In pole position: why Formula 1 has become a magnet for gambling brands

After 40 years of Bernie Ecclestone being at the helm of Formula 1 (F1), gambling sponsorships finally broke into the inner circle of motor racing for the first time after new owner Liberty Media took over the business in 2017. This momentum has continued with PokerStars signing up as the official betting sponsor of F1 just last month. The multi-year agreement with the premier motorsport series runs through to 2023 and will see the poker operator’s branding feature exclusively on European broadcasts during every season for the duration of the deal. The partnership will be facilitated by virtual advertising specialist ISG, which will specifically target regional audiences with the PokerStars logo on race weekends. Two months prior, PokerStars’ rival, partypoker, made inroads into F1 sponsorship, alongside igaming sister brand PartyCasino. The pair sealed a multi-year partnership with F1 team McLaren Racing. That agreement, which officially launched at the iconic Monaco Grand Prix on 23 May, saw the PartyCasino logo appear on the driver crash-protection system of both McLaren MCL35M race cars, while branding was also plastered across the helmet of the team’s Australian driver, Daniel Ricciardo. Partypoker parent company Entain said there would be “McLaren-themed casino content” and “access all areas” games on the PartyCasino and partypoker websites as part of the contract, while PokerStars marketing director Tom Warren said: “Working with F1 provides us with the opportunity to reach a fan base whose passion for sport goes way beyond motorsport.” All this talk of F1-branded casino content and passion that goes “way beyond motorsport” is evidence that neither of these operators are about to invest heavily in F1 sportsbook betting. This is reiterated by the fact they both opted for casino- and poker-focused brands over sports-led options. This begs the question: why choose F1 if they are not chasing F1 bettors? And what kind of return are these companies expecting on their major investments? “F1 is the very definition of brand awareness because it has global appeal,” says Paul Fitchford, an igaming, casino and esports consultant who currently works as MD for iGamingUK. “Think of the countries they visit like Monaco and the types of eyeballs they get on their brand.” Fitchford, who has previously worked for operators including bet365 and Sky Bet, bets religiously on F1 every week. He adds: “There is nothing magical in the gambling deals. They won’t be thinking this is suddenly going to drive a load of F1 betting, but they will hope it can add credibility to the brand at least.” Fitchford recalls the 2014 sponsorship of McLaren Mercedes by whisky brand Johnnie Walker ahead of the Monaco Grand Prix. “I remember thinking, ‘What the hell does whisky have to do with F1?’” But considering he remembers the details of the activation all these years later, the deal clearly had the desired effect for the Diageo-owned distiller.

Change of attitude

Alcohol sponsorship was fair game back in 2014 when the marketing of gambling companies was still outlawed by the sport’s former boss and billionaire Ecclestone. Operators have increasingly grown their presence in F1 since Ecclestone retired in 2017. Kenyan bookmaker SportPesa was the first to break the mould via a lucrative deal with Racing Point once Liberty Media lifted the ban in 2018. That agreement was short-lived, lasting only 12 months before termination, but that PokerStars has been able to seal an official betting partnership with a sport once opposed to gambling demonstrates just how much F1 has softened its stance in this regard. Part of Liberty Media’s takeover as F1’s new owner that enabled the liberalisation of gambling marketing also saw Sportradar brought on board as the exclusive provider of official F1 data. The biggest development resulting from that partnership has been in-race betting, launched during the 2020 F1 season. “Up until recently, bookmakers haven’t had access to adequate real-time data for F1, so the betting offering has been limited,” says Sportradar MD of operations for betting and gaming Dalraj Bahia, echoing the gripe of F1 bettors. To address this, the supplier’s live odds team have worked with F1 to analyse untapped, historical data to create live odds models in the hope of upgrading the betting experience for operators and consumers. The results have seen Sportradar launch 21 in-play markets for F1, eight of which are unique. These include ‘total number of driver overtakes’ and the chance to bet on which driver will have the fastest lap for each lap of the race. Collecting this data and developing these markets is no mean feat as every car produces 1.1 million data points per second. Sportradar uses car telemetry to collect measurements at remote points before automatically transferring that information to equipment for monitoring. Since launching its Live Odds/Live Data solution at the start of the 2020 season, Sportradar has seen a 250% increase in the number of clients taking the service. Bahia adds: “F1 is a huge sport with great fan engagement in every corner of the world, creating significant potential for operators as F1 unlocks its data for the sports betting industry.” But have operators really capitalised on that opportunity? Or perhaps the more pertinent question is: do they even want to? “When I was an odds compiler, I would try to come up with alternative markets, looking at the best of the rest and the interesting battles in the midfield,” James Greenfield, F1 and PDC darts analyst for London-based odds provider TXODDS, tells EGR Intel. “You can come up with all sorts of interesting submarkets, but very few bookmakers do it because they say the turnover isn’t big enough to warrant it,” he adds. When Damon Hill won his sole championship title in 1996, Greenfield recalls Coral said F1 accounted for about 5.5% of sports betting turnover. “It would be nowhere near that now, probably closer to half a percent,” he estimates. On the other hand, a Sportradar spokesperson said: “The uptake in F1 betting is driven by how well it performs for our operators, delivering a solid return on their investment. On average operators see a 20% trading margin, which ranks highly when compared with other sports.” Greenfield got heavily involved in F1 in the mid-90s when he set up one of the first F1-related websites in the world. It was called F1 Betting and was effectively a blog before blogs. Bookmakers got in touch as it gained traction and he spent the following 15 years working as an odds compiler. He remembers the “glory days” of the late-90s and early noughties when it was much easier to get quite large bets on; a time when a £500 stake on a 100/1 shot would be accepted without hesitation – not to mention paid out in full for lucky winners. “As the internet bubble burst and lots of companies consolidated, that became increasingly difficult,” says Greenfield. “The odds aren’t as good because they are making fewer mistakes. When I first started, I realised that I knew much more about the sport than the odds compilers. There were some horrible mistakes and that made it very profitable.” Greenfield, who is now based in Dumfries and Galloway, would spend hours trawling through Teletext to spot those mistakes. This was a time before odds comparison sites and the speed that oddschecker provides. He would regularly ring 10 different bookmakers and ask them to read the prices down the receiver. “The errors were there and if you worked hard enough to shop around, there were plenty of good value bets to take advantage of,” he adds. The landscape now is very different. The mistakes have disappeared and so has much of the value. The pricing is largely homogenised due to the copycat nature of the industry and operators have shown little appetite in investing in the F1 betting experience due to its low turnover, despite an influx of new data.

Shortage of skills

One accusation levelled at operators is that they aren’t willing to pay for top trading talent because the demand for betting on F1 simply isn’t there. This can often lead to traders pricing up F1 markets when their talents lie elsewhere. Greenfield prefers to bet on darts these days, simply because the value is greater. The fact that F1 has been dominated by one driver, Lewis Hamilton, and one team, Mercedes, over the last seven years has done little to incentivise creative odds-making, although Hamilton’s ongoing rivalry with Max Verstappen is certainly spicing things up. It is also historically a sport embraced by some of the shrewdest punters around. F1 fans can obsessively spend hours reading about every component of the sport in minute detail. If traders get sloppy, they will be punished. “I think because they’ve always struggled to make decent money off it, they tend to just offer F1 as a service because there’s a huge television audience,” says Greenfield “They feel like they have to do it, and if Coral are doing it then Paddy Power has to do it, and vice versa. But there is not a chance they are going to make as much money as football,” he adds. While Greenfield is a professional trader, some of his grievances are shared by iGamingUK’s Fitchford, who is a recreational bettor in every sense of the word. He puts his hard-earned cash on 23-year-old Brit George Russell to score points every week, simply because he likes the driver and Williams is his favourite F1 team. He is also fed up of prices being too short to enhance the viewing experience and insists this is an indication that traders have no idea what will happen. “There are certainly more markets now but nowhere near on the scale of football, so they’ve got a long way to go,” Fitchford tells EGR Intel. “They have three practice sessions, qualifying and then a race, so there is an opportunity and so much to bet on for people who like to watch F1 every weekend.” Despite the advancement in in-play markets, he feels the pre-race options are still starved of engaging content. “You can’t bet on an individual and the way they will go out of the race. What if I want to bet on a driver to crash into a wall, or on mechanical failure, or for the pit-stop team to make a massive mistake?” Even those firms that have spent millions in marketing their brands across F1 have chosen not to invest in the betting itself, instead using their capital to cross-sell customers into high-margin verticals like casino or poker, where both PokerStars and partypoker have identified an overlap. Greenfield has a partypoker account as it is one of the few firms that will still take his bets via the sportsbook, but the markets are still very limited, in his opinion. “I thought, for a company that is spending god knows how many millions in advertising trackside, that they might actually start promoting their F1 betting, but it is much the same, a limited amount of markets and they’re not really pushing it,” he adds. It is worth noting that this write-up has provided a UK-centric outlook. Sportradar said the introduction of in-race betting on F1 has been a major catalyst for growth in mature European markets like Italy and Germany, as well as emerging markets like Brazil. In Italy, the turnover is much greater because the sport is a cultural phenomenon. Greenfield used to price up the odds for an Italian bookmaker and said that while shop punters would pile money into Ferrari, the Italian Grand Prix fans were very astute. Because they followed the sport so closely, it was a real challenge as they knew which drivers would perform on which track. But fair play to those Ferrari diehards. What is sport if it’s not tribal? The best thing about each event is being able to cheer on your favourite player or team; just ask the sea of orange fans whose love for Verstappen is matched only by their contempt for Hamilton. “F1 is all about the drivers and teams,” Fitchford concludes. “People want to support or bet against particular teams and individuals. I would love to bet on Hamilton crashing out after making a mistake because he bores me. But all I can do is bet against him on the outright.” With some races lasting up to two hours, the sport has to be exciting for on-track spectators and the cumulative global TV audience of 1.5 billion (471 million unique viewers) the sport drew in 2020. Betting companies are in a great position to provide that entertainment, but is it really worth their while? Time will tell.