Q&A: Lee Richardson
As the industry revels in the glow of the PASPA repeal and an exciting World Cup in Russia, iGB caught up with Lee Richardson to discover more about his Totally Gaming Academy sports betting masterclass.
iGaming Business: As a veteran of the sports betting industry what made you decide to move into the training side for TGA?
Lee Richardson: I’ve been closely involved in the sports betting sector, both retail and non-retail, for almost 20 years – and an occasional sports betting consumer for a lot longer! So, when I was approached by TGA to develop a new Sports Betting Management module, I was happy to help. Having now delivered programmes in Europe, Africa and America, there’s clear demand for such training and development within this fast-developing and ultra-competitive sector.
What gap in the sports management industry is this course designed to fill?
Feedback over the past 18 months tells us the course is proving of value to a wide range of audiences. Investors and start-ups, through to developing and established sports betting brands and operators from a wide variety of geographical markets, have all found it useful. We’ve also seen existing and prospective regulators attend to learn about the sector.
With such a profile of delegates attending from within Europe, Latin America, North America and Africa, it seems clear that it’s filling a specific need. Many of these regions are currently regulating or opening for legal sports betting, with all the challenges that entails for new market entrants and established operators alike.
The course works around the principle of the six Ps: perspective, product, profit, promotion, planning and people; how does this theory feed into the course?
The 6Ps structure helps to dig into areas that need streamlining or improvement, plus it helps people identify new opportunities and share individual experiences.
For example, under planning, we examine the tools and techniques available within business intelligence (BI), an area where smaller operators can compete very effectively with larger rivals.
You might be outspent in marketing dollars, but BI can help you spend those dollars more effectively than others if you are smarter at analysing your data and thus able to make better-informed marketing decisions.
We also examine, in some detail, the current trends in product and its development, and what operators should be expecting from their suppliers. Helping operators decide on what to focus on themselves, and what should be delegated to outside suppliers, is a critical component within that.
Sports betting is often accused of not innovating enough. What are the barriers to innovation in sports betting?
I think it’s fair to say that we’ve had, to date, a moderate level of innovation within our industry – whether on bets, markets or related categories.
But those that have arrived within the relatively recent past have had very significant effects on how players behave, such as in-play betting, cash-out functionality and mobile betting apps.
It’s more difficult to predict how some of the more recent innovations will perform, but two of the newer topics we examine are personalisation (a new way of communicating with consumers) and sports data (offering consumers valid information before/as they bet). Both appear to have real potential in providing sustainable, incremental revenues from better informed consumers.
However, it does remain the case that true, sustainable innovation – having some unique feature or consumer benefit unique to an operator – remains a real challenge.
All clever ideas – cash-out is an ideal example – quickly get adopted and adapted by others once the benefits are known, and it remains tough to win that sustainable advantage.
Nonetheless, we examine the benefits of how operators can put a robust system in place to evaluate, experiment and effect new and current ideas to help them remain competitive, all designed to win new, and retain existing, customers. All the best operators do this, and it’s another example of best practice we discuss on the programme.
The World Cup has just been on – how can sportsbooks maximise retention from these major tournaments?
European bookmakers will likely take around £2bn turnover on the FIFA 2018 World Cup in Russia, with a corresponding planned and positive impact on their bottom line.
Indeed, such tournaments have themselves become increasingly important in revenue- and profitability-share terms, up three-fold since the tournament held in South Africa in 2010, when in-play betting first obtained the majority of turnover during such an event.
Operators seeking to both outperform their competition and boost market share will always need to differentiate their brand while managing their margin. They’ll also need to deliver excellent customer service.
We examine the implications for this type of betting behaviour and weigh up the advantages – and challenges – in trying to attract the right type of new customers during such betting events.
Essentially, promotions need to be targeted with specific objectives about the type of new customer you’re aiming to attract.
The very timing of a major tournament like a FIFA World Cup means that, ultimately, the success will be the proportion of newly-recruited customers that are still betting with you at the start of the new football season just a few weeks later and beyond. That’s the acid test.
So, you need to be identifying ideal betting-pattern traits and ideal customer profiles in advance and modelling your promotional activity around that. It could be a ‘small-stake, big-win’ themed promotion, likely to appeal to recreational players; if it’s ‘sharper’ players you are trying to recruit, then a different core promotional proposition needs to be designed and delivered.
We would always encourage sportsbook operators to model different offers and trial them via focus groups and/or via ‘AB’ testing well in advance of any promotional campaign based around such a tournament. This is something that clearly needs to be planned well in advance.
What do you think have been the game-changing developments in the industry over the course of your career?
Without doubt, it is in-play betting. There are a variety of inter-related reasons – involving technology, taxation, trading tools, TV and (consumer) taste – as to why in-play now dominates, in revenue terms, for both operators and players. Its impact has been huge.
In-play also spawned the cash-out functionality, which suits both the player and the operator. It’s important to maximise the positive effects of both on player behaviour, while also exploiting the benefits of pre-match betting, which remains a significant share – and a highly profitable share – of consumer betting spend.
What influence is the opening of the sports betting industry in the US going to have on existing operators in the industry?
There is no question that the opportunities within the sports betting market of the US, following the recent repeal of PASPA, remain highly attractive to a wide range of players, including domestic and overseas operators, as well as suppliers. Quite simply, the US has every potential to be the largest single geographical market for legal sports betting.
However, there is a lot about how or when the market will develop that we don’t yet know, and the market dynamic is constantly changing. For example, some states are allowing multiple (parlay) bets, some not.
In preparation, it seems to me that to be successful and to help avoid expensive pitfalls, prospective operators and suppliers, be they domestic or from overseas, need to take advice from experienced local experts familiar with all these issues.
This seems essential to help understand this new market which has every capacity to be very different from other, long-established online sports betting markets such as Europe and Australia, whether in legal, regulatory, operational or betting-pattern terms.
What are the major challenges to the sports betting industry over the coming year?
As ever, it depends which part of the sector you are examining, but I would suggest that increasing compliance costs and ever-strengthening consumer protection trends remain key challenges for the operator. The industry also needs to improve its relationship with its different publics, including regulators, governments and the media, to better protect the industry’s reputation for providing entertainment enjoyed daily by millions of recreational sports betting consumers.
Sportsbook Management Academy
6-8 November, 2018 (London)
29-30 November, 2018 (New York)