Derby Games Gambling Site Raises $6.5 Million in FundingDanielle Burger
Derby Games, an online betting service for horse racing, closed its first financing round, raising $6.5 million in funding.
The financing was led by Bullpen Capital Managing Director Paul Martino, who was also an early investor in Zynga Inc., according to a Derby Games statement on Wednesday. Martino is joining the board of the company, where “Freakonomics” co-author Steven Levitt is a special adviser.
The New York-based gaming company will invest in mobile applications and develop more horse-race betting games, co-founder and Chief Executive Officer Tom Hessert said in a telephone interview. The company’s current game, DerbyJackpot, has paid out more than $15 million in winnings since its launch in 2013, he said. The company processes about $20 million in bets a year, and Hessert says its user base is growing quickly.
“When poker was taken offline in 2011, we saw horse racing as the only legal way to place bets on mobile phones,” Hessert said. “We have hundreds of thousands of people playing the game.”
DerbyJackpot, which lets gamblers watch and bet on live horse races at more than 100 U.S. tracks, is designed to reach younger consumers than are typically associated with the sport. Hessert says its core users are 25 to 35 years old, with 75 percent having never bet on a horse race before. The mobile website, which uses horse animations and has a large social component, is legal in 37 states.
Derby Games is not yet profitable, Hessert said. Other investors include Martin Lautman, partner at Musketeer Capital, and Bill Pescatello, partner at LightBank.