(Category: Sportsbetting supplement)
Posted by joginvik
Saturday 28 July 2012 - 13:26:47

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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