Moving closer to Celebrate 2015, I had a chance to talk with Ken Manubay of Picking Duck. He is a serial entrepreneur who has started several retail and computer businesses. He and his friends have now taken their love of sports betting and made their way to Las Vegas.
Picking Duck is an attempt to filter out the slick marketing that goes with professional handicapping and level the playing field. Ken told me he wants his sight to be about results. He told me many of the pros spend huge amounts of money on promotion and the smaller guy who may be just as smart can't get noticed.
To be very clear, Picking Duck is NOT a gambling site. It's an information site much like any other social media platform where users exchange knowledge. Picking Duck is a place where users can make imaginary bets with "Ducks" given to them for free by the site and then have their picks tracked for success.
A user who consistently has a winning percentage above 50% is one to watch. Streaks are also tracked as they are important to those who wager. No one wants to follow someone who has lost several bets in a row.
The users can sell their information in the form of picks for a fee. That fee is not set and each user can ask for whatever price someone will pay. That's where the magic comes in. A well known professional as well as an unknown number cruncher can compete in the same arena with the same information and get paid for it. Picks available for purchase are made private by the seller and only revealed when bought. Otherwise, all picks are public.
The site makes its money on each transaction. If the purchased pick is a winner, the seller keeps 70% of the fee. If the pick is a loser, the buyer get 90% of the fee back.. There is a consistent cash flow on each transaction. As with all things in the gambling world, the house gets a cut.
Along with Ken, he has several friends who have come on board to make this happen. All expect Ken have their own jobs and are working on this project part time right now.
Charles Lising is the VP of Business Development. He is a creative technical recruiter who loves sports like Ken.
Chad Fune is the VP of Marketing. He started and sold a catering business. According to Ken, Chad was in the food truck game early before it turned into a hot fad. Chad's exit from the industry was very profitable and successful.
Mike Bootanom is the VP of Operations. He doesn't have a LinkedIn account. The link is his Facebook page.
There are no listings on Angel.co or Crunchbase.com for Picking Duck. Ken said the entire process so far has been self-funded. They are definitely searching for seed funding to scale right now. Ken told me they have met with an interested professional poker player, and Las Vegas is the perfect home for them.
Picking Duck in not a peer to peer betting app. Ken said there are similar site in Europe where sports betting is a little more accepted. Those sites are primarily focused on professional handicappers. This looks like a game picking service on a crowd sourced level. While not a true crowd source model, Picking Duck is allowing people to become independent sports match makers like Steve Stevens in the CNBC series Money Talks.
There are tax implications for users who become well skilled at picking winners and sell their picks. The IRS could tax these individuals like poker players get hit. This could mean more administrative layers for Picking Duck that could hurt net margin if they are forced to regulate it on the site.
From a regulatory perspective, I expect some gov't intrusion into this idea. Someone with some power and influence will catch wind of this concept and believe it to be an online booking service. Most states don’t allow online book making. Picking Duck will need to stay ahead of the curve on this issue. Proper research of this model will answer any concerns about legality provided uninformed media doesn’t overreact. I asked Ken about this. He said he would respond to the question by saying "We sell information, and selling information is not illegal."
This interaction is where Picking Duck can really create its user experience. Being proactive and reaching out to govt agencies first to address any possible legal issues could really endear the brand to people.
Picking Duck must focus on administering an objective platform where users can interact with each other. The primary issue with gambling is that someone might gain access to information found nowhere else and thus will have an unfair advantage over others. If the exchange of “insider” knowledge is at the user level, Picking Duck can simply counter any accusation by saying they are a social platform providing a listing service and apply proper language algorithms to monitor unethical behavior.
Gambling is a major industry. It’s also cutthroat and brutal. Participants care only about results. If someone can consistently pick winners, there is money to be made. Plenty of booking sites, beverage companies, event planning services, and restaurants would advertise here. Building the community into a solid performing group could also lead to partnership opportunities in Las Vegas and Atlantic City.
The thought of someone selling their picks intrigues me. Many people believe they are smarter than the professionals in Las Vegas. Some people really are, and Picking Duck is their chance to prove it. I have no doubt there will be certain people who will see this as a quick investment opportunity.
Tracking the users with above average winning percentages and then buying their picks could be a profitable model for a sports fan with money and a desire to gamble, but no drive to really dig into the process of what it means to place winning bets. Ken said this is the point of the site. Amateur sports bettors can go head to head with pros, get noticed, and make money.
I have always said math wins. I am certain there are many unknown brains out there who are smart enough to have developed their own algorithm that picks winning teams a majority of the time. A real sport bettor would be happy with a win more than 50% of the time, and they would pay handsomely for a better winning formula.