- DietBet is a web-based platform that uses social gaming and financial incentives to promote weight loss. It was created by entrepreneur Jamie Rosen after witnessing the effectiveness of an office weight loss competition.
- DietBet makes money from a commission it collects based on the total dollar amount of each prize pool before it is distributed to participants. The commission is somewhere between 10 and 25%, depending on the amount that is wagered.
- DietBet employs the poker rake model because competition winners take money from the losers. The company does not risk its own money in a weight loss bet, nor does it stand to benefit when a customer fails to achieve their goal.
The platform was created by entrepreneur Jamie Rosen in 2011 who was inspired by friends who were competing in an office weight loss competition. Rosen noticed that his friends seemed more motivated to lose weight because of an evolutionary tendency to mimic the people around them. This tendency, he posited, was a better form of weight loss than traditional methods advocating proper nutrition and exercise.
DietBet was eventually launched in 2013 on a simple premise. Users join a social dieting campaign where each member is challenged to lose 4% of their body weight in four weeks. Each must also bet on themselves by paying into a pot. Those who manage to achieve their stated weight loss goal share the total pot proceeds between them. In this way, the platform makes weight loss fun, exciting, and competitive.
The DietBet weight loss game has now been played by over 300,000 players in more than 100 countries around the world. The biggest pot on the platform netted the participants a combined $366,060, though Rosen suggests social interaction and the adoption of sustainable healthy eating habits is a more important measure of success. These characteristics have enabled DietBet users to collectively lose some 3.6 million pounds of body weight.
DietBet revenue generation
DietBet makes money from a commission it collects from the total dollar amount of each pot. This commission is used to pay for transaction, employee, and other company expenses.
Some of the pot commission also pays for DietBet Referees, many of whom former players providing important weight-loss support and training to the DietBet community.
The exact amount collected is in the range of 10-25%, depending on the amount wagered or the game selected.
For those seeking to shed a few pounds, there are two game options:
- Kickstarter – the original four-week game where the goal is 4% weight loss. The average bet amount for each participant is $35.
- Transformer – a longer game lasting six months where the goal is 10% weight loss. In this case, each participant is charged $35/month or $175 upfront.
Note that the commission is taken from the gross pot before it is paid out to winners. In this way, the players who fail to meet their weight loss goals do not incur any fees.
The strategy DietBet employs is sometimes referred to as the poker rake model, where competition winners take money from the losers. Importantly, the company does not risk any of its own money and has no financial incentive for its customers to lose.
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