Joel Simkins has 25 years on Wall Street under his belt, from crunching numbers as an equity research analyst to working with big banks like Credit Suisse and Deutsche Bank. Now he's launched his own company, believing there is a gap in the market.

XST Capital Group is a boutique investment bank in the digital gaming space, helping smaller companies navigate the choppy waters of fundraising and M&A.

In this episode, Joel shares his takes on the state of the sports betting industry. He speaks to how betting has become mainstream and why he thinks it's here to stay. He also breaks down the rise of new players in the industry, the growing interest in sports you might not expect, and how this isn't just happening in the U.S.

Interested to hear where Joel thinks the industry is headed?

Tune into the whole episode here:

Here are the Sparknotes for some of my favorite moments from the episode.

From Back Rooms to Primetime

It wasn't that long ago when placing a play on a game meant knowing a guy who knew a guy, or taking a trip to Vegas. Things have changed fast and Joel is confident this wont’ be short-lived.

"Sports betting, no matter what flavor you're taking it on, is very mainstream. It's in the American consciousness and here to stay. Whether it's DFS, DFS plus, or sweepstakes, these businesses are here to stay."

Sometimes we need to step back and appreciate the huge cultural shift we are living through. Gameplay has gone from being in the shadows to being on every other commercial you see. For players, it means more options and better technology. For the industry, it's opened up a flood of new customers and opportunities. But as betting becomes more accessible, we need to keep pace in terms of responsible gameplay. It's a balancing act between growth and ethical considerations.

A Diverse Ecosystem Emerging

While a few big names stand out, the industry becoming mainstream doesn’t mean it’s just a few companies with a seat at the table:

"There's a much larger ecosystem than people realize. There are tons of companies innovating. If you’d asked me late last year or earlier this year, 'Hey, would you stay with the mainstream large investment banks for the rest of your career?' I would have said yes. But I really had this idea to start what I think is an underserved marketplace."

You've got tech startups bringing AI and machine learning into the mix. There are companies focused on improving the user experience, others working on more accurate odds-making. All combined are driving innovation and creating a more resilient industry. We've got a whole ecosystem of companies pushing each other to do better. That's good news for players, who end up with better products and more choices.

The Rise of Niche Sports Markets

And it's not all about football and basketball anymore. Joel highlighted that as the industry expands, so do the interests of players:

"If you go to any betting industry conference right now, the talk of the town is WNBA. These new categories, whether it's WNBA, different parts of mixed martial arts, boxing, or the resurgence of interest around Jake Paul and some of his events…”

This is another sign that the industry is maturing and diversifying. By gaining playing traction in new sports, companies can ease the seasonal ups and downs that have hurt the industry. It's also opening up new demographics. The rise of the WNBA, for example, could bring more women into the world of sports betting. As betting interest increases, so does viewership, creating a cycle that could elevate both markets to new levels.

The Global Market of Sports Betting

And this isn't just happening in the U.S. - Joel explained:

"This is very much a global business. That also gets me really excited about our digital gaming landscape. There is a ton of interesting stuff going on, whether it's Europe, which is obviously about 20 years ahead of us here in the US, or Latin America and South America. There's certainly more to come."

Each market brings its own challenges and opportunities. In Europe, mature markets are grappling with tightening regulations. At the same time, emerging markets in Latin America are just beginning to tap into the potential of the industry. This creates opportunities for companies to diversify their risk and learn from different regulatory environments. Innovations that work in one market could quickly spread to others, pushing the pace of change industry-wide.

The M&A Era in Sports Betting

With all this growth, you know what comes next - the big companies start shopping. Joel sees it coming:

"Deal flow is going to certainly accelerate. We're definitely on the front end of that. And that's partly why I launched XST Capital. We feel like there's going to be a major uptick in consolidation in the space… I think you're seeing that the large companies recognize that innovation is not really core in their DNA."

This M&A activity signals a new phase for the industry. By acquiring smaller, more agile companies, the giants can adapt to changing markets and user preferences. For smaller companies and startups, this creates opportunities to become an acquisition target. This will drive even more innovation as smaller players compete to develop the next big thing. However, there's also a risk of consolidation leading to less competition, so striking the right balance will be crucial for the long-term health of the industry.

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