Is Amaya’s Latest ‘Spinnovation’ Really Good For Its Sports Betting Platform?

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Earlier this month, Amaya announced that it would be adding a new product to its BetStars sports betting platform, dubbed Spin-and-Bet.

The name is a reference to the heavily-marketed Spin-and-Go poker format which was launched on PokerStars late in 2014, and the two work along similar lines, increasing players’ variance by adding a random factor to the payout calculations.

Spin-and-Bet explained

For those haven’t experienced them, the way Spin-and-Go’s work is similar to a three-player, hyper-turbo Sit-and-Go tournament, except that the prize pool is a randomly-determined amount between 2x and 10,000x the buy-in.

The probabilities for various payouts are of course calibrated such that the long-term average payout works out to the expected 3x buy-in, minus rake. In most cases, the winner of the tournament takes the entire prize pool, although for the very highest payouts, the runners-up both receive a consolation prize equal to 10% of the jackpot.

Spin-and-Bet works on a similar principle, except that the randomization of the payouts is based on a multiplier applied to the regular odds for the bet in question. Here is how it works:

All of that makes it a little bit complicated to figure out exactly what he potential upside is, but let’s look at a specific example.

A bet of $10 at +200 (American odds) would ordinarily pay out $30 on winning: $20 profit plus the $10 stake back. If the Spin-and-Bet option is selected, then $1 is deducted to pay for the chance at a bonus, and the payout will be as if the player had only bet $9, i.e. $27. This minimum payout is what the player will receive 80% of the time, provided the bet wins.

On the other hand, if the player spins a 5x multiplier, then the payout is calculated if they’d wagered $9 at +1000, so $99 in total – the initial $9 stake, plus $9 x 2 (odds) x 5 (multiplier). Of course, the player still has to win the bet to benefit from the multiplier, just as a Spin-and-Go player must go on to win the tournament to claim the prize.

Diversifying the ‘Stars’ brand

Ever since PokerStars was acquired by Amaya in a reverse takeover in June 2014, attempts have been made to expand the brand into new markets. Casino games and sports betting were added to the client before the year was out, and those offerings have been expanded steadily ever since.

One recent addition, for instance, has been the ability for players to bet on the outcome of certain PokerStars poker events, both live and online, including last fall’s $51,000 World Championship of Online Poker (WCOOP) Super High Roller, and the PokerStars Caribbean Adventure (PCA) Super High Roller earlier this month.

For legal reasons, however, the expansion has been carried out unevenly. Laws differ from country to country on what forms of gambling are allowed — or, indeed, what constitutes gambling — and Amaya is being careful about staying on the right side of the law, especially in light of its ongoing attempts to bring PokerStars back to the United States.

For example, players in the United Kingdom now have access to all poker, casino and sportsbook offerings, while Canadians can only play poker and cannot even access the informational websites for the other products.

Although the casino and sportsbook offerings have been, and will continue to be available through the PokerStars client (where allowed), the latest step in the brand’s evolution under Amaya has been to start marketing them separately. Amaya took over the daily fantasy sports (DFS) site Victiv last August and rebranded it as StarsDraft, while as of December, the sportsbook has been given its own BetStars branding.

The rise of the Spin-and-Go

The diversification strategy may stem in part from Amaya’s own history, before the takeover, as a business-to-business company providing software for a variety of gambling applications, such as video slots.

Clearly, it makes sense to make use of the existing expertise of the new parent company and its personnel. At the same time, the poker industry is struggling, so that too may be a factor in the decision not to keep all of the eggs in one basket. One clue that this is the case is that even within the poker offerings, there’s been a change in emphasis.

At the height of the poker boom, the game was being marketed as a skillful competition of brains and guts, and the aspirational image put forth most players in the poker industry was of the dedicated professional, for whom poker is a job rather than a diversion.

As the field has grown tougher and more and more would-be pros find themselves disappointed, that idea has become a harder sell. Indeed, we’ve seen the number of sponsored pros declining, both at PokerStars and other sites. PokerStars’ strategy has been to replace those with non-poker celebrities for wider appeal, starting with tennis star Rafael Nadal and culminating in, most recently, soccer superstar Cristiano Ronaldo.

Thus, even as Amaya has been adding additional forms of gambling to its offerings, so too has it endeavored to downplay the competitive aspect of poker and enhance its appeal as pure, recreational gambling.

Enter the Spin-and-Go, a format clearly designed to let players “gamble while they gamble,” as it were. The Spin-and-Go’s were introduced in October 2014 and have, it seems, done very well for the site, despite initial resistance from the more vocal segment of the userbase.

Although Amaya keeps most of its usage statistics a secret, the PokerStars blog did mention at one point that Spin-and-Go’s paid out $3 billion in the first year.

A year is a sufficiently large sample that the randomness inherent in the awarding of jackpots should have evened out over that period, thus the total buy-ins paid should likewise have been approximately $3 billion. At an average rake of around 6%, then, we can deduce that the format generated in the ballpark of $180 million for the site in its first year. That’s a big chunk of PokerStars’ overall gross annual revenue, which is in the ballpark of $1.3 billion, and it’s also more than either the sportsbook or casino offerings are currently pulling in.

Numbers aside, it’s also easy to tell that the Spin-and-Go’s have been working well for PokerStars simply based on the amount of marketing muscle that has been thrown behind them.

Nearly every promotion we’ve seen since their inception has involved the Spin-and-Go’s in some way: limited edition Spin-and-Go’s with million-dollar jackpots, free Spin-and-Go tickets for depositors, various “missions” involving playing or winning a certain number of Spin-and-Go’s, and so on. Most recently, there are Cristiano Ronaldo-branded 50-cent Spin-and-Go’s in which you can win a variety of prizes including a $300,000 supercar.

“Well, if it worked for poker…”

Given how well the Spin-and-Go’s have been doing for the PokerStars brand, then, it’s no wonder that Amaya would hit on the idea of extending the concept to its other offerings.

The question, however, is whether this up-front randomization of potential payouts will really work as well for other forms of gambling or wagering as it does for poker. On the one hand, it’s true that Spin-and-Go is a modular concept, as its name implies; it is almost literally a slot machine bolted onto a poker tournament, and if you can do that there’s no reason you can’t bolt a slot machine onto whatever other game you like.

On the other hand, poker is a fundamentally different form of gambling than sports betting, and just because there are no logical hurdles in making a Spin-and-Bet, or a Spin-and-Draft, or a Spin-and-Blackjack, you can’t necessarily assume that players will enjoy all of these things equally.

Part of the problem is that each component of the resulting hybrid game is going to affect how players approach the other, and looking at it that way, it’s not clear that the interplay is going to work out well for Spin-and-Bet.

There are two critical differences between Spin-and-Bet and Spin-and-Go.

The decision-making in “spinning”

The first is that all of the significant decision-making is made before the spin in Spin-and-Bet, and after the spin in Spin-and-Go. For the former, you’ve already placed your bet once you know what the potential payout is, while in the latter, you play your game of poker after the prize is announced.

This isn’t necessarily in everyone’s favor — my personal experience is that recreational players play significantly worse in a Spin-and-Go when a large prize is on the line — but it does give the player a sense of control that will be missing from the Spin-and-Bets.

In my opinion, a large part of the appeal of Spin-and-Go’s is that they allow for the “final table experience” — that is, the drama inherent in striking upon a rare opportunity to play poker for lots of money — without the time commitment of playing a big multi-table tournament. In sports betting, on the other hand, it takes no more time to place a long-odds bet than a safer one, and what drama arises hinges to a greater degree on how the event in question plays out than anything the bettor does.

Hedging your bet

More importantly, the Spin-and-Bet format offers players an option which is absent from Spin-and-Go, and which I think is to the detriment of the format overall, which is the ability to hedge the bet.

Gamblers are attracted to the possibility of a huge score, but the truth is that once such a payday is within reach, stress ensues and there’s a tendency in most players to want to insure against that money being snatched away at the last minute. For example, in cash-game poker, it’s not uncommon to see players asking to “run it twice” in all-in situations, while for tournaments, there’s the ubiquitous final table deal-making.

It’s significant, then, that PokerStars’ deal-making functionality is disabled for Spin-and-Go’s. If you think about it, the reason is clear: a high percentage of players would immediately want to chop the prize pool the moment a jackpot prize is spun, which would somewhat undermine the whole point of the format and create a variety of problems for the site.

For starters, it would reduce the marketing value of the Spin-and-Go’s for PokerStars, as there would be no stories of million-dollar winners to tell, but I could also imagine it leading to legal issues. In many jurisdictions, the legality of poker hinges on its status as a game of skill; if players were routinely avoiding the skill component when significant money was at stake, the game’s skill nature would be harder to defend.

Meanwhile, it’s very difficult to prohibit or discourage the equivalent behavior in sports betting. If a player wagers $100 on the “over” for a football game, for instance, and proceeds to spin 10x, he might find those new stakes too stressful, and proceed to place a straight bet of perhaps $400 or $500 on the “under,” thus guaranteeing himself a few hundred dollars of profit regardless of the outcome.

On the one hand, one could argue that this is good for the site, in that the player is just paying additional juice in the long run. At the same time, it creates the same problems as deal-making in a Spin-and-Go, while a player who has found himself doing this a few times may realize he never actually wanted to gamble that much in the first place and avoid the spin option in future.

None of this is to say that the Spin-and-Bet format can’t or won’t achieve any popularity, but only to point out that it would be naive to assume it produces a player experience which is comparable to that of Spin-and-Go’s.

The differing natures of sports betting and poker mean that the addition of a spin to each won’t necessarily have the same impact, and adjustments may prove necessary.

It may, for instance, turn out that users would prefer to have a random multiplier added on after a bet has already won, similarly to how many slot machines have bonus rounds which are triggered on certain spins. So far, there’s been very little public response one way or another, but that’s likely due to the fact that BetStars itself is in its infancy.

Is the spin concept a dead horse?

The other natural worry to have is whether the the recycling of the Spin-and-X format so early in BetStars’ existence is indicative of a lack of fresh ideas within Amaya and PokerStars. It has, after all, been nearly 18 months since Spin-and-Go’s were launched, and as mentioned above, most efforts since that time have simply been aimed at getting more players into them.

There are other signs, too, that the current plan is to keep stressing the ideas that have been doing well so far, rather than continuing to innovate.

This year’s Turbo Championship of Online Poker (TCOOP) schedule, for instance, includes two never-before-seen formats — 4x-Turbo Rebuy and Progressive Ultra-Knockout — but both of these are simply taking popular previously-existing formats (3x-Turbo Rebuy and Progressive Super-Knockout respectively) and creating a yet-more-extreme version thereof. This sort of doubling down on previous successes is typical of businesses which have grown risk-averse and full of inertia in their maturity and begin to stagnate as a result.

It’s not necessarily the case that things will remain this way, however, because it appears that there’s awareness within Amaya that this is a problem.

Despite widespread cynicism about the recent slashing of the PokerStars VIP Rewards program, the silver lining is that Amaya has stated that a portion of the money being saved that way will be going into expanded research and development. Moreover, the press release regarding the launch of the Spin-and-Bets made it clear that they are only the first of many new offerings we can expect from BetStars this year.

Final judgment on the potential of both Spin-and-Bets and BetStars in general will have to be deferred, then, until we see what the coming months bring.

Sports betting doesn’t really have as many moving parts to tinker with as poker does, so it may be hard for Amaya to bring something really new to the table. If they do, it’s a separate question whether sports bettors will be open to whatever it is they come up with, or indeed whether sports bettors even want novelty in the first place.

Still, with the poker industry showing few signs of reversing its downward course for the time being, the diversification strategy may be key to the company’s future. And with other gambling markets already quite saturated as it is, some form of differentiation will be necessary in order for BetStars or StarsDraft to take off.