Jake Paul in the boxing ring. Photo by Getty Images Jake Paul's new gambling venture, Betr, has raised $50 million in funding. He has described it as an attempt to create a "TikTokification" of gambling.
The combination of Paul's young fanbase and the nature of online gambling have caused some concern. Jake Paul's new sports betting venture, which launched earlier this month after announcing it raised $50 million in funding, is an attempt to create a "TikTokification" of gambling — an app where people can place so-called "microbets" as quickly as they would scroll through videos. Paul's mobile betting company, Betr, went live on September 2, and has leaned into a boom in internet gambling as laws ease around online sports betting and gaming apps flood the industry.
But the combination of Paul's young fanbase and the compulsive aspects of online gambling have led some experts to raise alarm about the rise of microbetting and apps like Betr. Paul, 25, rocketed to fame in the era where YouTubers began to achieve levels of fame usually reserved for A-list celebrities, and built up a relationship with his followers who saw him as authentic. Megan Kennedy Grundén, influencer marketing consultant at Ariel, told Insider that when Paul pushes a betting business, gambling is normalized to his fans.
"What these younger kids don't know is the reality of gambling — they don't understand how it works, how addictive it can be, or how the odds of winning are stacked against them," she said. "They think that playing is easy, that it's just a game, and that they're going to win big. It's going to create a lot of issues down the line if Betr becomes a success.
"Microbetting gives a sense of instant gratification much like social mediaA J. P. Morgan report from January estimated people in the US would spend more than $9 billion on sports betting by 2025, $7 billion of which would be on micro-bets, like what Betr is proposing.
Sports and entertainment attorney Adam Arnaout, the founder of law firm Arnaout Athletics & Entertainment, told Insider that Betr appears to be tapping into what makes gambling gratifying, and amplifying it even more. "To give users the ability to have somewhat of an instant gratification and experience that feeling of winning in more frequent intervals than was previously possible, I think is a really unique and valuable concept," he said. "People inherently want that feeling.
"Emily Hale, a social media analyst at business review site Merchant Maverick, told Insider that Paul's app seems to offer a rapid-fire way of betting that will give people a quick high and encourage repeated bets. "However you feel about gambling, this is probably a recipe for success," she said. "Especially for younger audiences who have a disposable income and aren't worried about their budgets.
"Betr has been rolled out as free to play while the company seeks approval in the states where gambling is legal. On the company's website, it states that "Betr understands that preventing underage gambling is vital and we take that responsibility seriously. ""We clearly communicate the legal age to gamble on our real money gaming products and conduct comprehensive identity checks to ensure real money account holders are 21 or older," it reads.
Paul's traditionally young fan base and 'TikTokification' raises concernsArnaout said the way a "TikTokified" betting app works means gambling is more approachable to the people who don't understand the intricacies of odds and placing bets in the bookmakers. "It opens the opportunity to people who might be curious about sports betting," he said. However, being more accessible "also means that you can lose quicker," he added.
Whether that means people will close out of the app out of frustration, or lose more and more money, nobody knows yet, he added. Grundén said she has concerns about the young people Paul still has in his fanbase, and who is really going to be seeing Betr advertisements. Imagine a teenager, Grundén said, who started watching Paul at 13, comes of legal age to gamble.
"Jake Paul has already fostered credibility and a trusting relationship with this viewer, so the viewer sees Jake Paul as his 'friend,'" she said. "Microbetting is introducing a new level of instant gratification within gambling, an already harmful industry, and it's being marketed to this young age demographic. "Insider has reached out to Paul's representatives for comment.
Since the start of his career, Jake Paul has appealed to kids and teens. Richard Shotwell/Invision/Associated PressPaul has more recently made a name for himself through a lucrative boxing career, where he has raked in millions through highly promoted fights against other celebrities and athletes. Outside the ring, Paul doesn't have the best track record.
For years he's been the self-proclaimed "problem child" and lived up to the label. Among his early problematic antics were terrorizing his neighborhood by driving loud motorcycles up and down residential streets and setting mattresses on fire in his back yard, and making sexually explicit content that is inappropriate for his target audience. He's also faced allegations of emotional abuse and sexual assault.
Paul has also been accused of "predatory" money-making schemes at several points in his career. He has aggressively peddled merch to this young fanbase and advertised "mystery boxes" to his viewers — mostly children and teens — where customers pay a set amount for surprise items. While designer shoes and iPhones are advertised, most gifts in the boxes are far less expensive, so the ventures have been criticized as being akin to gambling.
Add to this Paul's various failed business ventures, such as Edfluence and the Financial Freedom Movement, both of which promised his viewers tutorials and skills to become successful entrepreneurs, and disappeared soon after they launched. But the team Betr has assembled around Paul is promising, Arnaout said, which includes the former general counsel of the Miami Marlins baseball team. "He's one of the best in the business, so I fully trust him and the vision that he has to make sure they're compliant with everything legally," he said.
"But it will be really interesting to see how it plays out. "Read the original article on Insider.