Mark Nerenberg, Chief Operations Officer at Simplebet, discusses expectations for the micro betting sector, and what we can look out for in one of the fastest-growing areas of sports betting.
SBC Americas: 2022 was a year of significant growth in the US, with micro betting becoming more mainstream. How do you expect this sector to further expand in 2023?
MN: In 2022, DraftKings offered a variety of micro timeframe markets across 5 major sport leagues: MLB, NFL, NBA, College Football and College Basketball. With unprecedented availability, markets for outcomes of plays and drives, and pitches and at-bats accounted for an estimated 25% of in-play revenue, which is roughly 10x more than micro betting offerings at other books. While consistently keeping micro markets available throughout every game is technically challenging, it has proven to be the difference-maker for adoption of micro betting.
In 2023, more operators will offer high-availability micro markets. Operators that view their live pricing capabilities as a competitive advantage, like Pointsbet for example, will release new and improved offerings. That said, many operators have loosened their bias towards doing everything in-house. With the markets favoring revenue and profitability there is greater urgency for operators to achieve product parity in areas they are falling behind while simultaneously finding opportunities to differentiate.
Understanding the execution risk of taking on too much at once, more operators will look to leverage B2B suppliers, particularly suppliers that specialize in certain categories of gaming, to accelerate their product efforts in the near-term.
SBC Americas: Beyond more operators offering these micro markets, what else will drive growth of micro betting in 2023?
MN: U.S. sports consist of constant, impactful micro events with many possible outcomes. The nuances that go into predicting outcomes such as whether this batter will strike out now that he is down in the count, or whether this team will get a first down on 3rd and long are already ingrained in the way casual sports fans think and talk about sports. Given the reach of major U.S. sports leagues and consumption patterns trending more towards digital, on-demand, short-form entertainment, micro betting will eventually be the predominant form of in-play betting.
That said, while the incremental revenue and engagement from micro betting was substantial in 2022, in reality it was almost a trial run without any real marketing behind it. There are so many creative ways to expose micro predictions to the masses, but marketing efficiently requires more planning and execution than some might think. Now having proof that micro betting drives incremental activity at higher margins, some operators will incorporate micro markets into their marketing efforts as they look to attract new customers and grow efficiently in 2023.
More micro betting content across media platforms and betting affiliates will also drive growth in 2023 and beyond. Micro markets provide endless possibilities to take advantage of team or player tendencies and game situations. For example, after a Matthew Stafford interception the Rams tend to run the ball on their next drive. When Aaron Judge was chasing the homerun record teams were pitching around him and there was edge in betting on Walks. With former players and coaches sharing insights from their experiences, and affiliates featuring more data-driven content, fans will be exposed to micro betting authentically on platforms they already use to consume sports.
SBC Americas: It seems there has been a recent shift in the industry to focus more on product. Where should we expect to see product enhancements in 2023?
MN: Given the high margins and popularity of single game parlays (SGPs), in-play SGPs will be a natural evolution. Applying the SGP experience to micro timeframes like drives and half innings could be the next big thing. For example, while the Minnesota Vikings are on defense, a user can craft a bet for their next drive… “Kirk Cousins will complete his first pass which will be caught by Justin Jefferson. Cousins will throw for more than 40 yards and Dalvin Cook will score a rushing touchdown.” We will see early versions of micro SGPs in 2023 with more widespread adoption expected in 2024 and beyond.
With so many markets available, discoverability will be a high priority for operators in 2023. Discoverability is especially important with micro timeframes where scrolling through long lists of markets is not feasible. In 2022, the majority of micro betting volume came from 2 or 3 markets most prominently featured in the app while there were many other potentially engaging markets that were harder to find. In 2023, we might see the application of personalization with operators looking to surface the right bet to the right user at the right moment.
The largest opportunity for in-play and micro betting growth will be the ability to follow live games at low latency. While betting markets are powered by near real-time data, watching through broadcast or streaming can be 10-30 seconds delayed. Even the game tracking widgets in most sportsbook apps, which were originally built for media purposes, are 5-10 seconds delayed and thus counterproductive for micro betting. In 2023 we will see higher quality, low latency game tracking visualizations built specifically for punters to have up-to-date information when placing live bets.
That said, the biggest thing to keep an eye on is the much-anticipated evolution of a “watch-and-bet” experience with low latency video. With Caesar’s recently partnering with Genius Sports to stream Sunday Night Football, the evolution has begun. While it will likely be a few years before the majority of games are easily available to stream at low latency, in 2023 we will learn the potential of micro betting with a true watch-and-bet experience.
