49 minute read
Sports Betting
from SBC Leaders Issue 19
by SBC Global
PONTUS LINDWALL: POSITIONING BETSSON AS A LEADING TECHNOLOGY COMPANY
THE BETSSON CEO walks us through the ups and downs of his career, building the company into a global technology brand and how the growing influence of the internet has revolutionised the gambling industry
BY ERIN GALLAGHER
The gambling industry has changed substantially over the last few years, most notably with the growing influence of the online sphere on how we consume information and entertainment.
Speaking to SBC Leaders, Lindwall explained that when he first entered the online gambling industry in 1996, the sector was very much in its infancy. But fast forward 26 years and the internet has become an integral part of our daily lives.
He began: “I first entered the online gambling industry in 1996 but there wasn’t really an industry to speak of at that time. That is why I founded Net Entertainment – which ultimately became NetEnt – so that I could establish a business that offered internet gaming.
“I could see huge potential for this, but we had to do everything from the ground up. This meant building a team, developing the software and creating the games.
“A couple of years into doing this, I realised we could resell our platform and games to other operators and that is when we established a B2B division and we eventually distributed Net Entertainment to our shareholders. Although Betsson Group’s origins started in 1963, the company started operating online in 2000.”
In the early to mid-nineties, Lindwall continued, very few internet-based companies - if any - were operating in the black.
But by drawing upon his background in technology, and his strong knowledge of the gambling industry, the CEO believed that this was a sector which had huge potential.
“In the early to mid-nineties, the internet was not that well established and penetration was low. There were a few companies that were based on the internet but hardly any – if any – were profitable.
“But having a technical background, I knew that this would change and that the internet had the potential to revolutionise the way we purchased products and accessed entertainment. I had some knowledge of the gambling industry and truly felt that online gambling would become a significant industry as the internet became more widely available and used.
“The main difference between now and then is that there is an industry today. When I was starting out, there was no such thing as operators and suppliers. Most companies built their own software and developed their own games. Since then, the industry has matured and out of that maturity specialist suppliers emerged and the landscape became what it is today.”
In tandem with ongoing technological developments, the regulatory landscape has also experienced constant change. Anticipating such shifts, Betsson ensured that it was one step ahead by gaining a Malta Gaming Authority licence.
“In addition, back in the early days there was little to no regulation. We could see that this would likely change and in the early noughties that is exactly what happened,” Lindwall said.
“We secured our Malta licence in 2004. After this, the topic of regulation started being discussed on a European level and progress started to be made in other countries – although the next one (Italy) only came in 2011. This trend has continued over the last decade and now we are seeing more and more jurisdictions embrace regulation and licensing.
“The industry has obviously grown over the years, and this has led to a shift from companies being small and entrepreneurial to established and publicly listed. This, in turn, has been a driver of local regulations.
“Over the years, politicians and lawmakers have come to understand that the industry is substantial and continues to grow, and that it is big enough for them to have to care about it. This is not only from the perspective of protecting consumers but also unlocking the tremendous tax revenues the sector generates on an annual basis.”
In 2022, Betsson now holds licences in 20 markets - a considerable jump
from the two that it had secured in 2011. Lindwall believes that this growth will continue long into the future.
He explained: “Betsson started from zero, but today it is a sizable organisation with licences in 20 jurisdictions. The business continues to grow, and we remain profitable, but the market is more challenging today than it has ever been. This is certainly the case when it comes to having to meet different regulations in each of the markets we target and, in particular, the local taxes that we have to pay.
“One of the biggest changes I have seen is that Betsson now considers itself as a technology company above
all else. The technology required to power online and mobile sportsbooks and casinos is at the cutting edge and we are constantly having to develop new tools and features to meet regulations and to deliver the best possible player experience.
“Another area where we have seen change is responsible gambling. We have been developing our understanding, skills and capabilities in this area for many years and we were the first organisation to employ someone with the sole focus of responsible gambling back in 2005. Today, we have a full department for this and train each and every member of the company to ensure they understand responsible gambling and the need to protect players.
“This is an area where we need to continue to push the boundaries. Regulators put high demands on operators and we need to be able to meet them. This is a requirement and a challenge we are determined to not only meet but exceed. We recently launched a new version of
our AI prediction tool that enables us to identify potentially risky behaviour early on and make the necessary interventions to ensure the player remains in control of their play.”
Discussions soon turned towards Lindwall’s leadership style as well as the highs and lows of his career.
Beginning with the most difficult moments, the Betsson CEO shared some experiences from the early days of Net Entertainment - a time which was filled with the trials and tribulations of any start up.
“My toughest time in the industry was undoubtedly in the early days of Net Entertainment. We were committed to building our platform and system but, as a company, we were losing money.
“While this is normal for a start-up, it can be tough to keep pushing ahead with your ambitions and goals for the business. But once we launched and we could see the early numbers coming in, I knew we were on the right path to success and profitability.
“Ultimately, we could see that the cost of acquiring a customer was less than what they were spending over a few months, so we just needed to scale and drive volume in order to have a substantial business on our hands.
“The challenges that I faced in the early days taught me to be careful with money and not to spend more than I had. I remain an advocate of cautious spending and ensuring that any investment within the business – launching a brand, developing a product, entering a new market – is effective and ultimately leads to growth and profitability.”
Despite the challenges, Lindwall also pointed out that his time at Net Entertainment ranks among some of the highlights of his career. His 26year long tenure within the gambling industry is testament to the fact that there have been a number of milestones for the Betsson CEO.
“The fact that I am still in the industry after all of this time shows that there have been a lot of good moments for me. I’d say one of the best was at Net Entertainment when we launched after spending a few years building our technology and systems. When the first customer deposited and played, it was such a great feeling that it has stayed with me throughout my career.
“Another highlight came a few years later when we hit profitability for the first time. That lifted an incredible weight that I had felt on my shoulders for quite some time. We were actually attending a conference in Europe when this occurred, so it was great to be able to celebrate with the entire team.
“Achieving profitability has also given me and the businesses I have worked for the confidence to take on investment and to push boundaries. Without having the ability to do this, Betsson would not have become the power player that it is today.”
The gambling industry has undergone tremendous changes over the last 10 years, and when discussing what lies ahead in the next decade, Lindwall made some bold predictions as to where we might see Betsson and the gaming sector as a whole.
It is likely, he said, that we will see more countries undergo further regulatory changes as more markets mature. Meanwhile technological advances will become more prevalent as VR, AR and the Metaverse take leading roles in gambling’s development.
Lindwall concluded: “More countries will have regulated online gambling and this will certainly lead to further consolidation. It is incredibly tough for smaller entities to compete with tier one organisations – they need to have good products and a team of talented staff while ensuring compliance.
“This is an expensive undertaking and is making it increasingly difficult for smaller organisations – some of which are doing incredible things – to achieve profitability.
“In terms of technology, the roles of VR, AR and the Metaverse will be more prevalent in the online gambling sector. While they might not be at the point of entering the mainstream, these technologies absolutely have a place in the worlds of gaming and gambling and I for one am excited to see how they will impact and improve the experiences we offer to players.” •
ON THE MOVE: BETTING AND GAMING’S MOVERS AND SHAKERS
WITH COMINGS AND GOINGS commonplace across the betting and gaming industry, we take a look at some of the movers and shakers over the last few months.
BetMakers
Back in January, Christian Stuart was recruited by BetMakers Technology Group as CEO of North America, with the group looking to utilise his “significant gaming expertise and experience”.
Stuart has held a number of executive positions at Caesars Entertainment, including SVP of Business Development of Caesars Digital and Head of Caesars Sports and Online Gaming.
He said: “I am excited about the opportunities that lay ahead for BetMakers both in the US and globally. BetMakers’ suite of innovative products and existing US management team has created an opportunity for the company to quickly expand across the US.
“I look forward to joining the team, exceeding the goals of existing partners, and positively impacting the future of the US racing industry.”
Mindway AI
In February, Mindway AI welcomed Willem van Oort as its newest board member. Currently serving as a consultant and founder of several European igaming communities, van Oort will support the company with its international expansion strategy and stakeholder management.
Upon the announcement of his new role, Willem van Oort commented: “Mindway AI has developed truly innovative, science-based solutions to detect at-risk gambling behaviour early on, and the company demonstrates great growth potential.
“I’m excited to become a member of the Board of Directors and help guide Mindway AI’s commercial development as it stands before an expansion into new markets.”
Allwyn
Allwyn confirmed the ‘planned appointment’ of Justin King to serve as chair of its UK business, should the pan-European lottery conglomerate win the fourth National Lottery licence competition.
King’s appointment is contingent on Allwyn’s selection by the UK Gambling Commission as the preferred operator and will see him take “immediate responsibilities for ensuring the seamless transition from the current operator of The National Lottery to Allwyn.”
He said: “I have thoroughly enjoyed working with the team over the last two years, putting together a gamechanging application and transition plan. It would be an honour to lead Allwyn as operator of the National Lottery, playing our part in guiding this treasured institution into a new era.” •
UK FACES CONFLICTS ON TECHNICAL REFORMS OF 2005 GAMBLING ACT
AS THE UK PREPARES FOR AN OVERHAUL of its gambling legislation, industry stakeholders have issued a warning over the costly challenges to meet lawmakers’ new technical requirements
BY TED MENMUIR
Cast your eyes back to April 2005 and the UK Gambling Act had just been signed into law. The legislation, introduced by Tony Blair’s government, helped create an overarching regulatory body by establishing the UK Gambling Commission, while also introducing wider advertising reach for betting companies.
But 17 years on and the legislation still stands - despite leaps and bounds being made in betting technology. For some, this meant that the law governing the UK gambling industry had become somewhat archaic.
Fast forward to 8 December 2020.
The UK government announced that it would be propelling gambling into a digital age by carrying out a review of the 2005 Gambling Act.
At the time of the announcement, the Department of Culture, Media and Sport pledged to undertake a ‘surgical rewiring of UK gambling’ to improve the sector’s outcomes for consumers, society and governing agencies.
Pinpointing 2021 as the perfect time to carry out its review, the government body outlined its intentions to inform UK gambling stakeholders of its new duties towards customers and local communities and, furthermore, its new relationship with sports and wider business. As with any government report, however, this was delayed.
This, as you can imagine, meant that
many were none the wiser as to the pending outcome of its generational judgements.
DCMS’ confirmation of the White Paper’s delay was the season finale nobody wanted. Industry leaders were left with fraught nerves and were undoubtedly facing a further period of uncertainty, playing the guessing game of who is influencing the debate on gambling’s future and its outcome on determinations.
Speaking at the GambleAware
conference last December, Chris Philip, the third appointed minister to take the lead on UK gambling’s reform agenda since its announcement, informed delegates that his department had received more than 16,000 submissions to the consultation.
As it stands, the DCMS has only delivered on one definitive technical resolution: forcing the National Lottery to raise the minimum purchasing age for tickets and games to 18.
So following a year-long wait in limbo, UK gambling still requires clarity on the review’s conclusions regarding overarching technical disciplines related to customer affordability, product safeguards and LCCP duties which the consultation's 16,000plus submissions all indicate are areas of conflict with existing stakeholders.
Of significance, customer affordability has taken centre stage in the review process. Enforced checks are likely to be regarded as intrusive by many consumers, and will require operators to undertake costly changes to enforce them effectively.
The debate over affordability as a consumer protection has also divided opinion. A legal notice by Mischon de Reya noted: “The importance of a consumer rights perspective to establish whether regulatory interference in the freedom of individuals to buy services is necessary in a democratic society.
“As such, it is important that any interference with consumer freedoms is justified and proportionate. Interference will not be appropriate if alternative, less intrusive measures could be adopted instead.”
Though desired by the Gambling Harm APPG, there is still a high bar to clear on consumer trust and duties if affordability checks are to become a necessary requirement and meet a pressing need to protect UK online gambling consumers.
Technical conflicts have been further compounded by the UKGC’s longstanding ambition to establish a ‘single customer viewpoint’ on monitoring UK gambling engagement between consumer and licensed operators.
On a mission to ‘establish the UK as the safest gambling jurisdiction’, data sharing schemes of this nature will require operators to share information regarding problem gamblers.
This gives rise to a number of data protection, consumer rights and competition law concerns that sceptics believe have not been considered when outlining reform objectives.
Highlighted as another concern, regulators also have to define the appropriate limits for sharing data without the consent of the relevant
Chris Philip Andrew Rhodes
individuals. There may be less intrusive measures that deliver a greater social impact awareness, but will these be effective?
Though criticised by media and industry observers, the All-Party Parliamentary Group on Betting and Gaming’s submission of growing complaints made against the UKGC highlighted ‘regulatory overreach’ as a growing concern, particularly when it comes to how the sector will be governed in the future.
“Numerous significant changes have been made to the regulatory framework within which gambling companies operate,” the APBGG warned.
It added: “It should be noted that the Gambling Commission is a regulator rather than a legislator, and its powers are appropriately limited. To the extent that the Commission does seek to make further changes to the LCCP, it is essential to ensure that the regulator acts within its statutory powers.”
To date, some changes have been adopted through amendments to the LCCP. However, these alterations would not be appropriate in relation to some of the regulatory outcomes desired by the update to the 2005 Gambling Act laws.
While these concerns were branded as an ‘unnecessary attack’ on the Commission, the UKGC soon carried out sweeping leadership changes with the appointment of Andrew Rhodes and Marcus Boyle as its new CEO and Chairman respectively.
The new leadership duo would be wise to accept technical concerns aired by the APBGG in relation to the effective governance of a multi-billion pound, tax-effective sector.
Operator complaints also highlighted that a lack of publicly available information relating to the successes of LCCP reforms in reducing gamblingrelated harms has led the industry as a whole to suffer - a concern that must be satisfied by the next review.
Beyond MPs' desires to grant the Commission further regulatory powers, the APBGG warned that sector incumbents require clear guidance on their technical evaluation - if anything, to offer reassurance that UK gambling is an effectively governed marketplace.
“Change for change's sake will not lead to proportionate regulation,” the report cited. “A regulatory approach adopted by the Commission should not impose unnecessary regulatory burdens in upholding the licensing objectives, and does not unduly hinder the economic progress of the licensee.”
Within the context of what are likely to be generational judgements, DCMS cannot be sensitive to criticism of the regulator for simply highlighting concerns on technical costs and unnecessary applications.
Whilst UK leadership has long accepted that changes are imminent with regards to customer care, conduct and safer gambling duties, desired standards will not be achieved if inbound reforms impose as a straightjacket on operators. •
Bernhard Mogk, SVP Global Business Development at ESL Gaming Amir Mirzaee, Bayes Esports COO & Managing Director
BAYES ESPORTS AND ESL GAMING: PROFESSIONALISING ESPORTS BEYOND GLOBAL DATA DISTRIBUTION
EXTENDING THEIR EXISTING PARTNERSHIP until 2023, Bayes Esports and ESL Gaming have embarked on a joint mission to professionalise the esports data ecosystem beyond global data distribution
BY ERIN GALLAGHER
The two companies initially started working together back in 2019 to create what they describe as a farreaching network within the esports data industry.
Since then, more than 150 partners have used data products from ESL leagues and tournaments provided to them by Bayes Esports for use cases such as analytics, media, distribution and integrity.
But while interest levels in esports leagues and tournaments has continued to grow – a trend which has been somewhat evident throughout the pandemic – Bayes and ESL took the view that something was lacking. That missing piece in the puzzle, they believe, is the infrastructure and professionalism that can help lesserknown esports titles become more mainstream.
“Esports is a lot more complex than traditional sports,” said Bayes Esports COO & Managing Director Amir Mirzaee. “With it being digitally native and any sort of standard often not existing across leagues and game titles, traditional market participants often struggle with handling and fully understanding esports.
“Offering official game data means bringing structure to any content offering in esports and allows for standards to be established. We are excited to continue to work on new services and products that will lead to better fan experiences and the continuous growth of esports as a whole.”
Bernhard Mogk, SVP Global Business Development at ESL Gaming, added: “We are very happy to extend our partnership with Bayes, the most experienced, but also the most committed data company to set uniform industry standards.
“Especially in regards to the diverse and ever-increasing interest in official match data, we will continue to be on the forefront to preserve and promote integrity across all our competitions.”
This year, the two companies will continue to expand their content by adding additional game titles. This will be in addition to the optimisation of coverage “by achieving nearly 24/7 content availability”.
To professionalise the less-explored areas of the esports industry, ESL and Bayes will draw on their experiences in building, broadcasting and commercialising esports ecosystems as well as their leading positions in the industry.
Mirzaee continued: “Bayes Esports is the exclusive, world wide game data commercialization partner of ESL Gaming. At the core, Bayes supports game publishers and league operators in extracting game data live, such as scores, kill, so called economics (gold, cash, etc.) and other data in that content.
“We run the data through our industry leading live data infrastructure, productize it for various use cases and then distribute it to over 150 clients worldwide, close to real time.
“Beyond this, as our partnership grows in tenure, we engage in improving the underlying technical and operational infrastructure, we add complementary services around historic data, add new game titles, etc. You could say Bayes is the extension of ESL in that context.”
Bayes Esports will focus on covering ESL’s content for both DOTA2 and CS:GO throughout 2022, with more events and leagues in the pipeline.
The company’s Managing Director highlighted that in addition to top-tier events such as Intel Extreme Masters, the Dota Pro Circuit and CS:GO Majors, Bayes Esports will also be taking a revamped series of mid-tier events to market. Mirzaee stated that this will include Challenger leagues, as well as the entry level Cash Cups which now also include women-only events.
Looking forward to the next 12 months, Mirzaee is confident that 2022 will “obviously be a huge year” for ESL Gaming following its recent M&A announcement.
“Looking at the recent M&A announcement of ESL Gaming, 2022 is obviously a huge year for them. Bayes is not quite the unicorn (yet), but we too have a series of exciting announcements in the pipeline over the next two months.
“Jointly, we’re looking to supercharge the partnership, not just in terms of expanding on content but to dive deep on the underlying infrastructure as well.
Four years into their partnership, Mirzaee emphasised that Bayes Esports and ESL have already mastered the technical and operational challenges that allow for offering a consistent live game data product.
By continuing with their exclusive agreement, the duo plan to scale up their offering and build an infrastructure for “aggressive growth”.
Mirzaee concluded: “Offering esports live data is exponentially harder than traditional sports data, which is why our tech stack is actually a lot more flexible and performant than that of traditional sports data providers.
“So for this year, we’re diving deeper on scaling up the offering and building an infrastructure for aggressive growth. The ESLGaming merger with FACEIT certainly adds lots of exciting strategic options in terms of jointly establishing a global event and data platform. Long term, the goal has to be to become the operating system of esports so to say, standardised across titles, regions and formats.” •
HONORÉ GAMING: CREATING THE NEXT BOOM IN THE AFRICAN MARKET
A VAST CONTINENT with a large, young and sports enthused population, it is unsurprising that Africa poses great potential as an emerging betting market with a strong growth rate, albeit with some local hurdles in areas of regulation and payments in particular
BY TED ORME-CLAYE
With the global betting industry keenly focused on developments in North America, it could be argued that the opportunities posed by emerging markets in Africa and Latin America are being overlooked.
Discussing his experience and providing insights on the African betting industry, Honoré Gaming’s CEO, Cyril Casanova, highlighted the ‘strong potential’ but also challenges present in this ‘underestimated’ market.
SBC: Can you tell us about Honoré Gaming and which markets are your core focus?
CC: Honoré Gaming is a wellestablished brand with a strong presence in French-speaking African countries, in particular nations where French horse racing is very popular.
Historically, our footprint has been in French speaking Africa and we are in a very strong position there. During the last two years, we have been focused on adjusting our platform to be competitive and adapted to Englishspeaking markets.
Cyril Casanova, Honoré Gaming’s CEO
We entered Nigeria last year and have deployments scheduled in Uganda, Kenya, Tanzania, Zimbabwe, and will launch in South Africa this year once we receive certification.
SBC: What makes African betting markets unique when compared with other emerging sectors?
CC: The underlying growth that these markets represent sets them apart, as well as a young population who are open to betting as a form of entertainment. We are talking about markets where there are very few ways to entertain.
Betting creates a lot of jobs, and so in Africa it is an industry that has a very different image to some other regional betting sectors. Also, there is a lot of passion for soccer in many nations, so betting shops provide an opportunity to watch matches whilst providing added entertainment.
We estimate that the underlying organic growth of the Sub-Saharan
African industry stands at 20% per year, much more than the global sector as a whole. Overall, Africa has strong potential and is underestimated - as is the case with many other industries on the continent. The European way of considering things does not always apply, as there are some African countries which are richer than LatAm nations.
SBC: What challenges in particular have you encountered in African markets that set them apart from others?
CC: By far the biggest constraint is the lack of regulation. For example, if a bookmaker receives the wrong information from a data feeder in the UK or France and offers the wrong odds on a match, there are ways for the bookmaker to protect themselves legally. This isn’t so much the case in some African markets.
For B2B providers, risk management must be reliable otherwise you are putting your clients in a tricky situation. When it comes to sports betting, you have to adopt a very strict risk management policy based on algorithms and identify ways to limit exposure, otherwise operators are at risk of losing a lot of value.
From a technical point of view, another challenge is integration of payments and access to API information. This requires a lot of insistence for the right documentation and is often a long process. Overall, Africa is an exciting market with a lot of opportunities, but it is also quite challenging.
SBC: Which countries have the most potential in terms of expansion for international operators?
CC: The markets with the most potential are the biggest countries - Kenya, Nigeria, Ghana and South Africa, which have the most advanced regulation. In general, the more these markets are regulated the more operators and investors can consider them as a way to boost their growth.
Ethiopia, Rwanda, Tanzania have strong potential, as does Senegal and other French speaking newcomers to the regulatory process.
We could see a lot of M&A over the
YOU HAVE TO ADOPT A STRICT RISK MANAGEMENT POLICY BASED ON ALGORITHMS OTHERWISE OPERATORS ARE AT RISK OF LOSING A LOT OF VALUE
next three to five years with some major European and American players which would benefit from increased regulation, although there is a risk with regards to currency more so than Europe and the US.
If we can combine the expertise of the leading betting companies on digital marketing and the online business in Africa, this could create another boom and accelerate growth.
SBC: Do you believe that the technological proficiency of African markets and bettors is underestimated? Can the same be said of other emerging markets?
CC: A common challenge is the size of the average bet slip, in some cases you are looking at 40 or 50 cents per ticket in comparison to say €12 in France. You have to manage a huge amount of transactions across a platform because of this.
Often it depends on who you are working with. Local payments providers do have some shortcomings in comparison to major international firms - you are not working with Visa or Stripe, you are dealing mainly with local monopolies.
However, platforms in some countries such as Nigeria and Kenya are becoming leaders in the continent. From a tech point of view these are very good quality and even if the CRM and bots are less developed than in Europe or North America are still very impressive.
SBC: How important is it for operators to launch localised and tailored products across different African markets?
CC: It is important to consider patriotism, whilst you of course need to consider how many local languages there are. English, French and Portuguese are widely spoken as official languages, but there are so many local languages to address.
A high level of customisation is needed if you want to penetrate multiple markets, covering policies, affiliation, products, languages and marketing. Ultimately, operators must understand that these markets are all very different, and they need to use varying approaches towards features, promotions and bonuses - there are many ways to attract, acquire and retain customers.
There is absolutely a need to integrate a lot to be competitive and to create brand awareness and reinforce the seriousness of your product. Lastly, as addressed earlier, payment methods are almost always local.
WE COULD SEE A LOT OF M&A OVER THE NEXT THREE TO FIVE YEARS WITH SOME MAJOR EUROPEAN AND AMERICAN PLAYERS
SBC: Football is the most popular betting product for African consumers, but are there any other sports catching attention?
CC: Football is by far the number one betting product, although horse racing is very popular in Frenchspeaking Africa, in comparison to English-speaking nations such as Nigeria, Ghana and Tanzania - with the exception of South Africa and neighbouring countries.
Outside football, you have emerging sports that are becoming more attractive, but still account for a very small proportion of activity - UFC, boxing and tennis are popular, as well as cricket and rugby, particularly in South Africa.
People are very passionate about football, but actually don’t bet so much on the Africa Cup of Nations in comparison to the Euros and World Cup, or on local championships. This does present a key challenge and we are focusing on pricing these tournaments more, as this reinforces awareness that you are offering a local product.
SBC: What are your opinions on the igaming market in Africa? Is there potential for further development here and cross selling with sports bettors?
CC: There are many opportunities with casino in Africa, although this is a matter of regulation. Many haven’t regulated yet, but we can see that for the countries that have legislated the vertical accounts for around 30% of betting activity.
It is a great way to attract people and offer an online product in some countries where casinos are less developed. Casino will be the next boom in Africa once regulation is introduced. •
VIRTUAL SPORTS: FROM NICHE ‘NICE-TO-HAVE’ TO SPORTS BETTING’S ‘MUST-HAVE’
FROM A PRIMITIVE
BASEBALL GAME in the 1960s to complex simulations designed to thrill and engage sports betting fans in highprofile environments like Germany’s Bundesliga, virtual sports is now a must have product. Sportradar’s Frank Wenzig explains.
BY CHRIS MURPHY
Virtual Sports have come a long, long way since John Burgeson coded an early form of fantasy baseball for an IBM 1620 back in 1961. With just 20 KB of memory to play with, his game was rudimentary by today’s standards, albeit bleeding edge at the time.
Fast-forward to the present day and companies like Sportradar are shining a light into whole new areas of virtual sports, using technology and relentless innovation to push the boundaries of fan engagement. Sharing his views on the subject with SBC Leaders was Frank Wenzig, the firm’s Managing Director, Gaming.
“The market has changed beyond recognition in the last 10, 15 years,” he said. “Virtual sports betting solutions have gone from a niche, ‘nice-to-have’ for operators, to a critical component in a sportsbook’s always-on operation. That’s particularly true of the last two years when the reduction in live sport left many operators bereft of content
leading to a significant uptake in virtual sports betting solutions.”
According to Wenzig, the evolution of virtual sports betting has been driven by consumer demand. He explained: “Betting customers want a broad range of sports to bet on with all the main markets available to them, as well as hyper-realistic game play with the graphics to match.
Realism is crucial amongst customers who expect the same quality from virtual sports betting as they do live action sport.”
A great example of this is Sportradar’s ongoing collaboration with Bundesliga International in the virtual sports betting space. It’s a longstanding and successful relationship that continues to stand the test of time, with both having been linked for the best part of two decades.
“With two leaders in innovation working hand-in-hand, the move into virtual sports felt like a natural progression for our relationship,” offered Wenzig. “I’m excited because together we have developed a distinctive virtual sports betting solution.
“Incorporating footage from real soccer matches, Virtual Sports Bundesliga is the first virtual sports betting solution to feature the top players from their leagues. It’s a game changer and provides the end user with an experience as close to real life as possible.”
He added: “The solution will help Bundesliga International connect with their fans and reach new audiences outside of the DACH region, using our global network of 900 sportsbook operators to provide a new means of experiencing the excitement and drama of Germany’s biggest soccer league.”
Given the huge appeal of top flight German football, the need to engage with fans in a simple and seamless manner has not been overlooked, as the gaming boss explained: “There are an estimated one billion Bundesliga fans worldwide.
“And for operators wanting to connect with them, we’ve simplified the integration process of Virtual Sports Bundesliga. The solution is available to operators via our remote gaming server (RGS). Once clients have integrated the RGS, new product rollouts are effortless and quick.”
Expanding on the technology
Sportradar is using to deliver the partnership and drive fan engagement, he advised: “Our portfolio of virtual sports betting products is powered by real sports data and features factual team strength parameters and player stats based on an artificial intelligence analysis of data from thousands of matches in our historic database.”
That, noted Wenzing, provides customers with a sports betting experience that he believes is “as close to real life as possible”. He continued: “We had a team of 100 specialist data operators reviewing more than 3,500 Bundesliga matches from the last 10 years, editing video content into dynamic event clips such as players entering the pitch, scoring goals, or stepping up to take a penalty.
“The video clips within the solution are surfaced via an AI and machine learning analysis of real sports data to deliver a realistic overall match perception. We use a sophisticated software component that, in real time, stitches together the match video clips. This creates a vast bank of
match highlights and avoids content repetition, which is key to maintaining engagement.”
Wenzig also predicted that the new solution will affect the industry in a number of ways. “I believe we will see greater demand amongst rights holders for virtual betting solutions as a means to market their brands to fans worldwide,” he said.
“Virtuals provide a unique route to fan engagement and offer a platform to access the sport, the players and the action. Additionally, the gamification of virtual sports betting makes it a softer entry point for those leagues and federations reluctant to enter sports betting directly.”
He believes that for rights holders,
they will have the opportunity to grow their brand on a global level. “Even in territories where there are restrictions on betting and gambling, we have legitimate working relationships in place to ensure cut through,” he explained. “For example, state-owned lotteries in Azerbaijan, Hungary, Russia and Turkey offer our virtual solutions as part of a limited betting offering.
“These are countries,” he underlined, “in which rights holders may find it harder to achieve visibility and reach new or existing fans. Additionally, partnering with us in this manner and engaging with fans in this way can enlarge the scope of adjacent businesses such as merchandising and content subscriptions.”
For sportsbook operators, Wenzig believes that offering virtual sports betting products that are official and include club names, club badges and high-profile players can only increase customer dwell time and overall engagement with the product.
So much for the past and present. But what about the future for virtual sports in a betting space that is continually evolving? Wenzig responded: “As with this past decade, innovation will be key. As pioneers of the industry, we don’t sit still – we’re continually innovating in the space to improve user experience and enhance engagement.
“I believe we’ll see an increase in officially branded content within virtual sports solutions as more rights holders follow the likes of Bundesliga International and Major League Baseball and move into this space.
“Customers really engage with video content – it’s sticky and increases dwell time, so I believe we’ll see an increase in the use of real match footage. We’ll also see a trend towards in-play betting in the virtual space, further enhancing that ‘real life sports betting’ experience.”
The lightning speed of innovation will also play its part, according to Wenzig. “Fast technical development will further blur the line between the virtual world and reality, especially when ultra-realistic 3D animations come into play,” he said. “Technological advancements with computer vision, NFTs and the Metaverse will create opportunities within the virtual sports betting space.”
And finally, there is the omnipresent influence of policy makers to consider - mostly for the good. “Regulation and legislation will also be a key factor in shaping the future of virtual sports betting,” he noted. “The growing amount of regulation and certification in place is a clear statement of the market’s potential for growth and should lead towards a standardisation and harmonisation across different jurisdictions.” •
THE THRIVING ROLE OF STATS BETTING
ABELSON ODDS’ JEEVAN
JEYARATNAM shines a light on how stats betting has evolved from a unique feature in a sportsbook to an integral part of any operators' offering
BY JOE STREETER
From shots on target to player tackles, stats betting and data-driven markets have deeply enriched the match day offering that sportsbooks provide over the last few years.
Jeevan Jeyaratnam, Chief Operations Officer of Abelson Odds, shares his views on why the markets have become so pivotal to sportsbooks, the potential challenges of their growth and whether they could play a role in bridging the gap between sportsbooks and Fantasy Sports.
SBC: Firstly, how important has stats betting become to a sportsbook’s offering?
Jeevan Jeyaratnam: You have only to glance at the landing pages of leading UK bookmakers to see the importance of player and team-related stats bets. Bet Builders have become an increasingly profitable wager and their appeal is driven by stat-rich elements.
Pre-canned bet builders have proven a gateway into this emerging trend, and there are plenty of operators who have dedicated resources to making the same-game acca as simple to join as possible. Without player markets, especially, these can lack originality and appear rather dull. If we accept that we are part of the entertainment industry, then the notion of building a narrative is front and centre; player stat markets are a vital component of that framework.
Localisation is another key reason for the rise in interest in player stat markets. We’ve seen examples of this in our own business. As a client moves into a new territory, we have seen requests for us to add goal scorers
from the local leagues, offering the opportunity to wager on teams and players that the customer base is familiar with. We have recently added Cypriot, Colombian and Chilean goalscorers for this very purpose.
SBC: We have seen the growth in ‘shot betting’, what makes this type of market so appealing to a punter?
JJ: With many of the more granular markets, like tackles and passes, it is far harder for the punter to keep up with the tallies. There are widgets on most sites to help, but it is a better experience if you can quantify the numbers yourself. Shots are one such market where this is possible.
The other adage is that people want to see action, shots and goals are correlated and punters love to bet on goals, so it makes sense that they would want to bet on shots, which occur with greater frequency.
There is also the subtle push from operators, because from a compilation point-of-view, there is more data available, and therefore confidence, with the pricing. Therefore, pushing customers towards adding these markets into their bet builders is sensible.
SBC: Have there been any emerging trends in stats betting over the past year? Was there an uptake during Euro 2020 and the Copa América or did markets remain steady?
JJ: I can’t comment on bookmaker turnover during the big international tournaments, I’m not privy to that information, but certainly during the Euros there was a push towards providing more options for customers. It’s easier to handle this when there is a single key focus, like a major summer competition. Of course, it helps when squads are defined and named, as they are during these international competitions.
The trend is, very slowly, moving from offering only the “over” portion of the bet to offering two-way lines. This is an expected natural evolution as suppliers and operators continue to gather data and tweak algorithms, affording them the confidence to offer a more rounded and differentiated product.
Two-way markets require much sharper pricing acumen - a critical ingredient if operators are to offer
realistic cash-out opportunities for players. If you don’t know the “true” probability for a player’s expected tackles and you decide to offer a defensively priced one-way market, cash-out calculations are likely to be favourable to the punter, ebbing away operator value. It is integral to the whole business to understand the
“true” price of any selection at any given juncture. Pinnacle, for example, has built its entire business on this philosophy. that embed on to bookmakers’ sites, updating in real-time.
The more granular a metric, the greater the chance that the live tally could be adjusted post-match. This is especially true of passing metrics. To provide the best possible experience for users, there needs to be some confidence that the bet has won and won’t be adjusted following a post-match review by the scouting team. The balancing act between speed and accuracy is crucial for providing increased lifetime value for bookmakers and entertainment for punters.
SBC: As stats markets become intricate and specific, what are some of the challenges that could arise?
JJ: One of the bigger challenges is ensuring punters are aware of the status of their bet at any given point. OPTA has some great data widgets
SBC: Do you think we will see more ‘Price Boosts’ around stats betting and how fruitful an engagement tool do you believe that could be for operators?
JJ: ‘Price Boosts’ are part and parcel of a marketing team’s arsenal, so I am sure that they will continue with this approach, although whether they provide longer-term value for the sportsbook is open to scrutiny.
Cleverly, during the Euros, one of the exchanges was opening markets on the price boosts that other bookmakers were promoting. This provided a haven for those wishing to lay off the other side of the price boosted bet. There was no shortage of liquidity on the lay side because users were laying at the right price. The fixed odds book was
taking the negative expected value (EV) and therefore risk, while the layer on the exchange was gaining positive EV and, in theory, would profit in the long term.
SBC: Is there room for integration with fantasy sports and stats betting? Could a combined approach between the two strengthen engagement with a new demographic of punters?
JJ: This has been the holy grail for operators for some time. In the USA, pre-PASPA, Fantasy Sports carried huge weight. Without legal sports betting in place, it is easy to see why the sports and stats mad US customers took to it so vehemently. Over in Europe, where a legalised sports betting framework has existed in many territories for decades, trying to convert the fan the other way has proved much harder.
That said, as player markets become more intricate and the advance of bet builders allow a real narrative to be spun, the gap between the two verticals has become smaller. Scout Gaming is a good example of a business that has done a very good job of helping to bridge the gap.
SBC: What do you believe will be the next evolution of stats betting and do you think it could become a more prevalent part of the sportsbook offering?
JJ: The next step will be to transition fully to a two-way offering that can be wagered in-play with cash-out. Uptime is also very important. PointsBet’s quant arm, Banach, managed to maintain totals and money line wagering through the lifecycle of the game without suspension.
The user experience is greatly enhanced by allowing markets to remain open longer, it becomes a far more fluid experience. While it will be some time before we can include all stats, especially player stats, in this type of free-flowing offering, it should at least be an aim.
SBC: In terms of the demographic of punter that engages with stats betting markets, have you noticed it leans towards a more casual or experienced bettor?
JJ: The more granular player stats markets are still very much at an embryonic phase of development; therefore operators are very cautious as to stake limits and are very quick to restrict accounts that appear to have an edge.
While the punter has the choice to bet only the markets they want to, a sportsbook has to offer prices on nearly everything. This leads to a safety-first approach. All this means is that these types of bets are predominantly aimed at the recreational punter, and really intended as inputs into bet builders. As the markets evolve, we can expect operators to have more confidence in their pricing partners and maybe stake limits will begin to increase. •
FREDDIE LONGE: HOW IMG ARENA IS PAVING THE WAY FOR NEW REVENUE STREAM
HAVING RECENTLY
BROADENED its Sports Media product portfolio with the launch DP World Tour ShotTracker, it’s evidently a case of busy times for IMG ARENA. Executive VP and Managing Director Freddie Longe took time out to talk about all things IMG and what lies in store for 2022
BY CHRIS MURPHY
SBC: For those less familiar with the IMG ARENA brand, can you describe its existing focus within sports betting?
Freddie Longe: IMG ARENA is a sports content and technology business. Our vision is to evolve and inspire how fans engage with sports. The business was launched in 2012 to leverage our rights expertise and ambition to pioneer the mainstream introduction of official data rights to the sports betting industry. We paved the way for a new revenue stream for our rightsholder clients, whilst at the same time delivering greater value to the sports betting industry.
We have since expanded our Sports Betting product suite with the addition of live streaming, next generation immersive event centres and official virtual sports products.
At the same time, we have strengthened our relationship with rights holders via the acquisition of FlightScope Services and the launch of our Sports Services vertical in 2021. This ground-breaking suite of data collection methods has enabled fans to enjoy much richer data driven products and a comprehensive range of next-generation markets in tennis, golf and MMA.
SBC: Can you tell us more about IMG ARENA’s business pillars and how they coexist within the IMG ARENA business model?
FL: The four pillars are: Sports Services, Sports Betting, Sports Media and Sports Performance. We have reached a new frontier – the data age of sport – where the ecosystem for the modern fan is ‘always on’ and the competition for a fan’s attention is greater than ever. We believe that we must develop our productised technology and layer in content and experiences across all touch points to keep fans immersed throughout the value chain.
This starts with rights holders and via our Sports Services we help them
to grow their reach and to meet the needs of their existing and potential audience.
Our Sports Services pillar is underpinned by cutting-edge content creation. Building out fast and reliable data through our configurable applications, player and ball tracking and computer vision capabilities.
Data is brought to life across a growing suite of products and content feeds, including our award winning Golf Event Centre and DP World Tour ShotLink. sport-to-fan vision truly comes to life.
Our Sports Services team collects shot-by-shot data and produces audio-visual feeds from the par-three holes on the course. The complexity and levels of accuracy are second to none. For example, we can measure the position of a ball on the green to within half a millimetre’s accuracy. This data powers our three use cases – Sports Betting, Sports Media and Sports Performance.
For Sports Betting, fast path data feeds combine with the live video stream within our front-end solution – The Golf Event Centre – to allow fans to ‘step-inside’ the ropes and enables true, multi-market in-play betting on golf for the first time. Side bets on the
longest drive or the player nearest the pin might be standard fare in the average club four ball or corporate golf day, but until we launched the Golf Event Centre the ability to wager on professional golf has been a lot more limited.
Analysis by H2 Gambling Capital suggests 95% of the gross win on golf was derived from pre-event betting – a figure that is much higher than in tennis and football. When you compare the suitability of certain sports to a live betting format, golf stacks up incredibly well.
The data we have seen since the product went live in 2020 is that the Event Centre more than pulls its weight as a customer acquisition and retention tool. This same data feed is now powering an increasing number of non-betting services across the DP World Tour and its digital assets, and we expect this to continue evolving over time.
SBC: How does that all come together?
FL: One case study is our golf offering for the DP World Tour, where our
DIGITAL SPORTS BETTING IS EXPLOSIVE RIGHT NOW
SBC: Last month saw the launch of ShotTracker, a highly-sophisticated new product. How much of a gamechanger is this for golf fans and what does it bring to the sport?
FL: A part of our Sports Media product portfolio, DP World Tour ShotTracker is one of the most sophisticated sports data products ever created and builds on the success of the Golf Event Centre. This is an exciting extension to our relationship with DP World Tour and, through our technology, will give golf fans greater insight into how their favourite players are performing and how the tournaments are unfolding. We have created a completely fresh way to engage with the sport as part of our ongoing commitment to enhance the fan experience
SBC: How do sports fans and consumers get to enjoy products like this?
FL: Through the various points of distribution we are establishing. We have a large number of soon-to-launch tier one and two sportsbook operators currently integrating the products as well as via an additional range of future digital customers where conversations are gathering pace.
SBC: How does that align with all that OpenBet brings to the fold?
FL: The closing of the OpenBet acquisition is still subject to regulatory approval, which is anticipated later in 2022. The principal products we deploy within IMG ARENA’s Sports Betting pillar are live streaming, fast path data and our immersive front-end solutions, which can be modularised— either packaged or sold as isolated component parts. This is the very logical point at which the IMG ARENA and OpenBet businesses would come together. By providing sportsbook operators with the platform, engine
and content to deliver a world-class sports betting proposition for fans around the globe.
Factors such as the changing regulatory landscape of the overall sports betting industry in particular since PASPA was repealed in 2019, and growing digital infrastructure are fueling the demand for sports betting. It is now firmly part of the overall sports entertainment ecosystem. The OpenBet platform powers many of the pre-eminent sportsbooks and lotteries in the world; the combination of our relationships with rights holders, content creation and front-end products, would differentiate our offerings.
SBC: What are the most interesting growth opportunities for IMG ARENA and can you tell us about your plans in a more general sense for 2022?
FL: Digital sports betting is explosive right now, so there are enormous growth vectors available. Fast, accurate and official data is at the heart of modern sportsbook offerings and for a business like ours, we can see many areas of exciting expansion and growth.
Number one is territorial expansion, being driven primarily out of the US, with the brisk pace of regulation changes. But we’re seeing global support for the adoption and acceptance of digital sports betting as a form of entertainment.
Another is sport expansion. In Europe, historically a lot of the focus is around football, but the landscape is evolving. For us, golf is still nascent as a proposition and therefore an incredibly exciting growth opportunity as the perfect in-play betting sport,
but you’re also seeing all sorts of additional sports entering in the fray. Tennis enjoyed massive growth during the COVID pandemic, and niche sports like cycling, pickleball, and padel tennis grew in popularity as well. Sportsbooks are broadening their horizons to meet the needs of the modern fan.
Then there is product development fuelled by unprecedented levels of technological advancement and, in particular, the types and depth of data available. In golf, for example, the depth of data allows you to power 35,000 new betting markets at every tournament. Live statistics for every player, every hole and every shot at a latency of less than one second didn’t exist. This data has evolved the fan experience and enabled deeper levels of engagement.
When you think about the modern sports fan, they’re very technologically sophisticated and demand incredible levels of innovation and consumer experiences. As a consequence, I expect we’re going to see a huge amount of ongoing diversification of product offerings. And it’s an exciting opportunity for IMG ARENA to play a role in that.
The US, in particular, is a completely blank canvas, so we are seeing a lot more creative thinking and convergence between rights holders, sports betting and sports media. There is a potential future where rights holders become sportsbooks, where sportsbooks become broadcasters, where broadcasters become sports betting operators. And IMG ARENA, is well-positioned to sit right in the middle of all of that given our vast relationships across those various ecosystems. •
