The biggest growth driver for sportsbetting in recent years has been the proliferation of in-play betting, widely cited as the new battleground for European sportsbooks

Here, we examine the industry’s first in-play betting report, carried out by GamblingData, which provides a unique insight into the companies at the forefront of the real-time wagering phenomenon that is driving huge growth across the sector

IN BECOMING THE new battleground on which sportsbooks now compete against each other both online and via mobile, in-play betting has established itself as the key revenue driver for most, if not all adoptive sportsbetting operators. However, until recently, there had been little independent market research that could allow us to better understand the impact of this dynamic market trend on the nature of betting and the strategies that operators now implement as a result.

The first research of its kind to surface was released in September 2011, published by GamblingData in conjunction with Sporting Solutions. The ‘In-Play Betting Report’ sought to examine the growth of live betting in two parts: a qualitative analysis of the in-play offering of five leading sportsbooks in tandem with an examination of the impact that in-play is having on the sector itself.

Since then, GamblingData has issued an updated version (Winter 2012 In-Play Tracker) that comprises eight companies over an extended 14-day period to gain a more developed insight into the average number of markets and events that today’s betting operators are offering.

In providing statistics from GamblingData’s Winter 2012 In-Play Tracker (IPT), we can see that live sports streaming has becomfe an integral component of today’s in-play betting offerings; the report detailing how the volume of events streamed by the leading sportsbook operators is matching the rate of overall in-play growth.

In its inaugural quarterly IPT report, GamblingData found that Bet365 led the way in terms of both sports covered and events offered within its in-play proposition, while William Hill was observed to offer the most in-play markets per event.
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Today’s in-play betting market and how it is likely to develop into the future

IT’S CERTAINLY NO exaggeration to describe the recent growth of ‘in-running betting’ (IRB) on sports as explosive. IRB can be defined as any sports bet struck after the start of the event itself, with up 80 percent of all betting revenues made on that event now being struck by sports bettors ‘in-running’.

Just five years ago, the position was probably the exact reverse, with 80 percent of revenues being struck before the event got under way; that’s an extraordinary change in player behaviour, and few people, frankly, successfully predicted the seismic change seen since the UEFA European Football Championships in 2008.

Nonetheless, it’s been easy to see why consumers have taken to this new opportunity, and the fundamental reasons for its growth.

Live streaming

Firstly, we’ve seen an explosion in the amount of live sport being broadcast, whether on satellite TV, over the Internet or via the tailor-made live streaming many operators now provide their customers on their sites.

This live-streaming sector for sportsbetting was embryonic just a few years ago; now, the largest sports-rights aggregators are making available more than 5,000 live sports events, up nearly 50 percent from just two years ago, with football, tennis and basketball collectively taking the vast majority of events and betting revenues. This live sport is often shown at convenient times for consumers and is now increasingly accessible through mobile, tablet and other apps, all of which has contributed to the sector’s extraordinary growth.

Additionally, we’ve seen a huge uplift in both the range of markets and the ‘depth’ of subsequent prices offered on those markets, aided by smarter trading tools.

A good indication of the sector’s growth can be seen in the figures published by two listed European operators, who started providing analysts and investors their IRB share of total sportsbetting revenues in 2006, realising the potential of this buoyant new sector. Then, it represented considerably less than ten percent; in 2011, that share had risen to over 50 percent, and both listed operators forecasted this to be “above 75 percent” for 2012 and beyond.

The all-important gross win margins have improved too, from perhaps two to three percent five years ago, to a far healthier five to six percent today, achieved largely through operators relying less on guesswork, and employing better tools and more accurate prices.

So where does this sector go from here?

One could argue that despite all the creative efforts of the operators, the sports bettor is still something of a creature of habit.
A typical high-profile football match (still clearly the most preferred sporting event for IRB) shown live on TV, would generate the vast majority of its total in-play betting revenues on the traditional ‘outright’ 1X2 market.

In Europe, for every Euro bet during the 90-minute event, perhaps 60 percent would be on the 1X2 outright market,

30 percent on the ‘over-under’ goals markets, and the remaining ten percent on the many other markets available throughout the game. In Europe at least, consumers clearly love playing on the two markets they know and love, on their favourite sports, almost to the exclusion of everything else. That position
would be similar for the Asian operator and Asian player, albeit on the Asian handicaps with the ‘over-under’ markets dominating.

Encouraging the consumer to expand their betting repertoire is a constant goal for operators, as this typically leads to margin improvement, and it seems certain that this will continue to dominate operators’ plans for the next decade. Having up to 90 percent of IRB bets made on just two core markets is something operators will surely want to adjust over the next five years.

Whether that’s a continued search for new betting markets that better piques the interest of players, or by growing the share of‘other’ markets through better promotion remains to be seen, but the search will no doubt continue. Adjustment of the pricing of those events will also likely be a future requirement for operators, and a development from suppliers.

One notable feature over the past few years has been the gradual ‘commoditisation’ of pricing, particularly on the key markets of the number one IRB sport, football.

The increasing use of automated trading tools and the collation of market prices through their associated algorithms have tended toward homogenous prices, thus removing any obvious differentiation for operators who use the same tools, and perhaps tending against customer loyalty.

Those operators who choose to use software suppliers with human traders to support their trading platform and trading tools will surely be at an advantage as they continue to find sustainable ways of offering their customers value, and beating their competitors in the ultra competitive in-play market over the next five years.
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As marketing opportunities go, the London 2012 Olympics may stand out as a prime vehicle for sportsbook marketers to take advantage of

...but the reality is that due to restrictive advertising regulations, great care must be taken in the development of any campaigns associated with Olympic events so that they do not contravene guidance set down by the ‘Organising Committee’.

THE COMBINED EFFECT of restrictive Regulations on advertising during the Olympic and Paralympic Games1, and the registration of a number of Games- connected trademarks, creates a marketing equivalent of martial law. Breaches of the Regulations are criminal offences punishable by criminal prosecution and fines of up to ?20,000 per offence in the Magistrates Court or even higher if tried in the Crown Court. Infringement of trademarks may result in civil suits with injunctions and huge claims for damages.

No doubt there will be a real temptation for some businesses to try to find a way to use the draw of London 2012 to their own commercial advantage. Apart from The National Lottery, which is a major contributor to the Games, there are no other gambling operators who are sponsors or partners. With so many sports to bet on (although views about the level of likely interest differ markedly), many operators and affiliates must be looking to gain some material benefit by mentioning the Olympics on their websites. Doing so would raise a number of complex legal issues due to the strict intellectual property rights protecting various registered Olympic marks including the various Games’ logos and the words “London 2012”, “Get Set”, and “Olympic” and even simply the number “2012”.

The London Organising Committee of the Olympic Games and Paralympic Games Limited (‘the Organising Committee’) has produced some guidance (available on the www.London2012.c0m website) in which they warn against any suggestion of any association or link with the Games that, in their view, would extend to the use of any “athletic images” or anything similar that could be intended to evoke the Games. The guidance emphasises the need to avoid, if at all possible, any use of words or imagery to single out bets on the Olympics that might imply some branding association. The recommendation is that bets on the Olympics should be marketed in the midst of other regular sports bets, without any special treatment. It has to be said, however, that the guidance is not the law; it is the Organising Committee’s interpretation of the law and so may be a little on the cautious side for obvious reasons. It is certainly a document that should be taken into account by every sportsbook marketing department and affiliate manager.
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