It’s been nearly 60 years since anyone has been able to write an article ahead of England playing in a football World Cup Final, but after dispatching Australia in the semis, it’s now only Spain that stands between the Lionesses and a double achievement of winning both the Euro Championship and World Cup.
Given that England already have one recent major tournament victory under their belts and - according to FIFA - are ranked higher than Spain, you’d perhaps expect England to start as favourites to win the match.
However, Spain started out as tournament favourites and, according to the opening industry prices, they are still being chalked up as marginally more likely to lift the trophy come Sunday.
Relevant data points (such as expected goals, player ratings, etc), used to try and predict match outcomes by operators (or their supply chain) are scarcer for women’s football than they are for men’s.
In circumstances such as this, it’s often the case that most suppliers have no meaningful way of knowing what the ‘true’ price should be and, as a result, simply copy the prevailing market price.
"Relevant data points are scarcer for women’s football than they are for men’s"
Of course, it doesn’t matter if the price you display is ‘wrong,’ if you don’t have any obligation to pay it. Increasingly over the last decade and a half, the business model for most operators has been just this.
Whereas once price differentiation and knowledge were at the heart of a sports betting operation, nowadays the prices of even major operators are supplied through a handful of B2B suppliers that have no experience with proprietary pricing or running risk on their own books.
In regulated markets, online growth has come through channel shifts from retail, driven by both the advent of new products, such as in-play, and by higher margin inventions, such as same-game parlays. Often, it has been fuelled by newly regulating territories offering the potential promise of ‘easy money.’
Sports betting is often run as an acquisition funnel to casinos. As a result, there’s little thought given to pricing quality, having long since been replaced by a marketing ‘land grab’ driven by bonuses and promotions, while backed by a tendency to throw out any skilled bettors that don’t show themselves to be recreational in nature.
Rising tides lift all ships. Against the backdrop of looser regulation and cheaper costs of revenue that characterised the industry 10 years ago, there was a perception that this way of treating betting odds as ‘content,’ was sufficient to drive long-term growth.
"The answers to the biggest questions often lie in the smallest things"
The problem that many operators now have is the realisation that the tide has gone out. Macroeconomic conditions are tougher, the internal business model they are following is demonstrably failing and there is a lack of options available for sportsbooks to pivot due to a fungible supply chain.
Seemingly, every week that passes sees another operator pulling back from their exposure in the US, due to their inability to make the ‘marketing led’ model pay, especially when there is no product differentiation to set them apart.
Average pricing, alongside a lack of scale, means all but the very largest operators can no longer survive. Even the largest operators in the UK are finding growth increasingly hard to come by in the face of stringent affordability checks.
These problems may seem a long way removed from knowing whether England or Spain should be favourites to lift the World Cup, but the answers to the biggest questions often lie in the smallest things.
This weekend will see operators make price changes based on ‘market moves’ with no knowledge as to whether the moves are worth tracking or not. There is very little ability in the industry to decipher whether there is information contained in a customer’s bet that should be regarded as a ‘signal.’
In markets with little historic data to inform pricing, or with very ‘thin’ liquidity to form the market, it is the information that you can extract from a customer’s behaviour that is extremely valuable in optimising your price.
"As an operator, if you’re happy to lay in larger size against a more skilled customer base because you have much greater price certainty then you are utilising a weapon that your competition can’t match"
Similarly, having that information available, and known only to you, in a market that is liquid – where a small difference in price can generate large additional volumes – becomes a method of taking meaningful market share.
As an operator, if you’re happy to lay in larger size against a more skilled customer base because you have much greater price certainty – not just in singles but across multiples and same-game parlays too – then you are utilising a weapon that your competition can’t match.
At 10star, we firmly believe utilising a business model that can access sharp global liquidity, adjust prices based on the specific information your customers give you and then optimise your position in your local market based on your proprietary information, is the only long-term business model that will keep many operators afloat in increasingly turbulent times.
