Yet another sportsbook?

One thing the online gambling sector isn’t lacking is new sportsbooks, with a fresh launch seemingly coming on a weekly basis during 2016. The latest under starters orders was 21Bet, which launched this week, while high-profile debuts from Amaya, The Sun and LeoVegas have also made headlines. But what’s behind the sudden rush?

Driving the change is the desire of gaming operators to enter the market, and it’s a topic we discuss at length in the upcoming issue of eGaming Review. For a long time sportsbooks were the domain of operators with a history in the space and required a very specific skill set, but like so much in 2016 the rise of the machines has had a major impact. Automation has changed things for everyone.

Speaking to suppliers helping to drive the sportsbook boom there is a sense the market has changed dramatically through the addition of algorithmically-driven software that means operators no longer need huge trading teams to compete. “With the rapid increase of companies offering betting platforms plus the readily-available data and trading services, it has never been easier to add a sports betting vertical to a gaming company’s offering,” Marc Thomas, head of product at SIS, says.

And he adds that the decision to launch once the heavy lifting of trading has been taken care of is a no-brainer. “Gaming companies have been well aware that a large proportion of their customers will be active within sports betting as well as gaming, if only as recreational or major event customers. Therefore gaming companies can rightly feel that they are missing out on a proportion of wallet,” Thomas adds.

LeoVegas points out in its IPO prospectus the dual benefits of gaming brands launching a sportsbook, with it acting as both an acquisition and retention tool. “LeoVegas believes that a sports betting offering will attract more customers who are interested in sports betting to LeoVegas, thus providing potential for customers to opt to use both casino and sports betting at LeoVegas while increasing loyalty among existing customers,” the company said.

The perfect fit

Dave McDowell, CEO and co-founder of FSB Technology, says sportsbooks are the perfect fit for gaming operators. “With games and events changing minute by minute they give them far more marketing opportunities than the comparatively static world of slots and tables games. These will give them the opportunity to cross-sell to existing gaming customers with an interest in sport,” McDowell says.

And he believes there are inherent advantages within the existing business models of gaming firms that will allow them to compete. “Most gaming operators have a better understanding of their customers than their counterparts in sports betting. They live and die by their CRM and therefore know that treating those customers well and retaining their loyalty is the priority. Maintaining that approach will be very advantageous.”

We’ve already seen some gaming operators, most notably Amaya with its BetStars brand, try and innovate around product, while 888 is trying to lead with more recreationally focused marketing. But both McDowell and Thomas believe one of the keys to cutting through will be falling back on their existing skill set and applying CRM knowledge to the sports betting space.

“Most gaming operators have had to build very sophisticated systems to survive and grow, such as predictive analysis of client behaviour and efficient bonusing. Assuming these can easily be ported across, gaming companies could find they have an advantage over sports betting operators who have sometimes been slow to embrace new methods,” Thomas says.

The question is can gaming operators really reinvent the world of sportsbooks for a mobile-first recreational audience? We’ve seen the first attempts at this with BetStars Spin & Bet product, and the results of that will be watched closely. But other operators are far more reliant on their technology partners so we would expect innovation to be less product led and more marketing focused.

If, as McDowell and Thomas suggest, the gaming world can bring its deep knowledge of CRM to bear on sports betting it could find some success in this most competitive of fields. There just remains the problem of getting the customers through the door in the first place. Nobody said it was going to be easy.

Check out the April issue of EGR for an in-depth look at gaming brands entering the sports betting vertical