The sudden lack of sports around the globe has not been kind to US sportsbook operators.
The likes of PointsBet and William Hill have seen more than 70% of their value wiped away over the past month. Even the best-performing firms have lost nearly a quarter of their value.
It means the race is now on for alternative forms of content. Legal Sports Report caught up with Rahul Sood, CEO of esports betting operator Unikrn, to find out what the sector could offer.
LSR: Is it safe to assume your phone has been ringing off the hook over the last week?
Sood: Sportsbooks are building content around niche sports, like darts, at the minute, so yes, there is certainly new demand for esports. The world is changing.
While sports are only on hold temporarily, the long-term effect on entertainment consumption will be much more profound. Already, we’re seeing performers doing concerts from their homes and Universal (Pictures) putting out movies directly to stream.
And so we see an opportunity from those people who are sitting at home playing video games. We want to offer them a chance to bet on themselves. So, you would connect (your) favorite game to the platform, and we could collect data as you play and work out your skill level. And then we can offer you bets like, “Will you win your next three games in a row at 6-1?”
LSR: Is it categorized as a game of skill rather than betting?
Sood: Yep, that’s live in 41 states.
And that’s the biggest opportunity because then we can cross-sell those customers into our other products, depending on legislation. That includes a virtual game based on an RNG (random number generator), which is categorized as casino or traditional esports betting.
LSR: Has demand spiked since sports stopped?
Sood: It’s been pretty nuts. We don’t share actual numbers, but we’re seeing something like double the number of sign-ups than normal.
LSR: Have US operators been on the phone?
Sood: We’ve had a lot of calls from major operators who want to do things with us, but I don’t know exactly what that looks like yet.
We have a B2B, white-label offering, but beyond that, some people look at our tech and say, “Why aren’t we buying you?” Everything is on the table.
A lot of these executives are so focused on the day-to-day that they hadn’t looked around the space at other opportunities. But things are moving fast now.
LSR: New Jersey has only allowed betting on one esports event to date. Are legislators open to allowing this more widely?
Sood: Regulators are willing to move quickly right now. I’ve been speaking to a lot of them, and I know for sure they want us to go live as soon as possible.
LSR: We’ve heard from other operators that the lack of one governing body in charge of integrity has been a sticking point in expanding this. How would you address those concerns?
Sood: There’s no better way to spot cheating than through betting patterns. Our system is very smart at using algorithms and AI (artificial intelligence) to detect anything like that.
LSR: What about people trying to game the system when betting on themselves? (They) deliberately playing poorly to get a worse rating and better odds, for instance.
Sood: You can try and game the system, and people have tried, but you can’t do it. Again, the system is very smart; we do full KYC (know your customer) (checks), so we know who you are, and it’s simply not possible.
LSR: Traditionally, esports bettors are a very separate customer cohort to traditional sports bettors. Are you confident you can attract and then keep these customers in the long term?
Sood: Those sports fans are currently sitting at home playing games like Madden or NBA 2K. We think we can get them on our platform for a $10 wager against their friends. And while they’re here, they might look around at our other products. It’s a bit like how an operator might acquire into sportsbook and cross-sell into casino.