Is 2019 the year second-tier sportsbook brands break through?

It’s August, the height of summer, and Europe bakes in unprecedented heat so, naturally, it must be time to think of the new football season. And as thoughts turn to wet Wednesday nights in Watford, they also turn inevitably to the world of online sports betting and what the new season will bring for the firms that continue to throw money at a market that doesn’t always give them a great deal back. Could this be the year that the tier-two and tier-three firms finally start to break through?

There is no shortage of contenders after all, and some made meaningful ground over the course of the last season and continue to plough money into sponsorships and advertising. While the tier-one operators have been smart enough to pull the plug on most TV advertising opportunities with the advent of the whistle-to-whistle ban, the digital world will be heaving under the weight of promotions, offers and “unique content” from a number of new and established players snapping at the big five’s heels.

The leading tier-two operators, although not likely see themselves as such, are Kindred, Betway and BetVictor and all present differing threats to the established top tier and all made some good ground in the preceding season. Kindred retains a very aggressive market share target for the UK and its sponsorship of Aston Villa will be a key asset in the new season ahead, while it retains a number of major deals in the Championship. Betway and BetVictor have their eyes on a broader international market, but the UK is still very important to both.

But it’s outside of these firms where things become more interesting. What we have is a large group of mostly gaming-led operators targeting the newer recreational consumer and one firm in particular taking on the opposite end of the spectrum. In the former camp we have the likes of 888, LeoVegas and you suspect a few more to come during the rest of the season alongside a number of firms on the SBTech platform not least the house brand 10bet. These brands will all be operating significantly sub-scale to the top tier, but their threat is meaningful.

The new battle ground

With sports betting viewed as an acquisition and retention channel as much as a revenue driver itself you can expect increased aggressiveness on acquisition and retention offers, and the skills in SEO, PPC and some of the darker arts of digital marketing required to be a successful casino business will make life harder and more expensive for operators in the sports betting sector. What could also be an interesting challenge is how successful the casino firms are at repositioning the sports betting offering for a newer and younger audience.

888’s new front end is not a radical departure but it does offer something a little different from the core sports betting experience that remains based on something first drawn up a couple of decades ago. Gaming operators designing a sports betting experience both for existing customers and for a more gaming-focused player may begin to alter expectations around a certain, very profitable, player type and this could raise its own challenges. Alongside this we have another tier of revolutionary operators who are looking to change the UX entirely.

Football Index is arguably the most radical of these, although it remains to be seen if that model can work at scale and when facing a bit more rigorous customer scrutiny. Alongside this we have the likes of mobile-first operators like Kwiff and Bookee although few would legitimately see these as a threat to the major firms. But consumer trends can be surprising in their swiftness to change, and the established firms do feel very much from a different age on mobile. What we’ve also seen over the past 12 months is a rush to add in new events, offers and content with the end result that even the best mobile apps from the leading players feel a bit like the middle aisle at Aldi on a busy Saturday afternoon.

At the other end of the UI scale we have the more serious tier of operators looking to break open not just the UK but a wider variety of international markets. This is perhaps best exemplified by Marathonbet who unveiled a brand-new identity, or a new brand identity depending on how you look at it. “The rationale is to provide a much cleaner, more consistent communication thread across Marathonbet’s localised teams but also give the ability to promote key messages in a more succinct format,” Marathonbet’s head of brand Dan Towse told EGR in an ironically long quote. But the intent is clear.

A genuine threat

As detailed in this exceptional piece on Marathonbet on EGR this is no small operator trying to steal a bit of cheese out of the UK leftovers. The firm may have focused on Russia initially, but it now focused on growing in a number of regulated and grey markets and has both the marketing war chest and the differentiated proposition to compete. Its low margin model gives it some cut-through even in the UK with a sizeable clickshare from Oddschecker last season, and it will likely continue to be a headache for some of the operators in the market.

The issues with Marathonbet is more around its UX, which doesn’t compare favourably with some of the bigger players in the UK market and building its brand and above the line marketing doesn’t feel like it will be enough to push on beyond the low-margin niche. But it does have its own technology platform and a healthy base of non-UK revenues to fall back on. And it clearly presents a challenge to Betfair and bet365 and could perhaps do more damage in markets such as Spain and Italy where bet365 is the near de-facto choice.

But can they or anyone else really crack the UK open? The answer is it probably doesn’t matter if they can or not, as the impact will be felt regardless. What we are dealing with is a new market dynamic of well-funded and increasingly technologically independent entities with different aims and considerable ambition and this has to lead to some change. Even the smaller operators will continue to chip away at market shares and steal wider sector growth at a time when the macro sector is seeing considerable slowdown and there are no shortage of both top line and bottom-line squeezes in place. This is no time for complacency.