IN-DEPTH 12 May 2016
Carving out a niche in the eSports betting market
Matt Stephenson, Business Development Director at Betgenius, offers analysis of the evolving eSports betting market
By Gambling Insider
How has Betgenius developed in your decade with the firm?
I've been working here since there were just 10 or 12 of us in a small office in London Bridge, and now we have offices all over the world with a team of over 150 in the London HQ. The business has evolved and diversified, having started off as a humble odds comparison business. Since then we have incorporated an ad-serving business, grown to provide both marketing and trading software services to lottery organisations and bookmakers, and more recently have diversified into providing integrity services to sports governing bodies. It has been frantic and fun, but the core principles of the business are much the same as they were when I joined.
What does your current role entail?
I look after the commercials for our sportsbook management products. We offer software and managed services to bookmakers, helping them automate their trading processes. I previously ran the sales team and now my primary focus is on servicing and recruiting large key accounts.
How has the sports-betting sector evolved over the years?
What has characterised the past 10 years is a shift from pre-match to in-play betting. It was first noticeable in football, with a shift from bookmakers offering 500 live games a month ten years ago, whereas now we are offering over 6,000 live games a month. Globally, there has been an infinite appetite for live betting content, especially within football. Lately, this shift has been replicated in tennis for live betting, and now basketball is following a similar path. We are offering over 30,000 live events for basketball alone this year.
For a technology company like Betgenius, we need to ensure we stay ahead of the curve and that we can offer our customers not only what they want now, but what they’re going to want in six months or a year’s time. That’s why we have been focusing on eSports for the past 12 months. We identified an opportunity to insert ourselves into the value chain and to help commercialise eSports and particularly live betting.
Why is eSports of such interest to bookmakers?
ESports has been an education for me over the last 12 months, having to understand the dynamics of the games, what the players want and the synergies with sports betting. I go in to present to CEOs and trading directors of some of the biggest firms globally and explain to them the ins and outs of live betting on eSports. When you mention that there are 6,000 live events per year and that the time of day these events are on are friendly for a UK and European betting audience, their ears prick up. What also interests bookmakers is that it’s a different and new demographic for them to target – this is why we have been able to really carve ourselves out a niche in getting to market first.
How would you describe a typical eSports player?
They are typically young guys, very technically proficient and with a fair amount of expendable cash. They not only compete, playing socially or competitively in these games against their peers and on the internet, but also watch it, consume it, buy merchandise and associate themselves with teams and brands. This creates passionate followings much like that of any other team sports. If you put an interesting betting proposition to them, for entertainment purposes, they are hopefully going to consume that.
What markets offer the best potential for eSports betting?
The eSports demographic is predominately US, China, Korea – none of which are very useful in the current betting environment.
But right across Europe, particularly Eastern Europe, and in Australia and South America there’s a fast-growing and committed group of fans who are creating record new betting turnover each and every month.
How should bookmakers approach an eSports offering?
Well first off, they need to get their product right – that means offering all of the pre-match and live betting that is available either via outsourcing to someone like Betgenius or by having experienced eSports traders. To be successful, it will not be enough for an operator to simply add eSports to their left-hand navigation and hope for the best.
Instead they need to engage with the specific requirements of an eSports enthusiast. This includes targeted recruitment from eSports sites and forums, and creating a destination environment that looks and feels ‘right’. Both Betway and Pinnacle have done good jobs of creating eSports ‘hubs’ with an aesthetic that is more akin to an eSports news site than a traditional bookmaker.
Finally, incorporating streaming will no doubt add great value. Unlike other sports, where a mature streaming for betting industry exists, eSports is much more fragmented and is an IP minefield with doubts over rights between publishers, event organisers and streaming sites such as Twitch.
How much of a challenge is it to get betting customers interested in eSports?
For people that don’t watch eSports, it’s not straightforward getting them to easily engage as they do with other betting sports. This is particularly true of MOBA (Multiplayer online battle arena) games such as League of Legends, where the bookmaker will need to invest in education to ensure conversion.
Other games are less challenging, such as CS:GO (Counter-Strike: Global Offensive) where you can quickly figure out what’s going on – you have two teams with a massive armoury of weapons trying to eliminate each other!
Last year you secured a partnership with Sky Bet – what other operator deals are you eyeing?
Our partnership with Sky Bet has gone really well. We also have deals in place with Betfair, Codere in Spain and Danske Spil in Denmark, with half a dozen or so other integrations ongoing. It’s going great, but it’s new and it’s volatile and it’s not just a case of sticking it up and hoping that it will work immediately. We need to work with our customers to make sure the front end is right and the integration works. But for the bookmakers it’s about being first to market.
So far around 90% of the revenue we have seen has come from in-play eSports betting.
How do you intend to drive the eSports market forward?
What we have got at the moment is unique, which is great for us. It’s now about rolling out our coverage more widely. We are looking at other eSports games and increasing our coverage to include them, and offering new market types. We have been on a world tour, speaking to the good and the great of bookmaking and lottery operators, and showing them our product.