BLOG OF FINTAN COSTELLO - MOSTLY ABOUT WHERE DIGITAL MARKETING OVERLAPS WITH THE GAMBLING INDUSTRY. 

Super Like Your Bet

If sports bettors where rational the Betfair Exchange would be the largest betting platform in the world. So simply put, sports bettors are not price sensitive and given an industry average of five to seven accounts each, they are also not brand loyal.

 

The bookmakers have largely themselves to blame for this by offering a largely undifferentiated product and a race to the bottom on pricing, the recent panic of Best Odds Guaranteed Plus is an example of margin suicide. This coupled with more and more money being thrown at TV, affiliates and welcome offers leaves bookmakers no where to go but bust or merge with a competitor.

 

The one thing that the big bookmakers could rely on is that building and running a Sportsbook is difficult to do. This has kept the competition in Sportsbook to a relative small number of players particularly when compared to the Bingo and Casino industry. Just the lead time and capital that is required to set-up and run a Sportsbook , including the platform, a trading team and hiring the boffins to manage your risk is significant. This moat has offered plenty of protection to Sportsbooks and allowed them to profit massively from the growth of online betting.

 

The bad news for Sportsbooks is that the moat is disappearing quickly.  In the same way that Bingo and Casino software has been commoditized into off-the- shelf software, everything that made it difficult to launch a Sportsbook can now be rented cheaply and quickly.

 

The number of companies offering odds feeds, risk management and Sportsbook software platforms (and more importantly platform APIs) is growing and most importantly costs are falling dramatically. This combination is creating the ideal environment for a renaissance in sports betting and is creating plenty of opportunity for the disruption of incumbents.

 

In recent months we’ve seen the launch of Bookee a tinder style betting app. Apart from the simple to use interface, the ability to for you and a friend to share the stake on a bet is fascinating innovation. More importantly the fact that they where able to get the product to market would have been considered a miracle five years ago.

 

Looking around the industry we have the likes of Squawka building fun betting products directly into their platform and leveraging the large football audience they have access too. Out of Dublin we have SportDec with betting built into a live score and football news app.

 

All of this shows we will see two key trends. On one hand, every casino, poker and even bingo brand in the world, that does not already have a sportsbook, can easily just add a sports betting tab to product and get started. If we look at just Leo Vegas, Mr Green and 32Red all of which are excellent casinos all making a big push to keep their players on site for their sports bets.  This turning of the tables on the Sportsbooks, who have made up for low Sportsbook margins by cross-selling to gaming products I believe will be significant.

 

On the other hand we have the young disruptors, it is now relatively straightforward for two smart guys sitting in a garage somewhere with a crazy sports betting idea, to turn that idea into a reality. At some point, one of these teams will hit upon the killer idea that turns the industry upside down.

 

In the online sports betting your competitors are now only a right swipe away.

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