addiction are tiny compared to other kinds of addiction (0.5-1%).

More to the point though, the absolute worse way to help people who are sick is to criminalise their sickness. By legalising gambling you can generate money to invest in harm prevention.

The way the US approached the issue has led to terrible outcomes for gambling addicts, funding for organised crime, and has led to the creation of a powerful lobbying groups (in Las Vegas Sands/Adelson) that obstructs progress.

It is kind of bizarre to see these comments in the 21st century. For the rest of the world, these issues have been solved.


The second worst way to help people who are sick is to flood the market with their addiction, and then justify that as a way to essentially redistribute money from the desperate and the stupid, to the rich and cruel. That the latter then shares a cut with some half-asses public programs doesn’t change the way the money was made.

Don’t make it illegal, but don’t encourage it. I support total legalization of all drugs for example, but not advertising them or encouraging people to take a vacation to a shooting gallery.


...but that isn't occurring in any regulated markets. The reason that is happening is because, in the US, this is a grey area. The process has been captured by casino operators (btw, a casino operator is one of the largest Republican donors) and, ironically, they have co-opted religious groups who are saying the same stuff as you (religious groups have given up on LV but casino operators like these groups shutting down the competition).

Every regulated market has removed the incentive completely for organised crime. In addition to substantial harm reduction measures that actually make it easier for addicts to get help (where I am, gambling addiction charities are well-funded to an almost obscene level i.e. probably $100m+ in a country with a population of tens of millions) and work with operators to exclude these people from any form of gambling. Again though: this isn't unknown. Lots of countries are doing this, you just need to know about the world beyond your small corner.


You’re talking just about casinos while ignoring, for some reason, lotteries and scratch cards. Framing this as regulatory or political capture is laughable when prior to the internet taking off, state and national lotteries were the most common form of gambling in America.[1] After the internet became the go-to... guess what lotteries are still far and away the top.[2] In fact lotteries being in more revenue than all Indian and commercial casinos combined.

This isn’t about organized crime, it’s not even about private enterprise. This is about taking money from people who predominantly cannot afford it, in the context of shitty educations and stagnant wages. It’s not about “Vinny” breaking legs, it’s Uncle Sam. I’d add that “Harm reduction” is fine in the context parties who don’t directly profit from the harm, and in the context of readily available and high quality treatment.

Getting out and around and learning about the world at large is good, but in the absence of a strong foundation of knowledge about your own “corner” it’s just empty puffery trying to sound worldly.

[1] https://news.gallup.com/poll/3769/lotteries-most-popular-for...

[2] https://en.m.wikipedia.org/wiki/Gambling_in_the_United_State...


I'm not saying we should criminalize gambling. There's a whole spectrum of policies between fully legal and completely illegal.

However, I don't agree with the notion that spending revenue from immoral sources on "good" causes warrants the immoral source.

Edit: Typos


Yep, that is the point...there isn't a spectrum. Countries that have tried to take the middle ground, like the US, have ended up with a political system that is bought and paid for by casino groups (because they are often the only vested interest in semi-regulated markets, another possible comparison is Hong Kong but that is more complicated). Afaik, the only non-theocracy with regulations that as severe as the US is South Korea (military dictatorship within living memory).

There is nothing immoral about gambling. Smoking and alcohol are infinitely more harmful, are they immoral too? On what basis? If you enjoy gambling, fine...good for you. Addiction affects a tiny proportion of the population, under 1%. And we can reduce this by being adults, and working with operators on harm reduction rather than judging people. The implication that people who gamble or gambling addicts are immoral is quite sad. It is common to most theocracies but these are usually places that will rail against immorality of things like gambling and then drop bombs on their citizens the next week. Moral authorities indeed.


What makes you think people wouldn't otherwise blow their money on something else if they couldn't gamble? The next high for them could be any other sort of get-rich-quick scheme, or state sanctioned addictions like alcohol and cigarettes. Why do you think it's up to the state to tell people they can't waste their money or ruin their own lives?


I'm not sure about that - there were ~70,000 deaths from overdoses in the US alone in 2017.

https://www.cdc.gov/media/releases/2018/p1221-complexity-dru...


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


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?


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.


This is great advice, thank you!


That's exactly why we steered clear of adding email sign-ups in addition to our social auth. When we had both, it caused a lot of confusion, especially given the small percentage of sign-ups via email.


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