Opinion: NBA Tracking Data Deal Between FanDuel, Sportradar Raises Major Questions

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Last week, news broke of a new partnership between FanDuel and Sportradar involving NBA data, and it appears the moment that no one has been waiting for has arrived.

Yes, betting on player tracking data is coming. At least that is what it sounds like.

Does anyone want to bet on that? My guess is the market is smaller than the figures that marketing departments have fed optimistic executives for years, leading to those executives repeatedly floating the idea that this information would be of interest to bettors.

Remember the AAF?

This was supposed to be one of the big innovations of one of the football leagues that was not the NFL, one of the ones that did not even make it through its first season. But bettors were not interested in the novelty prop bets or the underlying product.

But this is not to say that the information is not valuable. Player tracking data is incredibly valuable for a sportsbook and a sports bettor, which is why it is especially concerning when only one side of the market can access the information.

There are also implications for market competition. FanDuel, the biggest sports betting company in the US by market share, now has better information than its competitors, although that is likely to be short-lived as the deal is non-exclusive.

What’s in FanDuel deal with Sportradar

The press release from Sportradar announced a new deal through 2030-31 between the data provider and FanDuel. The deal provides FanDuel with NBA official league data beyond the norm. The deal extends an existing arrangement but adds some new features, most notably:

Sportradar and FanDuel will collaborate to enhance the sports betting experience through innovative products and offerings including, for the first time, the use of certain player tracking data to create props and support the growth of same game parlays. Prop and parlay style wagering, which continue to increase in popularity, enable customers to bet in new and more creative ways.

The deal also includes access to SportRadar’s Live Channel Trading product, which is a transmission feed up to eight seconds faster than the television broadcast.

Wait, the NBPA agreed to the sale of player tracking data?

Well, it is not exactly clear from the press release. The  2017 CBA between the NBA and National Basketball Players Association (NBPA) contained a section devoted to wearable technology.

While participation in a team program using wearables is voluntary and teams are not able to use data collected against players in salary negotiations or face a (laughable) $250,000 fine, the question of the commercialization of the data, however, was left open.

So there is a possibility that an agreement was reached between the NBA and NBPA, or there is the possibility that this data is being generated through technology other than wearables.

What are potential issues with FanDuel agreement?

There are a few issues, in my view.

The issue is not with the prop bets. If someone wants to bet on whether Steph Curry travels more than 10 miles during a game, that is uninteresting to me, but go ahead.

There are undoubtedly potential ethical issues, but until we see the types of bets being offered, it is probably premature to dig to deep into those hypothetical issues.

The primary issue is with what can be derived from that information, which at the moment is unavailable to bettors.

Fun or something else?

Player tracking data is fun when it is part of a broadcast, but the information derived from that data can be used to derive a lot of other information. For example, if you know that a player normally does certain things and then one night he is not doing what he normally does, that is a pretty good sign that something is off.

Now that could be a good thing or bad thing, but it is something different. A single data point is not going to tell us much, but with enough data, we can build pretty good predictive models based on player tracking data. When only one side knows that someone is acting strange and the rest of the market is in the dark, there are fundamental questions of fairness.

Who knows what and when?

Think about this: would you bet on NFL games at a sportsbook if they got to see the injury report and you did not? That might not be an apples-to-apples comparison, but the sportsbook, in both cases, is getting information that the rest of the market does not get.

Bookmakers are at an advantage. They set the prices, manage the money, and have years of experience.

Bettors with superior information do better than casual bettors. Academic work backs that up, and there is nothing wrong with doing hard work to gain an advantage. But everyone needs to have the ability to access the same information.

Economics view of FanDuel, Sportradar deal

I spoke to Brian Mills, a sports economist and associate professor at the University of Texas at Austin (an academic co-author of mine):

Underlying player tracking is likely to tell us things we can’t really glean from the usual outcome variables (shot percentage, shots taken, etc.) and the measures are 1) much more persistent, and 2) likely much more predictive of expected outcomes.

In baseball – which I know best – having information on release point, for example, has the potential to tell us when a pitcher is tiring. Similarly, when tracking NBA players, I would expect that keeping tabs on distance covered, running speed, etc. would provide some additional information about whether a player is fatigued (or injured) that are not observable otherwise. That sort of information seems likely to better predict whether the player will get a chance to shoot, choose to shoot, or make the shot that the outcome percentages don’t tell us.

Imagine if you had reliable information on whether the Kentucky Derby favorite was injured or fatigued, and nobody else knew.

Who knows if NBA tracking data is accurate?

Another question is whether this information qualifies as verifiable.

All US regulated markets rely on verifiable results. Player tracking data is something proprietary. There is no ability for independent verification absent the NBA’s consent.

This raises fundamental questions about what happens if Mustard Guy drops the dog again, like when it appeared the Toronto Raptors committed no turnovers in the first half but it was later determined they committed two.

Lastly, this gives FanDuel an even stronger advantage in the market that they are already out in front of. While the deal does not appear to be exclusive and one would expect most major operators to get in line, if you are a smaller provider already questioning how you will ever turn a profit, now the biggest company on the block is about to receive a data package that gives a significant competitive advantage. Things are probably not super cheery around the office in that case.

Fewer companies in the market is not good for the industry. It is also not good for the market to have an information imbalance that further favors the sportsbooks.