Show #71 – Founder of Sharp Alpha Advisors Lloyd Danzig Joins the Show to Talk Sports Betting AI, Investments & Kobe Bryant

In episode #71 of the Knup Show, sports betting industry speaker, advocate and expert Lloyd Danzig joins the show. We talk about AI as it relates to betting, advisor roles & opportunities, as well as a small tribute discussion to the late Kobe Bryant.

Show notes from Lloyd Danzig founder of Sharp Alpha Advisors Interview

Ryan Knuppel: Today, we are joined by one of my favorite people, and one of the smartest guys in the sports betting industry. Lloyd Danzig joins us on the show. He talks about artificial intelligence as it relates to sports, betting along with a little tribute to Kobe Bryant.

Ryan Knuppel: This is crazy, this is crazy. Everywhere you turn it’s the same old sports talk, the same headlines, the same news and the same boring information. This podcast is here to change all of that. We bring you hot sports takes, winning sports betting strategy and picks, reliable gaming industry news, and breaking interviews with some of the biggest names in sports business. My name is Ryan Knuppel and welcome to the Knup Sports Show.

Ryan Knuppel: All right, welcome back to another episode of the Knup Sports Show. I’m your host, Ryan Knuppel, with you here each and every time. I really appreciate all you listeners tuning in to this show. We’re having a good time, always talking sports, always talking sports betting. And bringing on guests that are really relevant to this industry and this area, and today we have one that really is super relevant, you’ve probably heard of him. Lloyd Danzig joins me today. Lloyd, are you on the line?

Lloyd Danzig: Yes. Ryan, thanks so much. Great to be here. Always great when we get to catch up, whether it’s in person or digitally.

Ryan Knuppel: Absolutely, Lloyd. I met Lloyd back at Betting on Sports America 2019 and I’ve seen him at several conferences since. Lloyd’s a speaker, lloyd is an advisor, owns his own company, doing a lot of things in the AI space. Lloyd, tell us a little bit about your background and what you’re up to these days in I guess, this iGaming world.

Lloyd Danzig: Yeah, sure. So, thanks a lot. And that’s exactly right, you kind of hit on it. I have a unique passion and expertise at the intersection of AI and sports analytics, sports tech and sports gaming. And in my life I sort of wear two hats these days. I run a 501(c)(3) nonprofit dedicated to ethical issues in the AI space. So, concerns over deep fake technology and facial recognition and things like that. And it’s an awareness-based organization. We have a newsletter and a podcast and we’ve put on events and do consultations.

Lloyd Danzig: And then in the gaming space, the reason that you and I cross paths so frequently is, I run an advisory firm here in New York City for early stage startups that need help with pretty much anything and everything. Or investors, financial institutions, angel syndicates and the like, who are trying to deploy capital and get exposure into those companies.

Lloyd Danzig: And really the only common thread I require is, I don’t only work with companies using AI, but they have to be using tech in some kind of cool way. Either a new application of an old technology, a novel application of a new technology. And I’ve pretty much helped both of those parties through the inception and initiation phase, getting their pitch deck together, formulating their business plan. Up through fundraising, through integrations, acquisitions and hopefully on and up to bigger and better things later on.

Lloyd Danzig: But it’s great to be here and Ryan, you and I crossed paths so much at these conferences because like you said, the interest in AI in gaming [inaudible 00:03:09] technology is going to shape this new American market, is definitely top of mind for a lot of people.

Ryan Knuppel: Oh, wow. Amazing. I mean, you’re involved in so many things and doing a great job at, I guess, being an advocate almost for this gaming and sports betting landscape. One thing, I’m a content guy, right? I’m a content guy through and through. That’s what we do, we do content at its core.

Ryan Knuppel: And I think you have a little hidden talent here in the content space, Lloyd. I mean, some of your articles that you put out, I mean, I follow what you do. I follow some of the articles you write. And I mean, these things that you put out, this is way off-topic, but these things are like 200,000 words or something crazy like that. How do you put together such … I know you’re not content guy through and through, but how do you put together such awesome content?

Lloyd Danzig: Yes, I appreciate it. And you’re right, I do have a few Medium articles recently that have … One on SportsHandle as well, that got a lot of traction and are all estimated at 20 minute reads than up. So I appreciate it, I’m surprised that anyone even has the patience to do this.

Lloyd Danzig: So look, I think and what you’ll agree with I’m sure, any of your other guests will agree with and what your listeners will agree with, is that when you’re really passionate about what you’re working on and what you’re doing, it certainly doesn’t feel quite like work. And I’m sure there are a ton of people out there who maybe are or are not listening to this, for whom taking data science techniques and financial analytical techniques, and things that are used in the business world, and then overlaying those on your truest passion, which is being a sports fan and the comradery that comes with fanhood and all that, it doesn’t quite feel like work.

Lloyd Danzig: And so generally these articles come because they’re topics on which I speak in front of large audiences many, many times. So I’ve done some of the work refining the particular language and verbiage kind of over the months. And I’m realizing what an interest there is, and I get messages all the time. “Thank you so much for this content. We appreciate your contribution to the industry.” And to me, that’s all the payment I need. If there are people that are getting utility out of this and finding a way to monetize or build a career out of their passion because they’re unlocking a new aspect of this industry or of a professional track in their heads, to me that’s all worth it.

Lloyd Danzig: So I appreciate you calling that out. And I’ve been enjoying putting out the content, and I like the response that I’ve seen so far.

Ryan Knuppel: Nice. Yeah, we’ll put links out in the show notes of this, but I mean one of them was on investing in sports gaming in tech. I thought that was a great read. And then obviously your piece Jambos Pick, you didn’t shy away from some controversy in that article. I’m sure you got some great responses to that one, huh?

Lloyd Danzig: Yeah, I got some great responses and I think … Look, I really, in a way that some of those close to me have perhaps found annoying at times, I take it personally when I see people out there who I have no connection to, using either their celebrity or what they think is their mathematical or financial ingenuity, to take advantage of other people. And to me, the matter with Jambos Picks and Michael Schwimer was not even necessarily whether someone was being malicious and fraudulent, and trying to mislead people. It was just an objective fact in my mind that, intentions aside, there were people making investments and purchases that they were not given the adequate tools to assess the risk of.

Lloyd Danzig: And I kind of saw this conversation percolating on Twitter and on some other message boards and I realized, everyone was having so much trouble sorting through his financial jargon and accounting nonsense, and everyone felt like something was wrong but no one could articulate it and put a finger on it. And I sort of felt … I saw the bat signal, felt the calling, whatever you want to say, and really felt it was an obligation of mine to bring to light what it was that was going on over there.

Ryan Knuppel: Wow. Well, I definitely appreciate that and I know I can say thank you for all of us that were not able to articulate what we were feeling, in that case and many others. So thank you for bringing some light to that. Ryan Knuppel: Let’s switch gears a little bit here. I mean, we’re both in the sports space, we’re both in the sports betting space. We’ve had a shocking yet sad happening here over the last week with the passing of Kobe Bryant and his daughter, and the several others that were on the helicopter that day. I think, at the time of this recording, this was just a few days ago. And we were chatting about this before we got on the recording here, but I thought we would just talk just for a few minutes about, I guess the meaning of that. To us being in the sports space and what kind of effect did that have on you, I guess the day of and the day leading after.

Ryan Knuppel: I know for me it really hit hard and I really related it to family more than anything. I made sure that I … I was almost numb for a couple of days and I made sure to really hug my family, hug my kids, a little bit extra, those couple days after. And I’m hoping that that’s going to translate into doing that more often. Give me some of your thoughts on this sad happening with Kobe, and I guess how it translates into the real world from there and how it hit you personally.

Lloyd Danzig: Yeah. Well, I mean this is really just still, like you said, it’s been a couple of days now. It’s a tough topic to talk and think about. I was saying to you earlier, I grew up as you know, a Yankee fan in the late nineties with all those awesome … Derek Jeter, Bernie Williams, Mariano Rivera teams. And when I heard the news, like you, I didn’t believe it at first. There was just, there’s no way this is true. This must be some cruel type of joke that some insensitive media outlet is playing.

Lloyd Danzig: But once it hit me, at first I thought, “Wow, this is crazy.” I feel to me, as someone who again, grew up a Yankee fan, this is what I imagined I would feel if a similar tragedy happened to a guy like Derek Jeter. And then I realized that I only feel that way because Derek Jeter was my hometown hero. People who grew up in different parts of the country, in different parts of the world, have their own hometown heroes that were just the ultimate competitors, the ultimate winners, classy guys who you just wanted to be, wanted to be around.

Lloyd Danzig: And yet somehow all of those people, myself included, who have their respective hometown heroes, agree that Kobe is just in a league of his own. He’s your idol, no matter whether you love him or hate him, whether you’re playing on his team or against his team. And I think at least in part, that that’s why you’re seeing the ripple effect in communities, in age groups all over the place.

Lloyd Danzig: But still, I still haven’t quite been able to figure out why I am so upset by this. I mean, I get it, but he’s someone I’ve never met and never even been in the same room as, aside from maybe Madison Square Garden. And it’s confusing to me, and I think a lot of my friends are also confused. Obviously death is sad and it’s tragic and we feel bad for him, but we all kind of feel like, I could say him for myself and some of my friends, we feel like we lost a family member of ours.

Lloyd Danzig: And that’s crazy. It’s crazy to have an impact and a legacy like that. And what makes me cry kind of simultaneous tears of sadness and of joy, is that you know all Kobe wanted was to have a legacy. And you can see some of the interviews in early days where he laughed at the word legacy because he thought like, “Who am I? I’m not going to have a legacy. I’m just a guy out there playing basketball for the fans.” And he would say things like, “The fans have given me more than I could ever give them.” And just such a class act.

Lloyd Danzig: But to get to your second point, you said, “What is the application in the real world?” I heard so many people say things like, “Oh, I will never go on a helicopter after this.” And of course I understand that knee-jerk reaction. But I think the knee jerk reaction is not, “I am going to avoid these dangerous activities.” It’s exactly what you said. It’s realizing that even for someone who has it all and has an infinite number of resources to get from point A to point B, unexpected things happen.

Lloyd Danzig: And I hope that people all around who are listening to this and who are, have the same reaction that you had. Hug your loved ones a little tighter. If riding on helicopters is what you get a thrill out of, then do that more, if anything. I hope and I’ve seen at least in some pockets, people taking from this just a real harsh reminder of the temporary nature of life, and the importance of doing what makes you feel fulfilled and alive during your limited time here.

Lloyd Danzig: And I was glad to hear, Ryan, that you said you just wanted to take two days and do everything with your kids that you possibly could. And man, that there’s nothing that could ever come close to being even considered a silver lining here, but I got to think that a guy like Kobe would be happy if his legacy created a situation where people wanted to rearrange their lives to spend more times with their loved ones. Because at the end of the day, that’s what he did. That’s why he was such a competitor, so he could sail off into the sunset with his family. And it kills me that he’s not able to do that, but perhaps some other people can take some inspiration.

Ryan Knuppel: Beautifully said. Thank you for that, I appreciate it, Lloyd. I won’t keep going on that. I think you said it perfectly and our hearts go out to the Bryant family and all the other families that were involved in that, our hearts go out to them.

Ryan Knuppel: All right, let’s move on. So what’s next for you? So, I know you’re doing a lot of speaking. I know you’re heading out to ICE London here in a week or whenever that is. What’s next? What’s on your 2020 agenda? What kind of things should we see you at, and what’s up for Lloyd in 2020?

Lloyd Danzig: So, like you said, speaking is a big thing that I do. And I’d be lying if I said it didn’t come with some great commercial opportunities and personal branding opportunities, but I do it because I love it. I love spreading information that people find interesting. I love the followup conversations at the networking events. When you see someone in the crowd who sees one of your slides and has this aha, eureka moment, and then they come find you after and they discuss a business idea. To me that’s great.

Lloyd Danzig: But in terms of real, real business and what’s going on. I think, and I might’ve mentioned, I think I mentioned this in one of my Medium articles. There’s this really weird thing going on in the sports betting industry right now, where there’s sort of a … I’m almost calling it like a certainty or uncertainty paradox. On the one hand, we all, who have a front row seat to this, are about a hundred percent certain that this industry is experiencing exponential growth and is going to be absolutely huge, bigger than everyone’s anticipating. We see how much money there is to be made.

Lloyd Danzig: But, if you ask someone to give you the exact timing of that growth, at what year will all the states be illegal or will this percentage of states be legal? If someone were to ask what vertical within the sports betting space is going to be the most profitable? If you were to get more specific and say something like, when is exchange wagering going to make its way over to the US? It certainly will, but the timing is so utterly uncertain. And that creates some difficulty for people trying to raise money, people trying to invest.

Lloyd Danzig: And to me, I could not be more bullish on this industry if I tried. I take the maximum equity stake in any advisory clients that they will possibly allow me. I would prefer an equity stake rather than cash, because I see how undervalued almost every single sports betting, sports media, sports, tech startup is. And I think part of that is because people don’t understand the nuances and how lucrative things like affiliate marketing are, which Ryan, you know as well as anyone. People outside the space, they just don’t get it, they’ve never seen it before. So for me, for my personal interest, I want to make sure I end 2020 with as much exposure to as many of these awesome sports betting and sports content sites that are popping up. Because some of them and a bunch of them, are going to be huge hundred million or billion dollar companies before you know it.

Lloyd Danzig: In terms of the industry at large, and this is what you’ll see in some of the next couple of articles I have coming out. I think there’s a massive amount of education that needs to be done to benefit a variety of stakeholders. I think perspective investors need to better understand what the investment landscape is and where the revenue opportunities and where the risks lie. I think regulators need to have a better ability to understand not just the current generation of sports betting, but how technology is going to shape that in the future. I think that as you and I have discussed, maybe before we got on this call, individual gamblers and betters needs to be protected in some form. They need to know what they’re getting into. They need to have a means of resolving disputes and conflicts.

Lloyd Danzig: So I think, I’m hoping that I can use my knowledge and skillset, and the fact that I enjoy writing these long articles, to spread some information that really furthers the interests of a lot of different groups. Because it seems pretty clear to me that a rising tide would sell ships and that this is an enormous pie that is only getting bigger. And I think that the more of us that look at each other collaboratively rather than as adversaries, are going to benefit everyone.

Lloyd Danzig: So to the end that I can carve out a nice foothold in an equity stake in a bunch of different companies that I think are very promising, and also further the interests of people trying to raise money and have companies acquired and spread education. To me those would be two real 2020 goals to pursue.

Ryan Knuppel: That’s amazing. That’s great. I mean, speaking of acquiring and acquisitions. I mean, we just had a really big one happen with the Barstool Sports acquisition-

Lloyd Danzig: Oh, yeah.

Ryan Knuppel: here over the last week. What do you think of that? I mean, what a monster acquisition, and directly in our space. For a site that started out as, all I can almost describe it as, as a blog, right? I mean, it started out as a blog. It started out a small just like anything else, and now is being sold for $165 million. Give me some thoughts on that acquisition.

Lloyd Danzig: Yeah, I’d say, look, aside from Dave Portnoy, the people who should be the happiest about that deal are guys like yourself. And guys that have realized, way before everyone else, that sports betting is the most transformative engagement tool we’ve ever seen. More so than it is an actual revenue generator. And the extra minutes and eyeballs that sports betting and free-to-play prediction contests and daily fantasy accrues to the channels that are broadcasting them, and therefore the incremental advertising revenue and all that, that is the gold mine.

Lloyd Danzig: And I think guys like you who’ve been shouting that from the mountain top for years and getting frustrated that no one seems to be listening. And finally, like you said, this site started as a blog and yes, they have personalities and everything, but they don’t have astrophysicists and all this crazy intellectual property. They’re just giving the people what they want and being real about it. And you’re right, they got the 160 whatever million dollar infusion at a almost 500 million valuation.

Lloyd Danzig: I think that’s awesome. It’s awesome for the industry. I think it’s awesome for the Barstool Sports kind of fan base, because not only … They’re going to now be able to bet at the Barstool Sports book and I’m sure they’re going to offer odds and some really clever and sarcastic and maybe sometimes offensive betting markets, all aligned with their brand. And so that’s all great for them.

Lloyd Danzig: But I think more broadly it shows just the power of sports betting to drive engagement. And that people who understand the media aspect of it and how to leverage it, are just in a really awesome position. And to circle back to my answer to your previous question, absolutely an area that I want to be involved in and have exposure to, and that I would recommend an investor did as well if they had a risk appetite,, is companies exactly like this. Ones that have a user base that have content that people are already looking at, are already kind of interacting with in a way that puts them farther down the conversion funnel than just your average sports fan.

Lloyd Danzig: Those are going to be the ones that either get acquired by other … We got Diamond Eagle Acquisition Corp with DraftKings and SBTech that have 500 million in cash in the bank. Maybe they’re looking at 10 Gaming and Barstool Sports and saying, “Hey, I need to spend 100 million on a content network.” So I would love to be the guy who’s that acquisition target. And I was excited for you in particular when I saw that news, so it’s funny you bring it up.

Ryan Knuppel: Yeah, I mean, it’s just cool to see from a content perspective and for somebody that’s been in that space to see that happening, and to think that there’s going to be more of this going on. There’s still, like you just said, DraftKings and some of these big companies with cash that are just waiting for the right opportunity to acquire someone. I love seeing that and I’m happy for the Barstool [crosstalk 00:20:55] community.

Lloyd Danzig: Yeah, let me just jump in. I just want to add one thing because I know we’re about to finish up here, is that there’s another important thing that I think people who are watching this market closely should take note of here. Ryan, you’ve been with me at a lot of these conferences and there’s always at least one panel where people who sometimes are experts and sometimes just proclaim to be, are talking about the difference between, and similarities between, the European market and the US market. And I think one of the frustrations that some US people have had is, they’ve felt that the European market is very mature and they look at sports betting really as like an investment almost. You’re trying to maximize your risk adjusted return and you’re looking at numbers and expected value, and all that.

Lloyd Danzig: And that’s important for sure. People do that here. Professional gamblers are doing that, they’re looking at sports bets just as you would look at a stock. And creating services and platforms for that demographic is very important. But I think something that was going really ignored by too many people is that, especially in the US, there’s another sort of subsegment of users that don’t care about getting minus one 10 instead of minus one 12, it’s all about smack talk. And it’s all about the fact that it’s more fun to tell your friend, “I told you so, that the Chiefs were going to win,” if you put $10 behind it. And whether you put $10 to win nine or $10 to win eight, doesn’t matter, it’s the fact that you put your money where your mouth is.

Lloyd Danzig: And I think that the Barstool fan base, yeah, I’m sure some of them use some analytics and maybe use some Excel models for placing some sports bets. But that’s not what the Barstool brand is about. It’s about smack talk and kind of rivalries, comradery slash competition. And I hope that what this deal brings up to the top and that, again, guys like yourself have known for a while, I’m not telling you anything you don’t know, is that people need to pay attention to that segment of the population as well, for whom the exact odds and the exact payouts are less important as the entire user experience. And I think guys like yourself, again, are positioned perfectly to hopefully capitalize on what I expect to be some newfound interest in that area.

Ryan Knuppel: Man, one of the smartest guys in the industry right here, guys. Lloyd Danzig, always a pleasure. Hey, Lloyd, how can people find you? How can they get ahold of you? I know some listeners on here, we have a lot of sports betting business type people. If they’re looking for maybe some advice, some advisory type advice from you, where would they get ahold of you?

Lloyd Danzig: Yeah, sure. So LinkedIn and Twitter generally are the two easiest. Lloyd Danzig, I’m the only one, I have a unique name. My Twitter handle is just @LloydDanzig. L-L-O-Y-D. D-A-N-Z-I-G. And absolutely, I appreciate you asking, because anyone who really does have a genuine interest in breaking into this industry, doing something cool in this industry. I’m not a guy who gets on the phone and starts the billable hours clock. I love talking to people who are passionate. So please feel free, anyone who has an idea, wants to kick around something. My schedule is pretty tight and I’m a busy guy, but as long as I can find time, I’m always happy to chat.

Ryan Knuppel: Amazing. Well thanks for being here. We’ll also put those links in our show notes as well, so you guys will be able to get out and find Lloyd Lloyd, will you be at Betting on Sports America again this year, 2020?

Lloyd Danzig: Oh, absolutely. I’ll be there. I think I’m moderating a panel, maybe giving a keynote as well. So you will see me and I’ll see you there.

Ryan Knuppel: Well, we’ll have to trick everyone around us as you change the lights down the New York City skyline once again. That’s another story for another day.

Lloyd Danzig: We’ll save it for another day.

Ryan Knuppel: We’ll save that for another day. But we have a good story around that. So Lloyd, I appreciate you being here and we will talk to you at another time. Thank you, sir.

Lloyd Danzig: Thanks, a lot. Take it [inaudible 00:24:43].

Ryan Knuppel: Thanks for listening to this episode of the Knup Sports Show. If you enjoyed this podcast, please consider subscribing to our iTunes channel today. Plus visit us at knupsports.com for more pics, previews, strategy, and news. That’s K-N-U-P sports.com.

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