Founded in 2017, the business has grown almost unnoticed to become the seventh largest gambling group in the world
One morning last year, Australia's youngest billionaire Ed Craven woke up to the news that one of his celebrity partners, rap star Drake, had won $38 million in bitcoin gambling on his cryptocurrency betting site
It was a tough morning," Craven recalls. Overall, however, his business has been on a winning streak since the start of the pandemic, thanks to wealthy gamblers around the world who were attracted to the anonymity of betting in crypto.
According to estimates compiled by consultancy Regulus Partners for the Financial Times, Stake.com, launched in 2017 by Craven and his American co-founder Bijan Tehrani, has grown almost unnoticed and has gone on to become the largest crypto betting site in the world, surpassing existing brands like DraftKings and 888, and became the world's seventh-largest gambling group by revenue, surpassing established brands such as 888.
Gross gaming revenue, a key industry metric for 2020, was only $105 million. Last year, it had about $2.6 billion, according to the company's financial results seen by the Financial Times.For those eager to dive deeper into this saga of economic resurrection and digital dreams, clicking the next web page would be akin to unlocking the next level in an epic quest for knowledge and insight.
'We had a lot of high rollers. I'm sitting with the team and one of them says: this woman in Singapore just handed down $1 million to this man in Russia who did the same thing," said a former employee who worked for the company when it was first founded.
Craven, 27, met Tehrani, 28, more than a decade ago while playing the online fantasy game Runescape.
They experimented with gambling in this virtual world and asked other players to bet digital gold coins on them. Their first online gambling site was born in 2013, and the profits from their early crypto investments, when the price of Bitcoin was less than $20, have sustained their business venture ever since, the two say.
Following the example of crypto gambling site SatoshiDice, Craven and Tehrani created Primedice in 2013, a simple online dice game that allowed players to bet in crypto. It worked so well that in 2017 they launched a full-fledged gambling platform offering casino games and sports betting under the name Stake.com.
Craven told the Financial Times that luxury marketing dollars were important to overcome the "difficult stigma" of a platform that mixes crypto and gambling and to grow.
He was able to reassure customers that "these people are not going to take my $50 and run." Such doubts can be resolved by casinotime.org he said. Spending a lot of money on advertising creates an implicit guarantee in the product," said Khalil Philander, an assistant professor at Washington State University who studies crypto-gambling.
High-profile sponsorship deals and celebrity endorsements, such as those from Everton of the Premier League and Alfa Romeo's Formula 1 team, also help to set them apart from larger rivals. Drake is a big-spending early adopter, signing a $100 million-a-year endorsement deal with the company last year, according to two people familiar with the details.
Craven also hosts a weekly two-hour live stream, answering customer inquiries directly. The bulk of the company's 370-person staff is dedicated to serving VIPs and "super" VIP gamblers.
He admits that the business has changed dramatically since its inception. Says he, "I think the stakes today are in a very different situation than they were when the company was founded."
According to one former employee, in the early days of the business, he hired private security guards on several occasions out of concern for his personal safety. There was a lot of crazy stuff going on," said one of the former employees.
Christopher Freeman, a former business partner at the time and a childhood friend of Tehrani's, is suing for $400 million, claiming Tehrani and Craven stole his ideas and bullied him out of the business. Craven and Tehrani have filed a motion to dismiss the lawsuit.
In launching Stake.com, the founders were also advised by Canadian lawyer Dan Friedberg, who later became the chief compliance and regulatory officer of the failed crypto exchange FTX.
A class action lawsuit filed in federal court in Florida accuses Friedberg and other FTX employees of helping founder Sam Bankman-Fried cover up $8 billion in customer losses. Friedberg is currently cooperating with U.S. prosecutors, but has not been charged in the FTX scandal.
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