By any measure, Tipico is one of America’s smallest betting app operators. The company is only live in four states – New Jersey, Ohio, Colorado, and Iowa, with Indiana in the hopper.

To give some idea of its footprint, know this: They were first-day operators in Ohio and did roughly $5.9 million in handle in January. To compare, DraftKings and FanDuel combined to do more than $537 million for the month.

So, yeah, they’re small.

But in Germany, Tipico owns more than 50% of the sports betting market. It is basically DraftKings and FanDuel combined.

So, yeah, not so small.

And now, to grow its U.S. business, the company has launched something first-of-its-kind in America and, quite possibly, first-of-its-kind in the world of sports betting: an honest-to-goodness cashback rewards program. All straight bets with minimum -200 odds get 3% cashback, all parlays get 5% cashback. This is fully withdrawable cash. American dollars.

To get the money, you do have to hit a certain dollar amount of bets, and the amount will rise the more you bet. But it starts small – for me, $35 in straight bets will unlock the first 3%. The betslip populates with this information.

“I’m not sure I have ever seen that before as a generally available offer,” said Alun Bowden, senior vice president for strategic insight at Eilers & Krejcik Gaming and a person who has seen everything in the gambling space. 

Even in Europe, where the market has been mature for more than two decades, there isn’t this type of attempt at bettor retention.

“UK bonuses have ended up capped at a very low level because they just get abused on an industrial scale,” Bowden notes.

That’s certainly true: At 3% cashback, a -110 bet basically becomes a -104 bet. There is opportunity for arb’ers to have a field day here. But the company’s North American CEO, Adrian Vella, clearly believes the benefits outweigh the risks.

“The reason for our success in Europe has always been running our own trading, controlling all our product and technology, and, most importantly, being extremely local to the markets we’re in,” said Vella. “We’re a market leader in Germany because all of our products are built specifically for the German punter.”

And over the last four years, Vella and his team have been trying to crack the code in America. They didn’t copy and paste what worked in Germany. They took, in Vella’s words, the “hard route.”

“We built a completely new business with its own IP, its own technology, and built a really full suite of offerings from scratch for the U.S. customer,” Vella said.

Still a work in progress, of course, but that’s how he ended up on the cashback. It’s a particularly American way of doing things.

For instance: America is lousy with credit card offers, bonuses, and cashback offers. There are people out there who are legitimately making a living pitting these cards against each other.

For a variety of reasons, credit card use — and bonus programs — aren’t exactly a European thing. So Vella sees what Americans want, what they use, how they use it, and he’s trying to duplicate it with his sportsbook.

“Over the last four years, we’ve tested many things and had many failures,” he said. “But all along, we knew we needed to find a way to gain trust and retain players outside of bonus money and bazooka marketing.”

Enter a cashback rewards system. 

“From an economic standpoint, the market is so highly competitive in the U.S., you have to differentiate yourself,” Vella said. “You have to offer something that adds value and that makes the customer stay with you. This is our start.”

Of course, this is going to cost real money. A 3% (and 5%) cashback program means … well, that cash is going back. Vella says the company can afford this because they fully control their tech, their trading, and all their IP. They’re not paying outside vendors, and it’s a lean operation, employee-wise, here in America. 

“We want to make sure we reward the right players, and rewarding players on their behavior is the right way to do it,” Vella said. “There are zero caveats. I want people to be willing to deposit and bet with me because I’m fair.”

And based on a week’s worth of watching, Tipico — at least in my home state of New Jersey — is certainly fair. Their odds are right in line with the market leaders, more or less. Nothing shocking.

The biggest threat, it would seem, would be people abusing the system by finding odds discrepancies and arb’ing them. But even there, how much “abuse” is happening? And, of course, Vella does reserve the right to limit customers.

“We have to protect our P&L, but if you bring your business to us and it’s a fair deal for both of us, of course you’re 100% allowed to bet,” he said. “There are processes in place to protect the house, but maybe not as hard a stand as everyone else.”

Bowden is wary.

“I would hope they had some very strong controls around who gets these rewards and aren’t just hoping it will automatically attract ‘good’ business,” he noted.

As for the future, Vella sees Tipico here for the long haul, and while he doesn’t anticipate knocking on the doors of the market leaders, he definitely thinks there’s a place for smaller operators in the American space.

“I’m trying to run a business where I provide value and a different experience,” Vella said. “I don’t want to be the sportsbook that’s doing the same thing. There’s still so much still to do, but the past has been all about guerrilla marketing and bazooka marketing and acquisition. Now it’s a retention game, and people are going to need a reason to stay.”