- Sports Betting
- NJ Sports Betting
- PA Sports Betting
- Colorado Sports Betting
- US Betting
- LSR Podcast
Let’s take a walk through the report — their takes are indented, mine are not:
Last week, we spent a few days with some of the best sports betting professionals in Las Vegas, ranging from regulators to gaming hall of fame bookmakers and risk managers.
With all due respect, the Las Vegas / Nevada sports betting market is a very small one with antiquated systems and an offering that is far from innovative or competitive. Its profile and the learnings you can take from it will tell you more about the history of sports betting in the US than the future. Compare NV’s sports betting revenues of $250 million in 2017 to Bet365, one UK-based bookmaker who totaled nearly $3 billion in revenues in the same year!
While public companies are racing to pick their corporate partners and get temporary books up and running, we wanted to take a step back and get a ground floor view of how all this sports betting stuff will come together.
Again, not so much a ground-floor view as a window on the past. If Union Gaming had gone to the Caribbean for a view on products, services and market from the current market leaders of the black-market US online sports betting world, they would have probably learned a lot more relevant information about what the future holds.
Hard to distinguish the best technology providers. We are often asked which company has the best sports betting technology and we now know the answer really depends on who you ask. We surveyed a number of bookmakers across Nevada and found that no one technology or system was far superior to its peers. In fact, most bookmakers claimed they would prefer to build their own system from the ground up, but that wouldn’t be practical (given the thin margins on the book). We did hear SBTech and Kambi often being cited as really, really good, and that doesn’t surprise us as both companies have announced a number of partnerships thus far.
One of the flaws of the Nevada sports betting model is the cost of compliance and the small size of the market means no new or cutting-edge technologies have given the state a second glance over the last decade. Most of the Nevada books rely on a 40-year-old retail booking system, which means that any attempt to upgrade the front end is held back by the limitations of very old software.
Given that, few of the Nevada experts have had the chance to see and use more modern systems in action, and have a feel for what will work best in the brave new world. To be honest, it is a bit like asking your grandma which smartphone has the best features for social media updates and blog posting.
While some of the bookmaking technologies in the UK and Europe are quite sophisticated, they are geared toward soccer. The reality is that US sports (Hockey, Baseball, Football, Basketball) are significantly more complex and faster paced, which creates challenges for adapting the overseas technologies, particularly as it relates to the more profitable in-play betting.
Don’t know where to start with this. An NFL game lasts three hours and 12 minutes with only 11 minutes of real action. As for baseball, do I really need to convince anyone that it is not fast-paced?
Basketball is fast-paced but last time I checked, it is also the No. 2 betting market in Asia and many European countries too. Ice hockey? Well, I believe they play that in Europe last time I checked.
As for US sports betting being more complex, perhaps it makes Vegas bookies feel better about themselves if they believe they are the math professionals versus their European checkers-playing colleagues?
In fact, game play in the US is so quick, in-play betting really only works on mobile as its the only way a bookmaker can hang odds on an in-game event quick enough and gather enough liquidity to mitigate risk and turn a profit. As a result, we are left with a bookmaking process in the US that is likely to require a significant amount of human touch for the foreseeable future.
Oy vey … come on guys! Of course in-play betting works best on online but that is not a weakness! That is the strength of the online channel: that it opens up products you can’t get over retail.
Bookies don’t “hang odds” on in-play markets by scratching around with a pencil on a pad and then typing something in. Most in-play markets are set by algorithms that are fed by the opening line, the score, and the time remaining in a game. A very junior bookie just nudges the in-play line every now and then based on penalties awarded, momentum on the pitch, injuries and the book’s liabilities.
The old Vegas system of limited markets on a game, all manually administered, is not the way it is done today elsewhere in the world. The rollout of New Jersey sports betting will rapidly evolve to a very broad and creative array of in-play products, which will primarily be automated.
The bookmaking expertise is a scarce resource. Sports betting has until now been limited only to Nevada, which means the pool of experienced book and oddsmakers (for US sports) is very limited. Having a good bookmaker is important given the thin margins on sports betting. A few mis-priced odds and the book could be losing money in no time.
This creates a window of opportunity for companies that can provide a scalable, full-service solution like William Hill US and USBookmaking, which is the Nevada-based bookmaking company headed up by Gaming Hall of Fame bookmaker Vic Salerno. We expect major market access partners like the large public casino companies will look for a joint-venture partner that would allow the casino to retain ownership of the players, but for the smaller portfolios and single-asset casinos, companies like William Hill US and USBookmaking are efficient, reliable, and quick solutions.
There are more than enough bookmakers and in-play analysts to satisfy the US market. The trouble is that most of them are not American (and with President Trump‘s immigration strategy, getting them visas is very tricky indeed.)
Those who are American are either rooted in the old ways of doing things and just not knowledgeable about newer systems and models, or they are based in the Caribbean and very unlikely to be licensable in the US market.
And as if getting your hands on one of the few “farting unicorns” who are open-minded knowledgeable American bookies aware of modern technologies wasn’t hard enough, you also have the problem of the Wire Act. That (in theory) requires the bookmaking decisions to be made in the state where the service is licensed and the player is located.
So here, I do agree there will be trouble. Expect lots of promising young US trainees to be shipped off to the UK, Malta and Gibraltar for Bookie Training 101 very soon!