Sports Betting Focus 2017
WHAT ’ S THE NEXT BIG INNOVATION ?
Real innovation is rarely seen in sports betting , with paradigm shifts such as in-play and cash-out few and far between . Bernard Marantelli of Colossus Bets explains what is holding the vertical back and predicts crowdbetting will provide the next big change in the ecosystem .
When cash-out emerged a few years ago , it was seen as one of the rare and few ‘ true ’ innovations in an industry that is generally perceived to be innovation-starved . Now that cash-out is established as a mainstream feature , I am often asked what is next and why it is that sports betting does not produce such innovations more often .
Starting with the ‘ why ’, I partly dismiss this perception as unfair . We tend to think of innovation as a binary choice between ground-breaking change or no change at all , whereas in reality , there is a spectrum — even minor innovations can prepare the ground for what is to come .
“ Crowdbetting is to sports betting what Uber is to hired driving and Airbnb is to the hospitality market ”
We also forget that innovation is in some respects circumstantial . Let ’ s reflect on the three most frequently cited innovations of the past 20 years . First , exchange betting could not have existed until the change from UK betting duty based on turnover to one based on gross profits ( and the widespread adoption of the Internet ), thus its rise in the early noughties ; second , in-play betting could not have existed until we had wall-to-wall TV coverage of soccer , thus its rise in the late noughties . And finally , the expectation that these earlier innovations built among players for a new level of engagement and control propelled cash-out into dominance . Ultimately , there is no single reason why innovation occurs but there is definitely a strong element of timing and momentum 1 .
On the other hand , it is true that in recent years operators have not focused on product innovation . Industry heavyweights have come under increasing pressure to defend their market share from a seemingly endless line-up of startups , which has escalated into a marketing war of attrition . What used to be odds of 5 / 4 for Arsenal has become 11 / 8 , with massive margin pressure on ‘ me too ’ bet types . This focus has inevitably had a knockon effect on innovation capacity and depth .
Brand innovation is important but with no product differentiation underpinning it , the long-term prospects of the business are compromised . Nowadays , many of
the operators I speak with acknowledge that they are struggling with product development resource , as well as having difficulty instilling an innovation mindset in their organisations . In fact , the bigger the operator , the harder it is to innovate , which culminates into a vicious cycle of defending market share rather than embracing innovation . This is the aftermath of a long period of ‘ marketing first ’ and there is no quick remedy to it .
So what is next ? Ultimately , innovation needs to serve both operators and players to succeed and I believe there are a few products , albeit still niche , that deliver this ‘ win-win ’. One of my favourite examples is BetVictor ’ s ‘ Lengthen The Odds ’, which gives a higher margin to the operator and a flexible bet to the player .
1
On the importance of timing , see TED . com : The single biggest reason why startups succeed .
There are several good reasons to believe that crowdbetting could be the key to the next era of innovation and growth . First , it appeals to a broader , non-expert audience , less familiar with traditional sports betting but keen on exploring new forms of engagement with the sports they love , as well as sharing the experience in a community setting . Second , it ‘ finds ’ this audience where they already are — on their preferred social media or other communication platforms . Third , it constitutes a paradigm shift in the product-marketing continuum .
Typically , marketing is sequential to product and the players are on the receiving end of the marketing message . With crowdbetting , marketing is embedded in the product in the form of social sharing and the players are equally receivers and transmitters of the marketing message , becoming de facto affiliates . This dynamic has so far surpassed my expectations and I believe that within the next two to five years , it will diminish formal affiliate ecosystems .
After all , the most commercially successful innovators of our times — companies like Uber and Airbnb — are businesses that did not just invent a new product but also changed the underlying ecosystem of that product . I believe that crowdbetting is to sports betting what Uber is to hired driving and Airbnb is to the hospitality market . It holds the potential to redefine the sports betting proposition and unleash the power of players and platforms beyond operators ’ current reach .
Bernard Marantelli is CEO and founder of Colossus Bets . Bernard is a professional gambler turned operator who believes lotto-sized sports jackpots are the future of betting . He is the pioneer of cash-out and partial-cash-out in several gaming verticals and holds numerous patents on this IP . He holds a science degree and MBA .
iGamingBusiness | Issue 105 | July / August 2017 | 79