A hole-in-one is a once in a lifetime experience for a golfer--if you're lucky. Now, one startup wants to turn that luck into cold hard cash by letting golf courses offer payouts as high as $25,000 for a hole-in-one.
Digital Golf Technologies helps golf courses offer fully automated hole-in-one contest as a way to generate additional revenue and give golfers some added excitement on the course.
"When you're stepping up to the tee and you’re swinging for a cash prize like that, it's a heart pounding moment," Jakob said.
When you're stepping up to the tee and you’re swinging for a cash prize like that, it's a heart pounding moment
DGT, which was co-founded in 2015 by former Redbox CEO Gregg Kaplan, currently works with around 150 golf courses across the US that install the startup's HD cameras and ball tracking technology at one of their par 3 holes. Players pay an additional $5 for a chance at $10,000, or $10 for a $20,000 payout. There's flexibility in the pricing model, CEO Mike Jakob said, and some courses build the fee into the cost of the round so all players are eligible.
DGT works with an insurance company that covers the payout when someone hits a hole-in-one, and the lucky golfer also goes home with an HD video to show their friends and share on social media--a natural marketing tool for both DGT and the golf course, Jakob said.
In the two years since the company was founded, Jakob said DGT has paid out over 50 hole in ones, with the highest amount being $25,000.
Jakob joined DGT this April after previously working as president, COO and CFO for Sportvision, a Chicago sports tech company best known for inventing the yellow first down line you see during football broadcasts. The company also provides pitch tracking in baseball, car tracking in NASCAR, and similar services in other sports. Sportvision was acquired last fall by Durham, N.C.-based SMT.
DGT was founded by Kaplan, the former founder and CEO of Redbox and current operating partner at the Pritzker Group, and Eric Hoersten, Redbox's former SVP of technology. Jakob said DGT was the perfect fit for him as the startup is like "Redbox meets Sportvision on the golf course."
It's an analogy that might sound strange, but Redbox took off because of its technology that could work unattended outside of retail locations. DGT's cameras and tracking technology works similarly, allowing courses to run the contests with minimal upkeep.
Despite its popularity among its most avid fans, the golf industry in general has been flat over the last few years. The number of US golfers playing traditional courses has been stagnant--about 25 million people a year--over the last five years, and the US golf equipment totaled $2.55 billion in 2015, down 3% from the year before.
Golf courses are also seeing competition from places like Top Golf, which offers a casual driving range and lounge experience where players can compete with each other.
DGT sees its technology as a way for courses to generate new revenue, recapture some of the casual fans, and capitalize on some of the wagering that's happening between golfers on the fairway already.
To grow its team and get its tech in more courses, DGT just raised $4 million from VC firms including Modjule, MATH Venture Partners, Hyde Park Venture Partners and other investors. DGT plans to add more features to its gameplay, allowing for closest-to-the-pin, longest drive, and other contests courses can offer at their holes. The company is also planning to offer a $1 million hole-in-one contests where winners from previous contests can gather for a chance at a seven-figure payout.
DGT currently works with courses like Grand Geneva Resort & Spa in Lake Geneva and Silver Lake Country Club in Orland Park. Jakob said he hopes to be in 200 courses by the end of the year.
