Smashing the monopoly: LSports CEO’s argument for a sports data sector overhaul

Sports data is the fuel that powers betting markets worldwide – and it has transformed some of the industry’s biggest players into behemoths with multi-billion-dollar valuations.

Leading rights-holders, from federations to leagues, now demand big money in exchange for awarding exclusive rights that are meant to underpin every wager on the action.

Indeed, the market for exclusive sports data rights has accelerated markedly in the 2020s, with major governing bodies like European football’s UEFA among those to seal such deals for the first time.

Challenging the principle

The established business model has detractors as well as fans, though.

A debate over the principle of packaging up information that is already available for a wide audience through streams and television coverage as ‘exclusive’ rather than merely ‘official’ has bubbled away for years. Multiple legal challenges have come and gone.

Advocates claim that such arrangements attract investment into sport and help to develop and refine the technology required to gather, process and analyse data.

However, critics like sports betting data provider LSports warn that the increasing number of exclusive deals are neither competitive nor financially sustainable.

‘Stupid money’

LSports CEO Dotan Lazar laments the “monopoly being generated by these rights-holders” that, he believes, are chasing “stupid money – not smart money.”

He adds: “They want to look in their pocket instead of leveraging and creating more income from the asset they have, so they sell it to the highest bidder and then all the others are unable to deliver data from a specific league without having the permission from the right-holder.”

But while rights-holders choose exclusivity, the reality is that certain data remains publicly accessible and can be independently sourced without restriction.

“No one can prevent us from offering Premier League data, because it’s publicly out there from various sources, like TV. It’s basically our civil right and our basic right to handle data and collect data and create data without having the need to get permission from anyone.”

Heading for a crash?

The most pressing challenges are, unsurprisingly, associated with the most popular sports, with Lazar adding that the likes of football, American football, baseball, basketball and tennis are driving inflation around data rights.

“There is a lot of competition surrounding the rights and then you have the two or three main deep-pocket suppliers that are buying the rights,” he said. “So, it’s only going to go up and up until it crashes.”

Lazar’s suggestion is to open it up to a market-access model so that rights-holders engage with data providers as a collective.

“We want the leagues to have more power, to understand that the stupid money is not something sustainable,” he says. “Eventually, we will need to harness all the markets, and the leagues should get their own cut of the money from all providers as a collective.

“The leagues need to hold the rights themselves and sell them to whoever they want. That’s the key idea, and we’re trying to change the industry. It’s going to be very hard, but it is what it is.”

‘Taking data to the next level’

LSports, which was founded as a family company in 2012, uses advanced technology, including artificial intelligence, machine learning and computer vision to collect and process enormous amounts of sports data in real time.

The company’s sports data API covers all popular worldwide sports, leagues and betting markets, including pre-match and in-play.

“On top of the data, we have a lot of tools that help sportsbooks to analyse themselves versus competitors, so they can act quickly to compare themselves to competitors and not lose market share,” Lazar says.

“LSports is all about making improvements and taking the data to the next level – more accurate, more in real time, and more robust coverage.”

Microbetting growth

The rapid delivery of sportsbook data feeds is essential for timely in-play betting odds – and the growth of microbetting has amplified the importance.

There is ample evidence of accelerating interest in microbetting, which allows players to wager on individual moments in a game in real time. There are estimates that microbetting could account for between 18% and 45% of all in-play bets as early as this year, with a mid-point projection of 30%.

“Microbetting is becoming interesting and it is not just a trend – it’s out there,” Lazar says. “The same goes for in-play, which today is even bigger than pre-match, and I think microbetting is going to be next.

“However, we will keep on expanding all of our markets and also add more that are interesting – not necessarily on a micro level, but our in-play suite, for example, will keep on expanding and the demand will rise.”

Global targets

LSports has grown to about 400 employees in total, with approximately 250 members of staff at the company’s headquarters in Israel and 150 in Poland. According to Lazar, most of the team work in research and development.

“We are super technological and we value our customers. What we have learned along the way is that all you need to do is just listen to the pain, listen to the customer, and you will have a freaking amazing product,” he says.

In terms of future growth, LSports is targeting Brazil, and Latin America in general, as well as Africa, alongside North America and, of course, the “huge market” in Europe.

“Sports data feeds are agnostic,” Lazar says. “You can sell it everywhere you want and it is a fit-all product. So where it’s going? It will keep on growing by 10% to 15% every year. That’s our estimation.

“In specific markets and regions, like the US and Brazil, it will be even higher. So, I think that in general we are in a very good position in a blue ocean of opportunities, and all we need to do is improve the product and bring on more and more customers to enjoy the experience.”

Responsible growth

In terms of goals in the shorter term, Lazar is keen for LSports to continue on its positive trajectory in a “responsible way.”

He adds: “We are finishing our new products that are going to be online [soon] and we have a new risk management solution that is AI-based – nothing the industry has ever seen before.

“We are here to fix our client’s problems, and the main logic behind LSports in general is that there is nothing we can’t fix.”

The ambitions of LSports are clear – and by the end of the decade, Lazar is hopeful that the company will be battling among the big guns in an ultra-competitive space.

“We’re definitely aiming for the top, so we would like to see our name running alongside or above our biggest competitors – and not because we are forcing our customers, but because we bring them added value,” Lazar says.