3 Defining Sportsbook Trends

Price Competition

The sports betting market has been maturing rapidly since the mobile revolution, yielding more bettors, turnover, regulation and naturally more consolidation. As the industry accordingly transforms to resemble a more traditional, established economic market, it is becoming increasingly influenced by traditional forces, namely price competition.

Although today’s recreational punter may still be more interested in a sportsbook’s bells and whistles than whether the vig is 2% or 10%, more
sophisticated sportsbooks have given rise to more sophisticated bettors, driven in large part by the development and widespread availability of advanced sports data and analytics. This new breed of sports analysis provides granular player performance metrics undetectable to the naked eye, and its sheer quantity and depth has inevitably yielded more analytical tools, which in turn yield more opinions and predictions. The result is an industry that begins to draw parallels to today’s financial markets, with highly liquid exchanges and the ability to invest millions with one click.

While still a way off from that eventuality becoming the norm, it has already taken hold in Asia, and sportsbooks would be wise to take note of the trend. Neglecting to invest in odds creation and risk management, relying instead on generic price aggregators simply because winning bettors’ accounts can be
suspended, is a dying strategy. The more profitable course would be to embrace this next frontier of sportsbook competition and devote the resources necessary to stay ahead of the curve. Ultimately, the sportsbook that is so liquid and confident in its pricing that it can take enormous bets at razor thin margins, and guarantee that customers are not banned for winning, will eventually win over the competition.

Faster markets

With technological advances enabling instantaneous, play-by-play match updates, sports betting can now finally compete with the instant gratification culture that surrounds us. The result is “what will happen next”-style markets, where bettors only need wait until the end of the current play for their bets to be graded.

While conceptually this evolution is seen as a logical, natural progression from live betting, in practice the logistics of offering these markets are quite challenging. Handicapping whether a player will, for example, make or miss a putt or a free throw demands far more sports trading expertise than simply looking up a player’s lifetime average. Situational factors become paramount, necessitating advanced algorithms to properly evaluate those circumstances from today’s most advanced sports data feeds.

Another logistical and technical hurdle is timing. Markets that may span only a single play mean that within a matter of seconds, the sportsbook must determine the right price, open it up for wagering, and allow bettors ample opportunity to actually place a bet, all while accounting for delays in sports data or video broadcast transmissions and ensuring that bettors with potential access to a faster feed cannot past post.

To truly maximize the value of these markets, they further need to be available on mobile devices, ideally with live-streaming capabilities, to allow bettors to wager even if not at the stadium or in front of a TV. The technical demands are accordingly high, requiring the running of a live-streaming mobile video with virtually no lag time and the ability to offer, process and grade wagers in a matter of seconds, all for markets with no benchmark pricing.

Yet despite these seemingly high hurdles, we can expect to see sportsbooks starting to offer that full package as early as this year.

Innovation

Complacency has dominated the sports betting market for decades – and for good reason, as the industry has grown steadily without needing to change the basic formula. But the success of cash-out (which ironically had effectively been available for many years via betting exchanges, but only took hold
when it was presented in a simple, clickablebutton format) signaled a market-wide appetite and significant commercial potential for fresh perspectives and basic innovation.

We have seen similar success stories with ColossusBets or the Sky Bet Super 6 – lotterystyle products repackaged as sports betting products that have subsequently garnered mass appeal. These demonstrate that the sports betting world is amenable to (and perhaps even eager for) innovative new ways to wager on sports, and as more of the market picks up on this trend, we should expect to see more new sportsbook products rolled out this year: bracket betting, live tournaments and option betting.

Another technical challenge will be to handle the limited real estate on mobile phones, making scrolling and too many clicks a tedious exercise. The new
platforms are now offering true one-to-one personalization where the client loads up the relevant content for each and every player. Old technology will be a lot older this year – new technology is needed.