Editor’s note: This is Part III of a three-part series on prevailing trends regarding sports betting data in the global marketplace. Part I on the cost of data is here and Part II on supply to offshore sportsbooks is here.
Attend an Arsenal match this spring and there is a strong possibility that you might spot a shadowy figure in the crowd giving off a suspicious vibe.
The character often travels alone, eschewing crowds and passionate chants inside Emirates Stadium. He may wear a Gunners’ cap adorned with the Arsenal logo, along with sunglasses to shield his identity. One minute, he could reach into his pocket following a goal from Pierre-Emerick Aubameyang, the next he could return to his phone after a hard tackle by Granit Xhaka.
In many cases, the figure is not texting a match update to his buddy in the English countryside, but instead engaging in a practice forbidden by the English Premier League. For more than five years, data collection methods inside stadiums of the world’s most popular soccer league have been rife with fraudulent activity. As in-game sports betting has grown exponentially in recent years, so too, has dependence on the kind of practice described above, known as “over-the-top scouting.”
Over-the-top scouting and detection
The process involves the hiring of so-called data journalists or data scouts by third-party suppliers to monitor key match developments inside the venue. While the scouts may receive as little as $100 a game for their services, they perform a critical task. When Aubameyang, one of the the league’s top strikers, nets a goal the scout relays the score back to an unauthorized data center through a code. From there, it is a common practice within the industry for some third-party data suppliers to sell the unofficial data to sportsbook operators, in some instances located in offshore jurisdictions.
The codes, in most cases, are fairly rudimentary. A spotter might press the “No. 1 key,” on their smartphone for a home goal, while designating the “No. 2 button,” as a code for an away team score. Some scouts have also used iPad devices and earpieces during the transmission process.
As the licensing agent of three professional football leagues in the U.K., Football DataCo is tasked with managing the official match data of the Premier League. In 2016, Perform Group extended an agreement with Football DataCo that gave the company exclusive rights to distribute the Premier League’s official betting data. If it is proven that an unofficial data supplier has subsequently sold pirated betting data captured inside a stadium, the provider could be infringing upon Perform’s data rights.
In tennis, the ATP Tour has taken measures to deter unauthorized data scouts from engaging in a practice known as courtsiding. While some professional leagues employ as few as two official spotters at a regular season contest, the ATP has collected data electronically by professional chair umpires since 1990. Courtsiders or data pirates can create a variety of issues by producing additional sources of data that may be unreliable, prone to error and transmit slower distribution feeds, said Murray Swartzberg, senior vice president of information technology and digital media at ATP.
“Our views on courtsiding are consistent. There isn’t a need for courtsiders when the official data is broadly distributed into the market,” Swartzberg said.
Top data providers such as Perform fork over millions of dollars each year to secure such rights. Left unchecked, unsavory data providers can weaken the value of “official league data” by selling it to sportsbook operators in unregulated markets.
Headquartered in Feltham, U.K., Perform is one of four major players that dominate the global sports betting data marketplace, alongside Sportradar AG, Genius Sports and Don Best Sports. One data provider employs roughly 6,000 data scouts around the world, according to an industry source.
Challenges in U.S. stadiums
With the proliferation of legalized sports gambling across the U.S., the professional sports leagues are becoming more aware of the challenges involved in detecting unapproved data journalists, according to Adrian Ford, general manager at Football DataCo. In recent months, European football officials have had informal discussions with several North American leagues on the risks associated with over-the-top scouting.
The risks could be more pronounced in the U.S. due to stadium infrastructure concerns. At least six teams in the 2018-2019 Premier League campaign compete in venues with seating capacity under 30,000. The smallest, Dean Court, home to A.F.C. Bournemouth, holds just 11,360 spectators per match. By comparison, average stadium capacity in the NFL hovers around 65,000 with five venues at 80,000 or above. Only two, seat less than 60,000 and both may not offer NFL games beyond 2020 when the Oakland Raiders and Los Angeles Chargers are expected to move into new stadiums.
“There are many more people to identify so it’s just a scale issue,” Ford said. “It’s much more difficult to identify and therefore act.”
Just as casinos on the Las Vegas Strip utilize cutting-edge technology to gain valuable insights on the identity of potential card counters in blackjack, some leagues could employ similar measures to detect the presence of in-stadium data scouts. One league is strongly considering whether to use facial recognition software for detection purposes.
“As most leagues are pushing strongly for the use of official data, there is a need for them to make sure the data cannot be collected through unauthorized data scouts from the venue as this would undermine the value of the data. However, the technology is not there yet,” said Dr. Laila Mintas, who works as an independent consultant in the sports industry.
The issue is one of many that is expected to remain at the forefront of the data landscape into 2020. Here are others that industry experts are focused on in the coming months.
Will leagues create their own proprietary sports betting technology?
North American professional sports leagues may find other ways to integrate technological advances for sports gambling purposes. Perhaps more than any other U.S. league, Major League Baseball is viewing in-game wagering as a huge opportunity to enhance the value of its official sports betting data, and engagement with its frequent three-hour plus affairs. With a moderate pace of play, marked by long pitch counts and bullpen changes, the countless delays provide a recipe for creating unique betting markets. Matthew Holt, president of U.S. Integrity LLC., is waiting for MLB to design a module that allows bettors to wager on props such as the result of a plate appearance in real time.
“I always thought the best way for some of these leagues to participate in the revenue isn’t a data feed,” Holt said. “Why not build your own wagering products? If you think in-play is the future why don’t you build your own anyway?”
Major League Baseball has told its teams that it can do sports betting sponsorship deals only with operators who buy official data from the league.
— Darren Rovell (@darrenrovell) March 28, 2019
If a league is interested in developing their own betting platform, the costs could fall within the low-seven figures, Holt added. The expense could be offset by a slightly higher vigorish for certain prop contests.
In late February, MLB announced a non-exclusive partnership with the Switzerland-headquartered Sportradar to supply its sports betting data. Financial and other terms were not disclosed.
Then two weeks later, MLB announced a change to its lineup and umpire assignment reporting procedures; teams must now submit lineups to league headquarters, rather than posting them in the stadium, posting to their social media accounts, or sharing with beat writers. Fifteen minutes after shipping over the lineups, teams may follow their own regular procedures. The net effect appears to be preserving or heightening the value of the information for the benefit of bookmakers paying for that information, possibly to the detriment of the sports bettor himself.
— David Payne Purdum (@DavidPurdum) March 28, 2019
Role of private security firms
Currently, the Premier League has enlisted a third-party security firm to spot unauthorized data scouts inside a stadium setting in attempts to determine if the spotters are infringing upon the league’s official data rights. Under ticketing conditions for entry into a Premier League game, clubs are given the right to eject a data spotter from a stadium. An unofficial data provider can take a reputational hit when their scouts are consistently removed from venues, Ford said.
While DataCo is not currently exploring methods for disrupting the flow of unofficial data transmitted by these scouts, there may be a technical solution down the road, he noted.
One problem is that the scouts are using the same 3G and 4G networks that are made available to the general public inside a venue. By blocking the signal of a scout from transmitting data to an outside source, a club may be forced to shut down WiFi networks that thousands of spectators rely upon for entertainment purposes.
“Clubs clearly won’t be very keen to deprive their customers of that kind of service, so you’re down to old-fashioned detective work,” Ford said.
The security measures have produced varying results. After initially deploying scout spotting in the 2013-2014 season, DataCo’s detection rates began to increase in subsequent years. While the scouts have come up with better ways to disguise themselves, the security firm has also refined its detection capabilities. DataCo’s detection rates are fairly consistent, Ford said, adding that it can predict with reasonable accuracy its success rate.
Sports betting presents a lot of opportunities, but what are some of the potential dangers?
— Hashtag Sports (@HashtagSports) November 28, 2018
A 2012 ruling in the Court of Justice of the European Union, meanwhile, provided some clarification for leagues on their database rights during live football matches. Ford emphasized that while some sort of legal action against unofficial data scouts could be a potential recourse for DataCo, it is not something that the Premier League is currently pursuing.
Outside Europe, there are indications that anti-scouting initiatives could be tested in North America in the near future. Beyond 2020, artificial intelligence could be used by the firms to help conduct the anti-scouting sweeps.
A 2016 ruling in U.S. federal court on data infringement issues in chess broadcasts, sheds further light on the topic. In that case, U.S. District Judge Victor Marrero ruled that the organizers of the World Chess Championship failed to demonstrate that a rival website would have engaged in unauthorized “free-riding,” by broadcasting chess moves from the event in real time. Marrero also cited NBA v. Motorola as precedent, in concluding that sports scores, as well as moves in chess, are not protected by copyright.
In 1997, a U.S. appeals court ruled in favor of STATS LLC and Motorola in a case brought by the league. The NBA asserted that the companies infringed upon the league’s copyrights by distributing in-game information through a wireless device.
“As evidenced by the recent ruling in the real-time chess case, the decision in the NBA’s lawsuit against Motorola and STATS remains relevant today,” said Ryan Rodenberg, an associate professor of sports law anlaytics at Florida State University. “Also, the Second Circuit in the decades-old NBA case footnoted the potential First Amendment issue that looms in the context of real-time sports data.”
Todd Fuhrman, a former Caesars oddsmaker and industry expert from FS1’s sports betting program Lock It In, believes the leagues are going to have employ all means necessary to guard against corporate espionage. For now, it appears difficult for clubs to differentiate between a scout transmitting data for betting purposes with a fan texting a score to a friend.
“On an NFL Sunday if you’re going through a stadium that has 80,000 plus fans, figuring out who is doing something and who is not becomes a very delicate balance for the leagues,” Fuhrman said.
Part I, in case you missed it: Here’s How Much ‘Official’ League Data Actually Costs.