• About Us / Contact
  • Responsible Gambling
This site contains commercial content
SportsHandle
  • US Sports Betting
    • Arizona
    • Arkansas
    • Colorado
    • Connecticut
    • Delaware
    • Illinois
    • Indiana
    • Iowa
    • Kansas
    • Louisiana
    • Maine
    • Maryland
    • Massachusetts
    • Michigan
    • Mississippi
    • New Jersey
    • New Mexico
    • New York
    • Ohio
    • Oregon
    • Pennsylvania
    • Tennessee
    • Virginia
    • West Virginia
    • Wyoming
  • Pending States
    • California
    • Florida
    • Georgia
    • Missouri
    • North Carolina
  • Canada
    • Ontario
    • British Columbia
    • Alberta
  • Sportsbook Apps
    • FanDuel
    • BetMGM
    • Caesars
    • PointsBet
    • BetRivers
  • Tools
    • Sportsbook Bonuses Explained
    • Sports Betting Revenue Tracker
    • Sports Betting Podcasts
    • Partnership Tracker
    • Expected Value
    • Sports Scores And Odds Apps
    • Sports Betting Twitter
    • Guide To ‘Risk-Free’ Bets
  • News
No Result
View All Result
SportsHandle
  • US Sports Betting
    • Arizona
    • Arkansas
    • Colorado
    • Connecticut
    • Delaware
    • Illinois
    • Indiana
    • Iowa
    • Kansas
    • Louisiana
    • Maine
    • Maryland
    • Massachusetts
    • Michigan
    • Mississippi
    • New Jersey
    • New Mexico
    • New York
    • Ohio
    • Oregon
    • Pennsylvania
    • Tennessee
    • Virginia
    • West Virginia
    • Wyoming
  • Pending States
    • California
    • Florida
    • Georgia
    • Missouri
    • North Carolina
  • Canada
    • Ontario
    • British Columbia
    • Alberta
  • Sportsbook Apps
    • FanDuel
    • BetMGM
    • Caesars
    • PointsBet
    • BetRivers
  • Tools
    • Sportsbook Bonuses Explained
    • Sports Betting Revenue Tracker
    • Sports Betting Podcasts
    • Partnership Tracker
    • Expected Value
    • Sports Scores And Odds Apps
    • Sports Betting Twitter
    • Guide To ‘Risk-Free’ Bets
  • News
No Result
View All Result
SportsHandle
No Result
View All Result

The Future of Sports Betting: Product Innovation And Startup Verticals

To what extent will innovation drive future retention?

Lloyd Danzig by Lloyd Danzig
June 9, 2020
in Industry
(Shutterstock)

(Shutterstock)

Share on FacebookShare on Twitter

Editor’s Note: The following article is adapted from the same-named audiovisual presentation given by the author to Eric Waz of BettorIQ. You can watch the presentation by clicking here.

For Part I of this series, on challenges, opportunities and a focus on commerce, please go here. 

***

Sports Betting Product Innovation

While offering generous bonuses and more favorable odds are common ways in which B2C operators compete for market share (i.e. “competing on price”), the hope is that product innovation, which benefits consumers by way of enhanced user experience, drives a great deal of future retention in the sports wagering market.

Micro Betting

One popular area of interest, often leveraging the benefits provided by Machine Learning, is being dubbed “micro betting.” Micro betting describes wagering on short-duration events that are easy to follow. While more experienced bettors and fantasy players may enjoy tracking two basketball players’ total points plus assists plus rebounds, many will prefer to simply bet on whether or not LeBron James makes his next 3PT shot. It is expected that wagering on upcoming, individual at-bat outcomes in MLB games will be quite popular in the near-term. While this format requires advanced modeling and is easier to deploy under a Free-to-Play or lottery model, the intuition is that a lot of new customers in valuable user bases could be won over by the first movers to properly thread this needle.

Peer-to-Peer (P2P)

Peer-to-peer wagering, whether by way of the conventional betting exchanges that are popular overseas or by some other mechanism, is certainly the wave of the future, though there is a very uncertain path that connects now to then. For one, there is The Wire Act, a 1961 piece of legislation that prohibits the transmission of money or information across state lines for the purposes of facilitating a wager. This prevents a customer in one state from being permitted to place a wager with a customer in another state, even if both of those states allow online gambling. Additionally, only half of states even permit P2P wagering within their borders.

While running intra-state liquidity pools may be an option, it is unclear whether the lack of customer education will remain as a barrier. DFS has leveraged the benefits of P2P, at least to an extent, but sports betting has a lot of room for growth. Historically such companies have not been able to leverage network effects, but P2P functionality could be part of the plan to change that.

Lottery Games

Lottery games are generally ones in which 100% of the outcome is attributable to chance and none to skill. In the U.S., lotteries have always held a special status within the regulatory framework. They typically utilize random number generators to bring perfect parity to the playing field and negate any possibility for a sharp edge. This is especially important as many DFS players have reportedly become a bit disillusioned as of late with around 80% of DFS prize money going to 1-2% of participants. There is a growing interest in applying lottery mechanics to sports betting, because the model is much lower-lift from a consumer perspective and facilitates acquisition, while also mitigating risk and offering more predictable revenue streams for operators.

Free-to-Play (F2P)

Free-to-Play games and contests are those which do not require real money to play or enter. Because obtaining a gaming license is such a costly and burdensome process, many startups choose to operate under this framework. 

In fact, since most states in the U.S. still do not allow mobile wagering, F2P often represents a compelling alternative to picking up and moving to London or Malta, though people certainly do that. Going the F2P route allows startups to acquire users, prove their product-market fit, and then decide on the best way to continue monetizing their Unique Selling Proposition.

One option, upon scaling a user base, is to convert from F2P to RMG (Real Money Gaming), by getting licensed in a certain state or states. A nice alternative, at least for now, is monetizing a user base via affiliate marketing, in an industry with insanely lucrative CPAs. 

One challenge with F2P, however, concerns game mechanics and properly incentivizing users. Generally, F2P contests draw a large audience and offer prizes of value to just a small minority of participants. This “winner-take-all” structure, combined with the fact that users do not have real money at risk, tends to cause them to pursue the riskiest possible predictions with the highest payouts, quickly skewing the experience of all other participants. A number of tactics are being used to combat this, but artificial restrictions on markets also come with drawbacks.

eSports Betting

It will surprise no one that eSports betting is on the rise. Current figures show that fans are on track to wager between $13 billion-$15 billion this year worldwide on esports. Moreover, general interest in gaming and the surrounding communities has skyrocketed. Still, the young age of participants and fans gives rise to integrity and match-fixing concerns. In addition, obtaining reliable data feeds and properly setting market odds is generally new territory for many.

(Shutterstock)

Competitive Gaming

The increase in competitive gaming interest is occurring among a gambling-age (and soon-to-be gambling-age) population at the same time that sports betting and, adjacently online casino, are growing more popular than ever. A number of startups are attempting to monetize this trend by providing peer-to-peer wagering platforms that allow individuals to wager against others on their own video game performance. The regulatory and logistical hurdles are robust, but the user base may be largely untapped and of particularly compelling value. Scalability, and the liquidity that comes with it, may also be challenging while adoption is slow.

Hobby Gamification

It is possible that competitive video gaming is only one component of this corner of the ecosystem. The home wellness and health tech craze that often overlaps with the sports industry paves the way for an interesting market opportunity. One of the best things about sports is the simultaneous camaraderie and competition that it fosters. To this end, there are ongoing discussions about the gamification of hobbies where, for example, two people place a wager on who can complete a 5K more quickly from the comfort of their respective homes and Peloton bikes. While a plethora of challenges remain, the untapped user base would be a source of enormous value, perhaps even in excess of the competitive video gaming demographic.

Startup Verticals

It is unclear exactly which technologies that shape the future of sports betting will be organically developed here in the U.S. and which will be imported from overseas markets. There is a great deal of Private Equity interest in assembling vertically integrated portfolios of turnkey sports betting assets, however there will need to be a great deal of expertise and tact used in maximizing profitability within the U.S. market. That said, there are a few areas that seem to be attracting a bulk of the startup talent and investment capital.

Betting Intelligence

“Betting Intelligence” tools and platforms allow customers to take a more research- and analysis-driven approach to sports betting. They also drive prospective users further down the conversion funnel, thereby representing a compelling source of customer acquisition and retention, as well as UX enhancement.

Financial Productization

“Financial Productization” refers to the rise in mechanisms for wagering on and engaging with sporting events that more closely resemble investment vehicles and platforms than traditional sportsbooks.

Social Betting & Gamification

For many users, sports betting is less about profitability and more about camaraderie and competition. “Smack talk culture” is alive and well here in the U.S., as evidenced in part by the recent Barstool valuation. The opportunity to digitally connect fans through sports betting will not only drive high-octane engagement but also allow stakeholders to monetize some of the pent up demand.

Data & Analytics

High-fidelity, low-latency data feeds accessible via intuitive APIs will play an increasingly vital role in the sports betting space as it matures. As the vast array of available data grows exponentially larger, those who can most efficiently incorporate and leverage it will gain immense competitive advantages, particularly in the service of delivering superior products.

Content & Engagement

Sports betting is one of the most potent drivers of engagement in the entire entertainment industry. Emerging platforms are creating new, scalable revenue streams and mechanisms that capitalize on this fact.

Sustainable Gaming

And finally, responsible gaming, hopefully soon referred to exclusively as sustainable gaming, is an area of great focus in more mature markets like the UK and Australia. It has yet to gain the same level of interest here in the U.S., but that is only a matter of time. In the interim, some startups are using cutting-edge software and predictive analytics to bring new solutions to market within this vertical.

Conclusion

There are times of incredible growth ahead of the sports betting industry. There are also a complicated web of factors representing simultaneous opportunity and challenge for stakeholders. Technology is a critical part of the puzzle, but not the entire thing. It will require incredibly strategic thinking to properly import learnings and assets from established markets while also giving adequate deference to the uniqueness and plasticity of the U.S. sports betting landscape.

 

Follow Danzig on Twitter @LloydDanzig and his sports gaming advisory firm @SharpAdvisors.

ShareTweetShare
Lloyd Danzig

Lloyd Danzig

Lloyd is the Founder & CEO of Sharp Alpha Advisors, a sports gaming advisory firm with a focus on companies deploying cutting edge tech. He is also the Chairman & Founder of the International Consortium for the Ethical Development of Artificial Intelligence, a 501(c)(3) non-profit NGO dedicated to ensuring that rapid developments in the field of AI are made with a keen eye toward the long-term interests of humanity. Lloyd serves as the Co-Chairman of the CompTIA AI Advisory Council, a committee of preeminent thought leaders focused on establishing industry best practices that benefit businesses while protecting consumers. He previously managed institutional portfolios for BlackRock, data science initiatives for Samsung, and Machine Learning engines for sportsbook operators. He also functions as a mentor for Techstars and the leAD Sports Accelerator.

Related Posts

raiders-cheifs-chart-sporttrade
Features

Sporttrade Is A True Sports Betting Thrill Ride

October 24, 2022
Sports

The Six Best Sports Scores And Odds Apps To Download

January 14, 2022
Load More

Top Stories

patrick mahomes

Mahomes’ Ankle Speculation Twists Line Movement In Chiefs-Bengals Rematch

January 27, 2023
fanatics-grand-opening

Fanatics Sportsbook At FedEx Field Offers Unique Retail Option In Maryland

January 23, 2023
Shutterstock

Missouri Legislators Lament Exodus Of Bettors To Neighboring States

January 27, 2023
rob gronkowski adam vinatieri

Rob Gronkowski Goes Training Montage Route In Latest FanDuel Spot

January 17, 2023

State Sports Betting Guides

Ohio (U.S. state) flag waving against clear blue sky, close up, isolated with clipping path mask alpha channel transparency, perfect for film, news, composition

Ohio Sports Betting – Where To Play, Bonus Offers And Promo Codes

by Brian Pempus
January 25, 2023

Downtown Detroit at twilight (Shutterstock)

Michigan Sports Betting – Where To Play, Online Sportsbooks, And FAQ

by Brett Smiley
January 27, 2023

VA captial

Virginia Sports Betting – Where To Play, Online Sportsbooks And Bonus Offers

by Brett Smiley
January 17, 2023

nj flag

New Jersey Sports Betting — Where To Play, Online Sportsbooks, And FAQ

by Brett Smiley
October 20, 2022

pa online sportsbooks

Pennsylvania Sports Betting – Where To Play, Online Sportsbooks And Bonuses

by Brett Smiley
October 6, 2022

Canada Sports Betting Guides

Canada Sports Betting – Best Sportsbook Apps & Bonus Offers

British Columbia Sports Betting – Legal Update, Available Sportsbooks, and FAQ

Ontario Sports Betting – Legal Status And Where To Play

gambling therapy
ncpg
igaming ontario
If you or someone you know has a gambling problem, crisis counseling and referral services can be accessed by calling 1-800-GAMBLER (1-800-426-2537) (IL). Gambling problem? Call 1-800-GAMBLER (MI/NJ/OH/PA/WV), 1-800-9-WITH-IT (IN), 1-800-522-4700 (CO), 1-800-BETS OFF (IA), 1-888-532-3500 (VA) or call/text TN REDLINE 1-800-889-9789 (TN).
19+. Please play responsibly. Terms and conditions apply. 
Individuals must be 19 years of age or older to participate in igaming in Ontario. Gambling can be addictive, please play responsibly. If you, or someone you know, has a gambling problem in Ontario and wants help, please visit ConnexOntario or call their helpline at 1-866-531-2600. Operators on this website operate pursuant to an Operating Agreement with iGaming Ontario.

Search Sports Handle

No Result
View All Result
  • About Us / Contact
  • Responsible Gambling

No Result
View All Result
  • US Sports Betting
    • Arizona
    • Arkansas
    • Colorado
    • Connecticut
    • Delaware
    • Illinois
    • Indiana
    • Iowa
    • Kansas
    • Louisiana
    • Maine
    • Maryland
    • Massachusetts
    • Michigan
    • Mississippi
    • New Jersey
    • New Mexico
    • New York
    • Ohio
    • Oregon
    • Pennsylvania
    • Tennessee
    • Virginia
    • West Virginia
    • Wyoming
  • Pending States
    • California
    • Florida
    • Georgia
    • Missouri
    • North Carolina
  • Canada
    • Ontario
    • British Columbia
    • Alberta
  • Sportsbook Apps
    • FanDuel
    • BetMGM
    • Caesars
    • PointsBet
    • BetRivers
  • Tools
    • Sportsbook Bonuses Explained
    • Sports Betting Revenue Tracker
    • Sports Betting Podcasts
    • Partnership Tracker
    • Expected Value
    • Sports Scores And Odds Apps
    • Sports Betting Twitter
    • Guide To ‘Risk-Free’ Bets
  • News

loading

Please wait while you are redirected to the right page...

Please share your location to continue.

Check our help guide for more info.

share your location