Login/Register
Red Tiger
Red Tiger
Pariplay
BigTimeGaming

Sports betting: Lessons learned from the pandemic

8th September 2020 8:36 am GMT
Paolo Personeni Sportradar

Sportradar’s managing director of Managed Trading Services (MTS) Paolo Personeni analyses the effect of the pandemic on sports betting operators

What is the key lesson that you’ve learned from going through this pandemic?

The pandemic has been, and continues to be, unprecedented for us all, and has impacted the industry in ways no one ever imagined. Many bookmakers are only now rethinking their traditional business models and realising the importance of having as broad a portfolio as possible including alternative betting products that have proven to generate crucial revenues during the crisis. Alternative betting products such as virtual sports, esports, and Sportradar’s Simulated Reality, were previously viewed as complementary to live sport, however the sudden lack of live sport this year has put these products front and centre for many global brands. This has a direct effect on trading and risk management, including Sportradar’s MTS, as the rapid and unexpected release of new betting content is accompanied by unknown and/or different risk profiles. In this case both the risk management platform and the processes that surround it need to be highly flexible to instantly manage it.

Have you (the MTS team) changed your business strategy to work more closely with your customers?

There has not been a need to change our MTS strategy. We have always worked very closely with our customers and are in daily contact with them, be it through our Operational Account Managers (OAM) or ITS managers. Our main area of focus has been accelerating our processes and constantly improving our emphasis on our customers’ requirements.

Our MTS Integrated Trading Solution (ITS) plays a key role in our strategy. With ITS we give our customers full access to our technologically mature risk and trading tools as well as our in-house developed AI-derived algorithms, which enable them to manage their operations more flexibly, to scale processes more easily while retaining full control at all times. ITS would not be as effective without our OAM and ITS Managers working side-by-side with our valued partners to create and closely monitor trading strategies.

From your perspective, how have operators been impacted by the pandemic? What challenges did they face or will continue to face in the coming year?

Overall, our customers tell us they have faced very similar challenges, coming in waves. Firstly, with the sudden lack of sporting events bookmakers were faced with overcapacity and high fixed costs. At the same time there was an imbalance between trading experience in popular sports and the remaining fringe sports such as table tennis or esports or alternative betting products such as Simulated Reality. This led to the double challenge of managing the new and different risk profiles (emergency content) whilst maintaining a correct balance between players’ experience and risk management.

In the second phase, bookmakers suddenly had to cope with a dramatic increase in sports betting content, with the majority of previously postponed events rescheduled within a narrow timeframe. This situation, together with a flow of new, emergency products, led to a congestion of content. Finally, bookmakers had to manage their internal fixed costs, while also facing reduced revenues. Several bookmakers find themselves in a dilemma. On one hand, they are striving to retain key employees, while on the other, they must take into account their loss of income. As a result, sportsbook operators face the challenge of searching for a new “right balance” between internal and outsourced capabilities.

MTS works with some of the largest operators in the world but also regional ones that may not have the full in-house technological capabilities… do you see any differences in the way they experienced the pandemic?

The key factor was, and still is, finding the right balance between internal and external capabilities and associated costs. Our partners who have used MTS ITS – regardless of whether they are large international or regional operators, have been able to expand and use most of their internal resources at a time of growth. Simultaneously they have also benefited from MTS services and the capabilities it has to offer additional proprietary and emergency content.

How do you think the industry as a whole will change/shift?

One of the first consequences will be an even stronger push for consolidation in which bookmakers will bundle their capacities within a single offering. In addition, we will see the expansion of many product portfolios, especially within companies that were previously only active in retail sports betting and/or casino. This will go hand in hand with an accelerated shift in distribution channels towards greater concentration in online and mobile betting across the entire industry.

Sportsbook trading remains one of the core competencies of a bookmaker’s business. Therefore, it was perhaps natural that bookmakers with their own trading teams and systems were initially reluctant to change and embrace innovation during the first few weeks and months of the crisis.

However, throughout the summer, and as we enter the last quarter of the year, we have noticed a surge in interest in MTS ITS, particularly from more traditional bookmakers.

More sports betting and gaming brands than ever are now looking to new and alternative solutions that can transform their operations adding more flexibility and differentiation, making them more cost effective and robust for the future, ensuring the highest level of corporate resilience and continuity, but also facilitating growth by leveraging more effectively on their human and technological assets.

In the aftermath of the initial impact of the crisis bookmakers appreciate the role of a reliable partner that (i) constantly provides unique content, particularly during challenging times, and (ii) who can support them with innovative, future-proofed services and products that are commercially viable and financially affordable – regardless of the customer’s individual situation. In addition, the risk of large fixed cost structures will lead to more companies rethinking their existing structures and moving towards the integration of new, flexible approaches.

Do you think that the recent experiences will have an impact on the bookmaker’s future operational setup? What should a modern and future-proof operation look like in order to guarantee operational resilience and business continuity no matter what the circumstances are?

In the light of a more uncertain future, operators should review the areas where they can best invest their financial and human capital. There are domains where brands can benefit from integrating smart external services, such as high performance ad hoc platforms, AI, and hedging to name a few, for example. This may be an interesting opportunity for operators that have extensive market share within a single jurisdiction, but perhaps not a global scale. This is not meant to replace, but to integrate and facilitate the professional development of internal resources.

Looking ahead, what can we expect from Sportradar in the months ahead?

One of the areas we are focusing on is accelerating our processes and constantly improving our emphasis on our customers’ requirements. However, we also working non-stop to constantly build on and improve MTS ITS with new features and functionalities that strengthen every one of our customers’ operations. We are also working on a deeper integration with our valued partner platforms making MTS an inherent and seamless part of their services, as well as on new, innovative ways to manage a bookmaker’s exposure. Finally, we are focusing on developing innovative additional products, largely centered on an easy access to MTS AI, aimed at offering MTS benefits at a more granular level to a larger potential customer base.

Sportradar webinar
Related Videos
Pragmatic Play
Skywind
Greentube
EveryMatrix
Hot 50
Playtech
BigTimeGaming