Greetings!
My last post was back in 2020, when nobody knew where Wuhan was and you might have guessed that PPE was something you picked up on a weekend trip to Benidorm with the lads.
So, I’ve decided that what the world needs right now, in amongst all the joy and overbrimming positivity around the place, is a few blog posts from me, just to level things out a bit.
I’ll mainly talk about product developments in Sports and Gaming, some of the current challenges as I see them, as well as where some opportunities might lie. It’s an interesting time right now, with gaming taxes biting hard, new products emerging and new licences and geos opening up – and, as the saying goes, ”neccesity is the mother of invention”… and we sure need something!
Voice controlled betting probably won’t get mentioned…
I’ll post something soon and then spam it everywhere (that hasn’t changed).
See you soon.
Crazy time to Cash Out
Over the past few years I have learned a little bit about the online gaming / casino space. When you work directly in Sportsbook all the time it’s very easy to forget that online Casino is in most cases equally, if not more important, than Sports betting. It’s 24/7/365 and the competition amongst all the big suppliers of content is as fierce as anything you’ll see in sports.
And yet there is one provider, Evolution Gaming, who really appear to be streaking ahead of the competition at the moment, particularly in the “game show” category.
Titles such as Lightning Roulette, Monopoly and the latest smash hit Crazy Time have all gone down a storm, appealing very much to a hybrid slots / live casino player. Some of the features are pretty incredible and it’s no surprise that players really love these games.
Evo have recently acquired slots powerhouse Netent and this combination has the scope to dominate the sector over the coming years. With the US seen as the big prize and with plenty of legroom in other parts of the world, it will be an interesting stock to watch, having already gone 3x over the past few years.
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Anyone who knows me well will know that Cash Out and I have a fractious relationship and as a general rule of thumb I stay away from the little green button. However, one time recently when I would have put my finger through my phone to get at it was on Ryanair’s site last week.
Owing to the pandemic, I found myself 1400e in the hole for flights I couldn’t possibly use without needing to quarantine on arrival. Of course, Ryanair are quite happy to allow the plane to depart with my empty seats (clearly they have never reviewed my bar tab) but on this occasion, and on many like it, the option to cash out my tickets would have been warmly welcomed as well as hugely goodwill generative.
On certain busy routes you could easily see how this feature would more than pay for itself. Keep a customer happy and returning to the site, whilst freeing up a seat to be sold at a higher price to a traveler who really needs it.
I actually think it’s surprising that no airline has considered this given how massive it’s been in betting companies. And in the case of Ryanair I am sure their algo would be more than, ahem, fair.
Not sure how partial Cash Out would work mind you…one for O’Leary to crack.
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The US looks to be where a lot of the future fun in the game will be playing out and in the case of recent stock market entrant Draftkings, there is no shortage of fun and games going on when you look at their share price.
Floating as they did just ahead of the pandemic, they’ve been latched onto by traders as the only “pure play” on US online gambling. The stock has gone on an incredible run over the past 4 months, from a low around $10 to well over $40 during lockdown. It’s since come off a bit but is still mid 30$.
No doubt the brand is a strong one and the early signs are that they will probably capture a significant share of the markets that open up, alongside Fanduel (who may well also IPO at some stage given these market moves) but they’ll pretty much need everything to go right from here to justify these values, and the wider macroeconomic picture would suggest that anyone who is long this stock at these levels will have to hold on tight…!
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Kenny Alexander has done an incredible job at GVC, taking the firm from a small AIM quoted company to a FTSE 100 player. Hats off for sure. His first love is apparently horse racing and he has been quietly building a nice string of horses, with several in training in Ireland and performing at a high level.
With Gigginstown House winding down over the next few years it will be interesting to watch if King Kenny unleashes a wider proportion of his considerable ammo into the great game. It would be a brave person who would bet that he wouldn’t make a success of it should he choose to. With GVC sponsoring plenty of top class races, it’s not a big price he gets presented with some silverware next season by his replacement at the top. Something to look forward to.
Thanks.
Penn is at 40?
Given the state of the world at the moment I figured things couldn’t get much worse following a blog, so here goes a short one.
The US stock market rides high in the face of unprecedented global economic destruction, brought about by the pandemic. In a parallel to Donald Trump’s handling of all this, it seems quite fitting.
One of the more interesting sideshows, from my perspective, has been the emergence of a new wave of stock market “day traders” (or, punters) who have become the big talking point on zero commission platforms like Robinhood.
Armed with nothing more than a mobile phone, a PPP cheque and access to Barstool Sports’ Dave Portnoy’s “Davey Day Trader Global” YouTube feed, these guys have been instrumental in driving some of the most bizarre stock rallies recently witnessed.
Portnoy is an interesting and engaging character for sure. Seemingly rich and fairly bored during lockdown, his basic approach is just to buy anything that crashed in the pandemic. He has an army of blind mice followers who appear happy to trust him on more or less anything he suggests.
He’s buying airlines and cruise liners of course, but also gambling stocks like Penn National (see video clip below!). Penn acquired Portnoy’s Barstool Sports social platform and will leverage its active user base of sports and betting millennials.
In Europe we don’t really see this kind of activation of a follower base into a specific type of gambling activity. The regulator would probably have kittens if this stuff started to emerge in sports betting but it does point to a type of content that could find a home here if the right balance was struck between influencers and their content.
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Corona has thrown some light on areas that I think are fairly interesting in the wider picture of our industry and esports is certainly one of those.
A few years ago I barely knew what it was and never really needed to. I had to plug into it a little since then and have been mildly surprised by its popularity and growth.
Howver, Corona has definitely ratcheted things up several levels and the most interesting part is that some of the content seems to be very popular even after normal sport has resumed – suggesting this isn’t just a flash and a crash.
FIFA and NBA2K are leading the way; towering over the more traditional “fighting” type games. This seems more rational to me and I can see how those could become very meaningful content streams for bookmakers in due course.
At least I can understand what’s happening now when I switch it on.
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There are a lot of eyes on GVC’s decision to take their UK brands off Oddschecker. I doubt you will find many marketing directors in the gaming space who would point to OC as being a rich source of brilliant customers but it has its place in that acquisition sphere, whilst also being a very high-profile brand positioning spot for our crowded UK market. Not being on the “grid” is still a big call, basically.
Ladbrokes came off the OC grid several years ago and quickly reversed that decision and whilst the digital landscape has moved on significantly since then, OC remains an important port of call for UK gamblers and is dominant in its space.
The apparent breakdown in commercial discussions is given as the reason but there may well also be a bit of muscle flexing going on here with OC now owned by Flutter Group (PaddyPower/Betfair and Skybet).
The CMA gave the Flutter / Stars tie up its blessings a few months ago but the Oddschecker element did look a bit of an issue to me then, and I still think it’s best off not owned by any of its grid members and certainly not by several of those brands.
It’s a small game of chicken in the grand scheme but nonetheless will be interesting to see who blinks first.
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I’ve enjoyed this flat season of racing more than any I can remember.
Yes, some of the big races were affected and maybe the results won’t stand up to the test of time but focusing only on the flow of the major races, I’ve found myself more engaged this season than most.
The Derby / Oaks / Eclipse weekend was as exciting as I can remember those races being and although I’m sure the normal pattern will largely return once we are through all this, I hope that some elements of this re-jig can be retained as I think it gives horse racing a chance of regaining some punter market share and some additional media coverage in against football and other sports.
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Thanks
If you build it…
Over the next few weeks, all sportsbook operators will be showing their hand with regard to their 2018 World Cup promotional plans, product development initiatives and marketing campaigns. Planning for an event of such magnitude started over a year ago in our case, with a product development initiative and a creative marketing construct we believe is capable of taking more than our fair share of market within an area we perceive to be the current battleground for punter affection.
That area is ‘bet requests’, and in our case our planning came to fruition when we recently announced our proprietary #PriceItUp Builder which we perceive to be the most powerful ‘bet builder’ on the market, to complement our already very popular #PriceItUp request market.
Bet request markets such as Sky Bet’s eponymous Request-A-Bet have undoubtedly been the most interesting and popular product innovation since cash-out. It is hard to remember another product innovation that has become so popular with punters and has also been jumped upon so quickly by the majority of operators.
One of the more amusing observations in the development of that product has been the initial need for firms to go ‘back to basics’ in terms of their offering. When we began our product journey at BetVictor 16 months ago, the process was entirely manual – a hat tip to the bookmaking brains that remain in our trading room today.
Requests were taken in, primarily via Twitter, and passed onto a sportsbook team to manually create the bet outcome within our trading platform. This was subsequently sent to our football trading team to #PriceItUp. Yet it soon became apparent that its sheer popularity and ‘scalability’ was too much for our trading team and we began to automate the process.
After several milestones, we arrived at the point of releasing our #PriceItUp Builder. The uptake has exceeded what we thought were challenging targets and expectations. There are a number of reasons, I believe, why these bet request products are proving so popular with customers.
From the customers’ perspective, it is engaging and fun to be able to create a bet that gives you an interest in up to 10 different areas of a match. It is an entirely new way of watching a game unfold and makes the traditional experience of simply backing a side to win look positively pedestrian. Prices offered are generally big and meet the individual needs of the ‘small stake, big return’ appetite shift that most operators are now seeing.
From an operator’s viewpoint, the product offers attractive margins by nature of the fact that a typical bet will consist of at least four selections. The bets are also related, so whilst a price may appear ‘huge’ to a customer, there will generally be enough margin that a bookmaker is happy to lay – though some liabilities get very scary very fast.
The product also opens up lots of future development opportunities in different sports and indeed different territories. Add in complementary features such as cash-out and a Bet Tracker, and you sense that IT are going to be busy with this one for some time yet.
On a wider point, the deconstruction of what was a typical bet blocker: ‘related outcomes’ and the reconstruction of that as a growth opportunity is a very interesting example of how technology is helping firms to develop products in areas that simply were not considered previously.
Over the coming weeks I expect you will see several firms unveil their own version of a bet builder. In our case, we’re betting big on our product coming out on top when the World Cup kicks off on 14 June.
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-This article appears in the EGaming Review (EGR) magazine May 2018 edition as a contributor article –
Lay. To. Lose..
For quite some time now the idea of a minimum online Lay to Lose (LTL) rule for U.K. bookmakers has been discussed. It was again discussed at a recent House Of Commons enquiry into bookmakers’ treatment of their online customers – the basic premise of which dealt with the issue of customers having their online betting accounts restricted, sometimes for seemingly little apparent reason, and the examination of policies in this regard.
Skybet were represented by their CEO Richard Flint, who revealed some interesting facts about their U.K. customers. Chief amongst these nuggets was one that suggested that only 1pc of their horse racing customers are subjected to restriction to a max liability of £100 on the Show on major races.
The Horse Racing Bettors Forum (HRBF) are campaigning for all bookmakers to be mandated to lay all customers to lose a minimum of £500 on Show Prices – something Flint seemed to suggest was too high but where perhaps there may be room to examine a middle ground.
But what could some the ramifications be of a move to allow all online bettors to have a minimum bet, laid to lose at least £500?
It would doubtless lead to much jubilation across a section of the betting base (both genuine players, arbers and moneysavingexperts alike) but it could also lead to a range of wider-reaching, perhaps less obvious effects.
As is currently a la mode, here’s a summary overview of 5 things that *could* happen, should all customers in the U.K. be allowed a min bet to take out £500.
– Early Prices could die – Any LTL policy would almost certainly be enforced on the Show only, meaning bookmakers would likely restrict or, worst case scenario, stop betting overnight or early. The chief benefit of going up early is to form confidence in your mid-morning and early afternoon prices for relatively little risk, but as all the sharp money would now move into the Show (where the LTL policy would exist), it’s likely the benefit of early prices would disappear over a short period of time. Most bookmakers lose, or barely wash their faces, on that business anyway.
– Show Prices could be dropped – If the Show Prices now carry a LTL of £500, trust in them is paramount. At the moment, the Show can be and is regularly manipulated for little or no money on course. If a bookmaker is now being forced to trade every customer to a min LTL of £500 it is not unreasonable to expect that they would want to have the ability to shape those prices as they see fit, without having to send money to the course etc. Firms trading their own prices is not new – Blue Square did it (before going kerplunk) but if the sands were to shift for all bookmakers it could make sense for all of them to introduce this practice. Competition on price is thereby introduced which should produce a more competitive and liquid set of prices in the “Show” period.
– Best Odds Guaranteed (BOG) could end – in the new world of firms trading their own Show prices and all the sharp money now coming in late, Best Odds Guaranteed would likely be a casualty. Most bookmakers would welcome that. Of course, 365 would probably decide to keep it in place in one form or another, forcing others to consider doing likewise but there would be a really strong case for it going.
– Trading jobs could go – The prospect of a professional or otherwise well organized gambler now having access (via 10 individual “clean” accounts) to get a bet on to lose £5k in the Show period would lead to a dramatic change in the trading room environment. Highly sophisticated risk management technology would be required and the need for more “old school” horse racing expertise would lessen. Horse racing is probably the only area of trading where a real “feel” for the sport is still needed – but over time this would probably be removed, as need for near perfectly managed pricing and risk control sees a new breed of management introduced. Any specialist betting technology firms could do worse than start thinking about software to assist in this area.
– Firms could close – The bigger firms could possibly manage the above (at significant cost) but smaller firms would simply be unable to wear the additional costs involved in entertaining this business and managing the risk associated with it. Some would undoubtedly close in my opinion, as this additional cost would be set against a backdrop of increasing costs in general, in terms of data and taxation/levies.
We could be on the cusp of some dramatic changes to horse racing betting – it feels like we are, but I’m less sure that we all know what might fall out the other side.
Racier, Returns.
“If you’ve got the chance to invest $10 with some certainty or $10 but with a racier return, I have to go for the former.”
So said Breon Corcoran, in one of his first interviews as CEO of Betfair. Back then, a focus on “regulated markets” was very much the mantra within many of the biggest firms, some of whom had been plotting their growth against revenue that was by no means certain to be there next week/month or year.
Whilst this policy worked very well in the case of Betfair 5 years ago, mainly because City analysts and large institutional investors enjoy nothing more than certainty of revenue, it comes with one practical side effect. It makes bottom line growth more challenging. And, when these decisions are taken against a backdrop of increasing taxation, regulation and costs of operation in regulated gaming markets, some may be compelled to rethink.
The news (or at least the kite) that’s being flown at the moment suggests that fixed-odds betting terminals in the UK retail market are going to be subject to a maximum spin of £2 when a decision on their future is announced. Whilst most normal people would have no issue with that – and would actually applaud it as a responsible gambling measure – it will leave a gaping hole in some retail bookmakers’ balance sheets and will also impact the amount of money that is collected in betting tax, which in turn will impact the money that horse racing receives in funding from the levy.
It could lead to some bookmakers having to examine their business strategies and some previously held views may come under question. “You’ll all have to start laying bets again and grow a pair..” seems to be a view that is widely held (on Twitter at least) and, being honest there is a good chance that bookmakers will need to examine their policies in many areas, including sports trading and bet acceptance, should the revenue from FOBTs dry up.
But there is also a chance that some bookmakers will now start looking very seriously at international expansion and perhaps towards territories where “racier returns” might be achieved. Shareholders or no shareholders, the desire for growth is a constant factor in all gaming businesses and with new technologies coming on stream in areas such as payments, m-commerce and information distribution, the potential of emerging markets such as Africa, South America and the Far East may be more appealing than ever to some.
Could Kenny-G be whistling a different tune?
The industry rumour mill seems to have settled on one piece of speculation being as good as fact…GVC are going to take out Ladbrokes Coral.
The basis for such a deal seems to be the feeling that GVC want a strong footprint in the U.K. – something they currently lack – and that an acquisition of a big group like LCL is the best option sitting on the table.
Having completed a merger – in name if not entirely in terms of technology and culture – Ladbrokes Coral is anxiously awaiting more news on the future of FOBTs, and would likely be receptive to an approach from GVC; with their Bwin and Sportingbet brands particularly strong in mainland Europe, where LCL are not particularly strong.
But taking on a retail estate of some 3,500 UK betting shops would be a very big change for GVC in terms of their operations and know-how, and with the future of retail betting looking certain to end up with more and more regulation of fixed-odds betting machines, it is somewhat difficult to see why this deal holds quite as much appeal for GVC as many seem to believe it does.
GVC want international diversity and scale, they want a strong presence in the U.K, in Australia and probably the USA, and in taking out LCL they get a piece of most of those things in one form or another…but with the big retail headache thrown in.
There is another path to achieve that scale and U.K. footprint, and one which could, potentially, be more interesting.
PaddyPower Betfair have a serious U.K. market position and, whilst deep in the throes of plugging into each other, they have managed to maintain some growth and positive momentum in most areas; e-gaming aside. They have the number 1 brand in Australia, with their Sportsbet business recently referred to as the “jewel in the crown” of the Group, and they have quietly built a nice US business via TVG and their fledgling DFS operation, Draft.
They have a relatively small retail estate in the U.K. and Ireland and would find the inevitable further regulation and curbing of FOBT machines largely immaterial to their future performance and growth prospects.
Their stock is somewhat in the doldrums recently, and trades at a decent discount to the price they floated at; and they’ve just lost their mercurial CEO, Breon Corcoran, who will be replaced by Peter Jackson, ex World Pay. Despite it being 18 months since the merger concluded , they still appear to be a business grappling with the changes the brands now face.
Kenny Alexander loves making a deal and, according to those who would know, he’s particularly good at making complex deals work. A deal to take out PP/BF would require many, many pieces to fall into place, not least multi-billion pound finance but given the success GVC have made of the BwinParty acquisition, it’s likely that this would not prove an insurmountable obstacle. If it was to happen, GVC immediately become the world’s biggest betting business, with a geographic diversity unparalleled and with 5 of the world’s strongest digital brands in their armoury. Also, as “deals” go, this one would excite and raise the pulse, whereas a deal to take over LCL could raise more eyebrows.
Don’t be surprised if the newly anointed master deal maker is humming a different tune to the masses on this one.
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UPDATE
Interesting comment reported today 08/11 by Kenny Alexander.
GVC Chief Executive Kenny Alexander said: “Turkey was an issue that I feel we could have resolved (with Ladbrokes). If we wanted to participate in consolidation, be it Ladbrokes or anybody else, or be a target ourselves, then this (the Turkey sale) is clearing the path for that.”
The official said that they’re not expecting a deal with a competitor until the UK finished the consultation process on FOBTs stakes. “There are a number of other potential M&A targets that we could look to explore and don’t be surprised if it’s not Ladbrokes,” he added.
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5 total guesses why Breon picked up his ball and walked.
My 5 total and utter guesses why Breon Corcoran left Paddy Power Betfair
– Tech is HARD. Though BC strikes me as being more slanted toward the commercial and customer side of the business than the tech side, he clearly has his hands all over what’s needed to plug these behemoths into each other. That work started in May 2016 and as of June 2017 approx 70pc of the firms development resources are working on this job. This is hard and heavy lifting and it sounds like several bumps have been hit along the way, as is normal. It also sounds like the initial estimates of the difficultly and length of the project may have underestimated the complexity of the task at hand. It’s a slog at the best of times and, in the middle of it, it can probably seem like a black hole task, especially when you see your rivals spinning out new products and features, whilst all your discussions seem to be about platform integrations. Though the firm is still saying that the job is on course to be delivered by the end of 2017 the burden may already have claimed its first victim.
– Fatigue – 16 years at the top end of these companies must take a toll. Relentless pressure on costs, staff upheaval, trading rollercoasters, missed numbers and the like. Disastrous Cheltenham, World Cup horror show, lack of a World Cup horror show….the list goes on. But when you’ve done that year-in-year-out and you’ve plugged two of the bigguns into each other and created a very biggun; what’s the next move? Typically it’s a few years of bedding in, loads of internal upheaval, unhappy staff who now have a whole new set of colleagues out to get them, and morale on the floor. All of which makes the job of CEO tiring and stressful you’d imagine. When you’re seriously loaded, maybe you just can’t be arsed.
– Boredom – The exciting part of that journey was turning around a chronically failing Betfair and riding back into town to show the old team what for. After that, it all starts to look a little dull, with words like “costs of technology” “synergies” and “scale” uttered way more often than “football” “racing” and “bets”. Must be a fair chance that BC, like all good performers, knew it was time to get off the stage.
– Skybet – it may not be totally evident in their numbers just now, but if PPBF are not shit scared at the giant leaps Skybet are making right now, they should be. Whilst the former are totally immersed in an integration job, the latter continue to sprinkle magic dust all around. BC was often highly complementary of them in analysts calls and presentations, and seemed very impressed with what they were doing. Could it be that a takeover was proposed but an anxious Board at PPBF blocked the deal-making CEO from pulling off what would have been his biggest play of all? Probably not, but it’s an interesting yarn. What seems hard to believe is that 8 month search for his successor finally identified “that fella sat over there” as the next Kingpin. Whilst the stage management of the past few weeks has been top drawer, this looks sudden and unexpected, which begs the question “why?”
– Eureka – BC is a big brain. “Cerebral” is a word often used when people describe him. He has hinted at leaving the industry and perhaps working in other geographic territories. He’s exposed to lots of ideas and technology, and knows his way around a deal. Maybe he’s seen something somewhere that he thinks is the next big thing. Maybe something like Blockchain or AI or these emerging tech areas most of us know little about are now the things that interest him more than money back specials at Doncaster. He’s not retiring by the sounds of it, and it will be fascinating to see where he turns up next. Let’s hope it’s not insurance or banking, that would be a blow.
Regardless of what the reasons were for his departure, the industry is poorer for it and the stakes have never been higher for the man who’ll sit in his seat. Good luck to all.
(All the above pure speculation based on nothing more than an active imagination and boredom whilst waiting for the Sunday Forum on ATR)
Ask and you shall receive.
A while ago I wrote a blog entitled “the age of supercharged bets” but within it you will find no mention of the betting market which is quickly making all bookmakers sit up and take a long hard look at what they are offering to their customers.
“Bet-Request” is the type of market I’m referring to and it’s growth in popularity over the past few months has been nothing short of staggering.
RequestABet from Skybet has popularized the market – thanks to some slick marketing and product execution – but now many of the big firms have responded and we are in the early stages of a proper battleground for supremacy in this area.
Paddy Power and William Hill have launched versions and BetVictor have also got in on the act. When the remaining tier 1 firms start to flex their muscles in this area – as they will – you can expect an all out war to commence, probably around the start of the new football season. At the same time, third party development firms are focusing on this area which will assist many of the smaller firms in particular to get involved.
But why is bet request proving so popular? Aren’t there enough markets offered on every aspect of a football match or sports event already?
True, bookmakers have long been involved in a race to see who can offer the most markets on an event. For the longest time we were bombarded with ads saying “over 200 markets to choose from” from various operators. You could rewrite those headlines as “our algorithm is the best on the market right now” if you wanted to.
Simply deriving more and more markets from the supremacy and goal line clearly isn’t the answer for either punters or bookmakers but I’ve yet to see a bookmaker do a Jerry Maguire on it and start offering fewer markets “less money, more personal attention”.
But the truth is that nobody really wants to have a bet on over 4.5 match corners at 1/6 and nobody ever really did. But the model could churn it out on every game going and that ticked a box on the “can we scale” checklist.
Ultimately though, derived markets serve as wallpaper but they don’t set the pulse racing at all and their time is now limited. The next scaling we will see will be a scaling down of dross markets that nobody bets on and which take up valuable real estate on a mobile phone. Customers are growing tired of what has become a bland, model-driven betting experience. The ability to frame their own unique bet in a single match that offers an interest in several different markets in a match is now highly attractive as a result.
These bet requests are typically sent to the betting firms on Twitter and might look like this:
Man United to beat Man City, Rooney To Score, 8 or more corners, a red card to be shown, a penalty to be missed. #betrequest
What then happens is that social media or content manager will send that request to a trader, the market is created and priced (100/1 for the above, any takers..) and the customer is informed. Usually, the odds are quite large but will offer the bookmaker a healthy slice of margin. The customer will generally not really know what the 100pc true odds should be and so are more than happy to take a price that looks attractive for their fiver.
Hundreds of requests are taken and priced up and customers are able to bet on any request they like – not just their own ones. Levels of interest are very high and would surprise you when set against the very biggest pre-match markets out there like 1×2 and BTTS.
But if the process of market creation sounds manually intensive that’s because it is, and so, firms are all looking at how they can streamline the process so as to allow for scale without turning this fledgling product into a yet another algorithm.
That will be the big challenge I suspect. Clearly, the betting public like the fact that this is chance to connect with a trader, get a unique bet considered and priced and have a unique experience. The customer demand is there already and will only grow. The product can be applied to all sports in due course as well as in-play betting and there are a lot of features that could be added in to supercharge the offering.
Skybet have secured a trademark on their product which suggest they expect “request” to be something you will hear more and more of over the coming months and years.
It’s hard not to make them right…
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Sideways..
A few year ago I was on the periphery of a product development initiative at BetVictor around a market we called Spincast. It allowed a customer to have a bet on the Team to Win – Anytime Goalscorer – Over/Under Match Goals – and you could choose any combination within these markets. There were hundreds of Spincast bets you could have in a game and all were usually big prices.
We developed a slot machine-style interface for the user, which is probably one of he areas we went a little wrong, along with the name of the market itself; but the product was the very first version of “single match accumulators” where a customer could have a treble on three related outcomes. There was no “request” element but then again there was no Twitter then.
We were probably a year or two ahead of ourselves without fully knowing it and whilst there was some interest from customers we didn’t really embrace the opportunity and we definitely missed out as a result.
It feels like one that got away and emphasises the importance of having some space in an organization for product development and innovation (a betting lab if you like) without the usual pressures of revenue delivery.
Honey, I shrunk the market.
Over the past few years a wholesale war has broken out between bookmaking firms in the area of promotions and special offer concessions.
Going back ten years or so, Paddy Power cleverly leveraged this area, and for a long time they used things like Money Back Specials as a serious weapon in their new customer acquisition and retention efforts. They seemed to “own” the space entirely and rival firms were very slow to adopt the practice, possibly because they were terrified what it would do to their margins. But as PP had already discovered, these “Money Backs” were brilliant on a few levels. They drove a lot of PR coverage and general punter chatter. It appealed mainly to a recreational user who was likely to reinvest any refunds rather than withdraw them, and it drove a load of customer interaction and betting.
Five years back, others started to get in on the act and suddenly PP didn’t quite have it all to themselves. Competition broke out en masse and a race (to the bottom?) started to emerge. Sensing that the tide had turned, PP quietly dropped their “we refund in cash” pledge, and started paying back refunds in free bets. Everyone else was doing this anyway – so why bother paying back real money. Free bets all round – and you can have one pretty much every day of the week now if you open enough accounts and browse the promotions sections.
The promotions frenzy usually reaches fever pitch at Cheltenham in March. Firms literally give away the prospect of making money on the week in order to ensure that their sign-up offer outdoes the competition. Money back first and last race, money back if you’re second to the fav, Walsh/Mullins refunds, free bet in every race…we are all in there and are all trying to ensure that our brand is the one being discussed in your social chats, on WhatsApp, on Twitter via a gazillion “affiliates” and the digital sphere in general. That’s fair enough – healthy competition amongst rival firms and a surefire way to ensure that the customer gets the best deals.
But in the wider scheme of things there is a danger that these unsustainable promotions and concessions will ultimately contribute to a far smaller overall market in terms of the number of bookmakers competing against each other. Because as these offers become more and more generous, more and more expected and more and more “contrary to bookmaking principles” they will only be able to be offered by the biggest and most profitable companies.
Earlier this month, PPBetfair CEO Breon Corcoran said the following in their Q1 update to analysts, which I think gives a great insight into the war that has emerged;
“The competitive nature of the industry is extreme. We thought Paddy Power would be unique with eight places (on the US Masters), perhaps along with Sky Bet. But bet365 and Hills competed in the same way, which they haven’t in the past. This makes us cautious. There’s some state of flux in the market.”
“We feel we’re doing the basics right, but we do see very aggressive pricing and behaviour from some competitors and we think that’s possibly distorting the market and customer behaviour. I think the smaller guys will continue to struggle, they’ll either wither on the vine or be forced to think about consolidation,”
“Scale is the critical word. As online consumption matures and as regulatory and compliance cost go up, I think being large is ever more advantageous. There are very few markets in Europe right now where you’d prefer to be a smaller operator and I think that has long-term consequences for industry structure,”
With a relatively quiet summer ahead, the big PLCs will be worried that customer activity will go through the floor. They will all be reporting Q3 against comparable periods last year where a very bookmaker friendly Euro 2016 was being toasted by all. I would be expecting we will see some very aggressive promotional activity this summer – with racing leading the way and other headline sports events all getting the full treatment. And I expect that the start of the football season in August could entail fireworks on a level not seen before.
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