Promoted feature: Fail to prepare, prepare to fail

Recent years have brought about an incomparable level of uncertainty to our industry. The initial blow of the pandemic, cost pressures ramping up M&A activity and regulatory issues affecting marketing processes are just a few of the challenges the gambling and sports betting sectors have faced, and the end games are yet to play out.

Any mature marketplace or industry has to navigate such foreseen and unforeseen issues. Times change, events happen and tastes evolve. In our case, advertising regulations have made it trickier to go direct to the broadest markets, Covid-19 has shifted the betting patterns of vast cohorts of our customer bases, and new ways of consuming entertainment have affected when and how our customers like to bet.

Of course, we saw these threats down the line, bar the pandemic where we saw a collective spirit adapt and succeed in the face of one of the bleakest times in sports betting’s recent history. Most of us have solutions, some are working better than others and are putting strategies and plans in place to deal with the changing behavioural and regulatory environments we encounter. And it should be said that being ahead of the game has allowed most to ride out the storm and adjust successfully.
Prevention or cure?
There’s a danger, though, that we’re always looking for brand new solutions to potential problems or add-ons to add potential value to our betting offerings. Going down new marketing avenues and introducing new products can be risky moves; dealing with unknowns at a time of uncertainty isn’t always pertinent, particularly when performance gains can often be found closer to home, at both a lower risk and outlay.

Getting your own house in order, fulfilling its potential based on current resource and market position, can provide the foundations for further growth, while also delivering on the bottom-line performance requirements that we all want now.

When it comes to sports betting, pursuing untapped audiences to drive additional revenue streams should be an evergreen objective, but we’d argue that looking at maximising potential revenue – that’s already at hand – by optimising player profiling strategies is a quicker route to long-term gains.

There’s an increasing backlash in betting circles against operators with heavy-handed staking processes, so from both a brand and risk point of view, we should all be looking at more agile ways of giving bettors a fairer deal, while also realising the revenue that is too often turned away at source.

Likewise, new betting markets and bet request products are now fully in vogue as a means of engaging with the digital-native, younger demographic. Running parallel to this is the increasing understanding of the trading process, which social media has certainly helped develop. Odds comparisons are widely available and utilised, and stats and analysis increasingly back up the decisions of these bettors, so getting the odds right on core markets and looking authentic can be the tool to make you stand out to this more discerning audience.

Repeatedly seeing the same ballpark prices across 1X2 markets on a 3pm Premier League kick-off must be disillusioning to those who want to find value to reflect their research. Seeing homogenous pricing so rife is turning customers off; they can feel insignificant if they perceive bookmakers to be acting as a cartel on some arbitrary mid-market position. Instead, acting more independently on direct liabilities can not only ensure that your risk is optimised but it also means your standout prices will be tracked by more eyeballs, driving further revenue.
Optimise to the max
In this age of uncertainty, it’s clear we need to adapt. But that doesn’t always mean chasing the new. It’s now more important than ever to control what we do have power over. Keeping our own product affairs streamlined by delivering cost efficiencies, capitalising on the potential of existing customers and optimising the hold on this additional revenue should be the highest priority.

That’s not to say we shouldn’t be ambitious in new tech delivery and better-targeted marketing campaigns, but without being ruthless on the fundamental KPIs of the sportsbook operation we’ll be taking a longer, slower route to a destination far closer to home. This isn’t a blinkered attitude that puts innovation to one side; instead, we’re complementing innovation with fulfilling the potential of functions we already have in-house, particularly when it comes to risk management.

There aren’t quick fixes to improve risk management and trading processes, and it does require full buy-in from those who dictate trading strategy. But as a means of maximising revenue that is already within reach, ensuring best practice across the relevant departments can be a game-changer, both in the short and long term, while the secondary marketing benefits that come from unique pricing and better treatment of bettors shouldn’t be underestimated.

Whether it’s the Super Bowl or a midweek League of Legends match, once the event has started you can only really look after two things: the prices you lay and the risk you take. There’s no time to reel in last-minute custom, you’ve got to play the hand you’re dealt.

And you can play that hand in a number of ways. Modelling for multi-market live sports is complex, even more so when the data isn’t always at hand as is so often the case with esports, but it only complicates matters when you have to factor in liability outside of your control, such as following competitor prices with liabilities likely very different to your own.

Internal trading solutions are increasingly expensive, particularly for the level of resource required to fulfil a truly high-end risk management and content-rich operation. Some tier-one operators can and choose to cover this outlay, particularly with the safety net of more recreational punters. But, for those who are looking to unleash those few percentage points that allow for future growth, perhaps it could be an opportunity to look not at new products and costly marketing campaigns but at specialist partners who can add value by fulfilling existing potential.

Outsourcing some, if not all, of a sportsbook’s risk and trading functions isn’t a step backwards that goes against growth and accountability. Instead, it should be seen as progressive, innovative and rational. Optimising trading solutions by working with those who have specialised in them frees up internal resource, drives bottom-line performance and delivers brand trust through bespoke prices and fairer profiling.

In a time of such uncertainty, we should better control what we can control, whether that’s by reviewing our risk management strategies internally or by working with proven specialists. Going back to the fundamentals may not be trendy, but it works.

Sam Wright is the marketing lead for risk management specialists and esports experts Pinnacle Solution. Since joining the growing team in 2020, he has established a scalable marketing strategy for the B2B supplier as it expands its footprint into new global markets. Wright uses his first-hand knowledge from earlier career roles as an odds compiler to translate the complexities of first-class trading products into real benefits for operator partners.