Data over instinct, facts over opinions: Redefining risk management with LSports

The online sports betting market is growing rapidly, generating over $45 billion in 2024 and projected to reach nearly $65 billion by 2029. As this financial development accelerates, sportsbooks must adapt to technological advances to maximize returns and stay competitive. Yet, with rapid growth comes an increased risk of overlooking critical areas—particularly risk management. 
 
Adding to this complexity, regulatory changes require constant adaptation to remain compliant across jurisdictions. As more regions introduce sports betting regulations, licensing costs and taxes place a considerable burden on operators. Additionally, sportsbooks must commit significant technological and human resources to combat fraud, insider betting, and arbitrage, which is unsustainable for some. Consequently, many operators are being forced to exit markets that once seemed lucrative. 

Ziv sees a growing gap between the critical importance of risk management for sportsbooks and the tools currently used by the industry. “Many operators today rely on outdated or inadequate systems that require large-scale operations and significant staffing. This leaves them vulnerable to human error and costly misjudgements,” he says.  

“Bookies are struggling to reduce costs in this area but find themselves hindered by technology. Additionally, their legacy systems are deeply integrated into their operations, making them difficult and expensive to replace.”  

The need for flexibility 

With odds changing constantly and the online marketplace requiring sportsbooks to serve a diverse, global customer base, trading technology’s flexibility and adaptability are crucial to maintaining profitability. Ziv notes there is a persistent issue with flexibility. “Even top-tier operators using more automated and advanced risk management tools often use one-size-fits-all solutions. These systems are complicated to customise and limit their ability to adapt to the operator’s specific and evolving needs.”  

The human risk factor  

Human error poses a significant threat in sports betting risk management, where split-second decisions can greatly impact profitability. Mistakes of inexperienced traders in approving bets, setting or interpreting market trends can lead to substantial financial losses. 

“Today, sportsbooks rely heavily on junior traders, even though a simple input error can result in losses amounting to hundreds of thousands of euros,” says Ziv. “The key to reducing these risks is minimising human intervention, allowing the system to handle the process with only minimal oversight from senior staff.”  

Even with sophisticated algorithms, traders’ judgment still plays a key role. The pressure of live, in-play betting further heightens the overall risk and chances for error, as rapid shifts in events require quick responses, leaving little room for damage control.  

“The risk is significant. Bookies employ dozens, sometimes hundreds, of traders, leading to manual, opinion-based trading decisions. While automating this process could minimise these subjective decisions and significantly lower operational costs, many operators are held back by outdated technology that prevents them from progressing.”  

Mitigating risk by outsourced trading solutions 

Many betting operators are now adopting third-party risk management systems to address these challenges in risk management. Leveraging technical expertise, extensive experience, and market data—such as that powered by LSports—provides operators with an accessible, cost-effective solution that drives change. 

“When developing new products internally, we always focus on the market’s pain points and how we can leverage our technology and expertise to make our partners’ operations more efficient,” says Ziv.   

“Our vision was to create an end-to-end risk management solution that offers sportsbooks the highest level of automation and flexibility in the market. Guided by this vision, our product transforms bookies’ risk management operations into a data-driven, numbers-based framework, enabling them to significantly cut down on operational costs and stand out.”  

Additionally, solutions like the one provided by LSports often offer user-friendly interfaces and support, allowing sportsbooks of any size to quickly implement the software and focus on growing their business while saving costs and mitigating the risk of human error.    

“When examining the critical pillars of risk management, you have price, liability, and customer management. We already have price management covered, as we own the data. So, the objective was to automate the other elements, which are still largely handled manually in the industry—eliminating the need for a large workforce and allowing the business itself to manage its operations seamlessly, rather than relying solely on judgment.”  

The power of data 

Data is crucial in sportsbook risk management, as it drives accurate odds-setting, market analysis, and decision-making of human traders and machine algorithms alike. The use of comprehensive data allows sportsbooks to identify trends, assess player behaviour, and predict outcomes with greater precision, reducing the likelihood of a sportsbook incurring large financial losses.  

Real-time data is especially important for in-play betting, where rapid shifts in events require immediate adjustments. And no less important, leveraging historical data helps sportsbooks refine their strategies over time, enabling them to manage risks more effectively and maintain a competitive edge. 

“Owning the data was a massive catalyst for us. It enabled us to focus on the liability and customer management components while both streamlining and accelerating the entire process. But it’s more than that. The extensive data we have with our technology allowed us to create a system that centres on a business-by-numbers approach – a foundational element across our solutions,” Ziv explained. 

Harnessing AI and automation 

The advanced artificial intelligence (AI) and machine learning (ML) techniques that LSports applies in its technology put sportsbook risk managers in a position where, after setting initial guidelines and rules, they can simply let the system run. Through AI and ML, it collects extensive user information, builds bettor profiles, and groups them by risk level. It also ensures that all events stay within their defined limits.  

But Ziv believes there’s more to AI than building and optimising efficient processes: “Our technology pushes the boundaries even further. Our end goal is to reflect the relationship between liability and customer management in the odds.  

“This includes automatic adjustment of limits throughout an event’s lifecycle for markets we determine as liquid, as well as synchronisation between odds and limits so that our prices will change based on the risk acquired in the system, regardless of the market. This level of automation and precision would have been impossible without our technological expertise.”  

Personalisation and customisation as key factors 

Personalisation plays a fundamental role in the LSports risk-management platform. The company set itself a mission to shift the existing paradigm by which most standard trading solutions in the market today fail to adapt to the dynamic flexibility and customisation that sportsbooks require. According to Ziv, even prominent, tier-1 sportsbook operators still rely on advanced, yet generic pre-set systems.   

“Bookies will have the ability to customise our solution according to their specific needs. This includes features like setting different limits for high-quality events versus niche leagues and competitions, as well as synchronised adjustments of odds and limits in response to volatile markets.  

“Down the line, we’re looking at a tailored experience for players, with customer loyalty bonuses and tailored odds.”  

Benefits extending beyond risk management 

By using a dedicated solution like the LSports product, sportsbooks will enjoy benefits that extend beyond the most profitable risk management. Leveraging an ecosystem of new and historical data allows betting operators to realise potential in more areas of the business.  

“The in-depth knowledge bookies will gain about players will significantly impact their marketing strategies. By accurately assessing client risk, they can better group players based on their betting profiles and habits. This insight is invaluable for CRM teams and targeted campaigns, and it’s also essential for ensuring compliance,” Ziv concludes.   

“So, this isn’t just about managing risk operations; it’s about leveraging the risk function to create a broader perspective for operators. That’s why we’ll offer our partners the option to obtain it alongside TRADE360, our flagship trading system, developed with the same vision of full flexibility and user personalisation.” 

LSports risk management product will be on display at ICE Barcelona 2025