Ted Gantzer and Nick Peters were just a couple of poor, unemployed Denver residents when they set out to create a sports betting app — not exactly a novel idea.
That was two years ago. The 31-year-olds are still poor — “really poor,” Gantzer says — but after a lengthy battle with Apple, their BarBets app is now available in both the iTunes and Google Play stores.
The free smartphone program allows sports-bar patrons to place non-money wagers on games from major sports, and if their friendly bets pan out, they win discounts on food and drinks. The former college buddies also award monthly prizes, such as StubHub gift cards, to the BarBets user who scores the most points.
“It’s all of our hobbies and vices thrown into an app,” Gantzer said. “We like bars, gambling and sports.”
They have partnerships with about 10 Denver-area sports bars, including Breckenridge Brewery, Sports Column, Jackson’s and Stoney’s Bar and Grill. The pubs pay a $50 monthly fee and provide the prizes.
Users can place bets for the monthly award even if they’re not at a participating bar, but points are doubled if their smartphone GPS shows that they’re at one of the partner locations.
BarBets isn’t yet profitable, a reason Gantzer recently had to move in with his brother, and Peters had to look for work at a local sports bar.
But getting a gambling-related app into the iTunes store is no small feat.
Last year, Apple toughened its approval guidelines on gambling apps, stating that real money gaming programs “must have necessary licensing and permissions in the locations where the App is used, must be restricted to those locations, and must be free on the App Store.”
While BarBets doesn’t feature real money, Apple rejected the app five times before approving it this year.
“If you run to the press and trash us, it never helps,” Apple states in its developer guidelines.
Gantzer and Peters didn’t run to the media, but they did burn through more than $80,000 to continually update the program for Apple devices while the app was in review. They also spent a lot of time and money to secure the necessary legal approvals.
The money came from an angel investor in Texas. They met him through a business-plan competition at the University of Colorado Denver, where Gantzer is working on an MBA.
As for the legal clearance, the pair received assistance from Noodles & Co. founder Aaron Kennedy, who serves as Colorado’s chief marketing officer. Tom Weigand, who helped Kennedy launch the restaurant chain, is Peters’ uncle.
“The guy who wrote the gambling law for Colorado wrote an opinion piece saying that BarBets is legal in Colorado,” Peters said. “You’re not risking anything.”
While they paid $450 an hour for the legal work to appease Apple, the opinion ended up helping Peters and Gantzer land partnerships with bars and restaurants.
“Our initial reaction was, ‘We want to see all the legal paperwork to make sure that it’s OK,’ ” said Stoney Jesseph, owner of Stoney’s in Denver.
Jesseph calls BarBets a fancy “bounceback,” a program that helps increase repeat customers.
“It’s a way for our guests to have a little bit of fun, get something for free and come back and use (the discount) at another time,” Jesseph said.
Without much publicity, the app has been downloaded more than 1,500 times and averages 40 to 50 users per week, Peters said.
Though it faces an uphill battle in the crowded app marketplace, the program’s target audience is expected to surge.
There were 63 million unique users of mobile gambling services worldwide in 2013, according to Juniper Research. The market research firm says that figure will jump to 164 million by 2018.
In addition to the monthly $50 subscriptions paid by participating businesses, BarBets generates revenue through in-app advertising.
Gantzer and Peters are landing the marketing deals by cold calling and the bar partnerships through walk-in sales pitches. Their dream is to land a deal with a national chain, such as Buffalo Wild Wings.
“Ultimately, to survive, we’re going to have to get out of Denver,” Peters said.
Andy Vuong : 303-954-1209, avuong@denverpost.com or twitter.com/andyvuong
