Walter and Tom Hessert (along with their older brother Bill) are the founders of Derby Jackpot, currently the only legal social gambling game online in the U.S. Before Derby Jackpot, Walt spent a year driving around the country in an airstream trailer, meeting entrepreneurs (milliondollarroadtrip.com) and Tom was a men’s buyer at Urban Outfitters. In our interview, Walter and Tom spoke about the product, working with siblings, and building a company in a space like gambling, that’s sensitive and in flux politically and legally.
What is Derby Jackpot?
Tom: It’s the first real money social game in the United States – it’s legal online horse betting. We make it easy and fun for anybody over the age of 18 to place a simple bet on the outcome of a live horse race. The races go off every 15 minutes, all day long, 364 days per year. In a given day, we give a user 30 – 100 chances to win lots of money.
Where did the idea for Derby Jackpot come from?
Tom: The idea came in May 2011, after the three biggest poker companies online were indicted and shutdown in the U.S. A $6 billion industry was wiped off the internet overnight, and that left one legal way to gamble online: horse racing.
My brother Bill, who has worked in horse racing before, came to us and said that we needed to do this now.
Walt: Bill was placing bets every day online on horse races. He was playing with real cash, and getting paid out immediately with big jackpots. A lot of other people were doing it too, but there wasn’t an easy way to do it. There was nothing that was appealing to me, Tom, our friends, or other average people.
We thought ‘This should be fun for us. You can wager and win real money, and that’s gambling.’ So we’ve made a game built on that core experience that’s fun and easy to play.
Do most of the people who like Derby Jackpot have prior interest in horse racing?
Walt: Actually, no. DerbyJackpot is designed for people who play the lottery or slots or who like to go to the casino with their friends. It’s just a really fun online game. Serious horse racing fans and handicappers sometimes say ‘this doesn’t look like what I’m used to’ – and that’s the idea.
Have you guys worked together before?
Tom: We did. Walter and I started an eCommerce company at Notre Dame together. We sold over $80K of fan apparel – t-shirts, sweatshirts, hats – that we sent all around the world to Notre Dame fans.
What’s it like working with a sibling?
Tom: It’s awesome. We think the same way, so we know what the other person is thinking all the time. It makes communication really clear even when you aren’t talking. Things are easy because we’re always on the same page.
Walt: Yea, it’s awesome.
Are there unique elements to entrepreneurship in the gambling space? You’re building a product in an space that is in flux politically, legally, etc.
Tom: The consumer internet has created a benchmark for customer experience that’s really high, and it’s so easy to sign up and use all these apps. For gambling companies, it’s just not going to be that easy. We need to know who you are, that you’re over 18, and that you’re in a legal state.
Walter: Financing is a challenge. We are lucky to have a very wealthy private investor who believes in DerbyJackpot and is great to work with. Otherwise, I don’t know how we would have raised money. We talked to a lot of the top NY Angels and VC’s. Everyone liked the product and saw the opportunity, but they all said, “no thanks.”
Tom: It also creates more work for entrepreneurs, there’s a barrier to entry and it’s highly regulated. There are in depth background checks and regulators needing to know a ton of different things about everyone involved in your company. From start to finish, it took us nearly a year to get final regulatory approval.
What has been the best part of running a startup?
Tom: I think that It’s the way I’ve always been internally. I want to have ownership over what I’m building and to be part of a small team creating something new.
Walter: I love building a team of brilliant people around a simple idea and watching the product take form. All the challenges keep the excitement high.