The real Euro vs. the virtual one
The event will be the focus of a vast amount of betting action worldwide, and the outcome of the games will have a material impact on 2016 revenues for the major operators.
The competition consists of a qualifying round involving 53 teams, a series of playoffs, and then the finals which will include 24 teams.
The qualifiers and playoffs have all been completed, and the final 24 teams will play down to a winner starting June 10 and ending July 10.
BetRadar’s virtual version of the event will be played out with the same starting teams, but the eventual winner could be very different.
The application provides various betting options, and users can watch matches play out as video streamed games in 70 minute accelerated sessions. The quality of the video is superb; on a casual glance it looks a lot like the real broadcasts.
Virtual Euro 2016’s enthusiastic reception
Over 25 different operators, including SportingBet are already integrating the product alongside their existing sports betting products.
Liga Stavok was the first Russian sports betting operator to get a license under Russia’s new online gaming laws.
Maxim Afanasyev, Head of Trading at Liga Stavok, said:
“We have used BetRadar’s virtual football product since 2013 and found that the combination of best in class 3D animation together with the attention to detail in terms of data, histories and markets make their product the most compelling and impactful. When we heard that BetRadar were ploughing all that same technology and realism into a format that leverages the buzz we anticipate this summer, it really was a no-brainer for us and we cannot wait to see how our customers react to this new installment”.
Match outcomes follow the same probability distribution as real games
BetRadar uses its database of soccer statistics to create game outcomes which match the likely outcomes of the real games, but with a random element to reflect the real-life possibility that the best teams don’t always win.
The probability distribution of virtual match outcomes is calculated to be as close as possible to the probability distribution of the real matches.
Alex Inglot of SportRadar explained the process to LSR:
“We do a lot of analysis of real leagues – for example Bundesliga and EPL for virtual football league, NBA data for virtual basketball which gives us a distribution curve for virtual team performance that has it’s basis in the real world.
For example, Team A will beat Team B 3 out of 4 times. Same for score distribution, e.g. 20% chance of 2-0, 5% for 4-1, etc.. Put all these together and we have a statistical analysis for any match up of teams. All we then need to do then is draw a random number to select where on the curve the result will come from and play out the video.”
The aim is to provide the same betting experience that fans will get from betting on the live matches. Inglot told LSR that the “chances are Germany or France will lift the trophy however, even Iceland can make it all the way if results and random numbers fall the right way.”
The addition of a virtual Euro 2016 betting product gives operators a second route to the customer, enhancing their overall experience of the competition. A second set of matches, even though virtual, provide an extra way to generate revenues, leveraging customers’ interest in the live competition.
The money involved in Euro 2016 is substantial
European equity strategists at French investment bank Societe Generale have put together their recommendations for the companies that are likely to make the most from the competition.
In the sports betting arena, they recommend investing in the newly merged Paddy Power Betfair Group. As an alternative, they list SportingBet’s parent GVC.
The competition will be a nail-biting affair not just for the teams and fans, but also for the operators.
Ladbrokes CEO Jim Mullen told Bloomberg News that every time England wins a match, the company could lose around £1 million ($1.47 million).
“For the first half of the tournament we could be significantly in the red,” Mullen said. “Then in the second half, when it comes down to the big eight teams, it gets tougher, and that’s when I try to get my money back. But it’s extremely nerve-racking.”
Virtual sports can help mitigate earnings volatility
Mullen stated that England winning the Euro 2016 tournament would pose “the biggest single risk” to Ladbrokes’ financial year results.
The volatility in earnings that huge sporting events such as the Euro 2016 add to bookmakers’ financial reports is a fact of life that they are extremely experienced in dealing with — in the long run all should come good.
However, one additional benefit that offering virtual versions of major sporting competitions has the potential to provide, is a mitigation of some of the more extreme event risks faced by operators.
Leicester City’s unexpected title in the English Premier League hit bookmaker earnings very hard. In a virtual version of the league, the chances of the outcome being the same are low, although there is — and should be — a positive correlation.
Bets laid on the virtual version should therefore have a mitigating impact when the live competition produces unexpected results, and vice-versa.