When the Supreme Court overturned the Professional and Amateur Sports Protection Act (PASPA) five years ago, no one really thought one of the big winners of the move would be a technology company. After all, it was the sports leagues themselves challenging sports betting expansion and the thought was operators would have to compensate leagues directly with the dreaded “integrity fees”.
Five years in though, there is arguably no group more central to what is happening in US sports betting. In addition to providing a vital and vibrant revenue stream to sports leagues, companies like Sportradar are situated at the intersection of sports, betting and media, driving the industry forward through their innovative products and services and safeguarding sports via integrity monitoring.
Sportradar’s North America President & COO Andrew Bimson reflected on how the industry has grown since the repeal of PASPA. With the anniversary of the decision and the rapid pace of legislative expansion finally slowing down, Bimson sees this moment as a time when the industry is taking a breath to reconsider things, finally getting to prepare for the future versus reacting to the now.
PASPA anniversary is a perfect time for sports betting reflection
“Five years in you get a chance to reflect. You’ve got a few data points year over year to start to say, Okay, what is happening in the market? What are the drivers? What is consumer behavior looking like? How much retention? What’s our cost of carry or our acquisition cost in terms of new customers? I think [operators] are all starting to pay attention to that. I think that’s also bumping up against the quest for profitability and responsibility back to shareholders.”
It’s a far cry from how things started, when companies with sports betting experience elsewhere were scrambling to get into new markets.
“The market had to ship everything in, right? We shipped people from the UK, processes, product, platforms. There was no time to build anything and there was certainly no time to source industry talent. So there was this massive migration of all of those things into the East Coast in particular. Some of that still exists, but I found it really interesting over the last two and a half years how the market has grown up,” Bimson recalled.
One of the big lessons for sportsbooks early on was that purely importing a product from Europe was not going to work long-term. While it may have satisfied a need in the moment, US audiences want more.
“You’re getting a real consumer voice now saying we expect something that is a little more Americanized. We just need to feel like this is reflective of US sports, and this is not a criticism of any of the operators by any stretch of imagination,” he explained. “We were all doing what we could with what we had, and I think that enabled for the traction or the growth to happen at the rate it did. But I also feel that now there is this kind of reflection point of okay, what are the products? What are the features and benefits? What’s that user experience?”
The rise of the Same Game Parlay
If there was a product that defined the past five years of US sports betting, it would be Same Game Parlays. The rapid rise of SGPs took people by surprise, but Bimson sees it as the perfect encapsulation of what American sports bettors want.
“All the operators were surprised by Same Game Parlays and the way they picked that up. rankly, they just assumed that the European model would migrate here and the US would follow suit on. Having lived here for almost 25 years, I can tell you the US doesn’t follow anyone (laughs). They set their own trajectory. They set their own path. And heaven help you if you try and get in the way of it.”
He cited the fantasy sports roots of most US fans as one reason that bettors were drawn to SGPs, as it is, in many ways, a small fantasy roster with bet categories that consumers felt confident in predicting. Bimson also noted though that it is about maximizing entertainment value across a single game.
He noted that 85% of US bets are for $5 or less, while only 2% are over $100. In other words, there are a few high-value customers out there, but, by and large, customers here are looking for small sweats, often to augment sporting events they are watching on TV. That is great news for leagues, which Bimson said view sports betting as an opportunity to “re-engage with a new generation of fan.”
Engagement at the core of the next era of sports betting
“No one likes a blowout, and if you’ve got a blowout, what are you going to do to draw fans back? Is there a three-point play or individual performance that might be interesting? Is there a rebounding record? There are all sorts of ways that the leagues are trying to engage through their media partners to bring those fans back,” he said.
Those media partners extend beyond the core four sports, too. New leagues are seeing that sports betting is here to stay and looking at how to get involved. Not all of them are primed for success in the betting space, however.
“We get calls on a regular basis from leagues and sports properties about how they can start to engage with those younger audiences and whether betting fits inside of those particular environments, so I think you’ll always see that drumbeat of interest,” Bimson said. “It has to be a good product for TV, I believe, for it to grab the eyeballs and generate interest and therefore people want to get involved in it. I think there’s too much of a footprint with the core four for that to change much over the next, say, five years. After that, once we get to full maturity, we’ll see what might develop?”
As Bimson and Sportradar look ahead, engagement seems to be top of mind. Bimson noted that major players like Apple and Amazon are getting into the OTT sports game. They will inevitably want to innovate new and creative ways to keep fans tuned in, particularly given the high prices they are paying for broadcast rights. That could mean a new focus on in-game betting in the next five years.
“I think you’ll find that in play becomes more interesting for the US bettor as they mature. That is going to be driven by more data, player-related data, deeper data, the way we capture that information, especially from an automated standpoint, it becomes really interesting. More markets start to open around collection of that data and I think you’ll get more of an educated bettor that will tune into a game and feel that they’ve got an opportunity now to place a bet while they’re paying attention to that game.”
What challenges in-play betting holds is up for debate. What we’ve learned from the first five years is that other markets were not good indicators of what to expect from the fiercely independent US. As the industry moves into its next five years, it will be a time to trailblaze and set its own course, and what’s more American than that?