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IN-DEPTH 10 May 2018
VAR: The next phase in sports betting?
Jonathon Hurst, Kambi’s Head of Live Football, looks at the introduction of video assistant referees and how this new phenomenon could impact the sports-betting industry as a whole
By Gambling Insider

How has the introduction of VAR been felt on the trading floor? What have been the most prominent issues?

After an initial feeling of scepticism and trepidation, we’re now treating it as an opportunity to challenge our operational capabilities. The most time consuming aspect has been to ensure we have cross-departmental alignment on trading and dealing with bets affected by the use of VAR. From a trading perspective, the difficulty lies in the fragmented roll out across different competitions.

For example, in Belgium they choose two matches per matchday to trial VAR. Similarly, in the FA Cup third round in England only one match was selected (and an additional two for the replays), while in Poland they decided to do a full VAR rollout midway through the season. It means the situation is forever changing and we have to be abreast of the changes in order to inform our traders and deal with any issues correctly.

How have you managed these challenges?

One of the first things we did was educate our traders and supervisors about VAR and its consequences. It’s a totally new aspect of football for everyone so it was important to close any knowledge gaps in our live trading team. We then worked closely with other departments to make sure that we are being as fair and transparent to the end users in the way that we deal with VAR, and that our operators are informed of our trading strategy.

We quickly noticed that the vast majority of VAR-related decision changes centred around the award of a goal and whether the scoring player was offside. When the goal is ruled out because the review identifies the player was offside, we respond in the same way as when a goal is chalked off following a late offside flag – the only difference being the time taken to rule the goal offside. In this sense, our multi-functioning live operations teams are experienced and prepared for this and can easily handle these cases in an efficient and uniformed way, which minimises any issues.

Does VAR leave less room for automated trading? Is a more manual approach required?

In some ways, yes. As mentioned, this is (and continues to be) a learning curve for multiple stakeholders both inside and outside the industry, including our live score providers. At times, in order to minimise bet offer suspension and reduce bet rejection, we have utilised our experienced trading team to override our integrated live score feeds. Additionally, we’ve been able to recognise the differences between VAR usage across leagues – the duration of VAR decisions is often longer in Italy than in Germany, for example – which informs our real time trading decisions with regard to bet offer suspension.

At Kambi, we know that optimal automation always removes manual tasks where a human touch adds no extra value, but we also believe in the extra value added by building and utilising an expert trading team - and this is a great example. Our strategy of combining the human and the automated means we are ideally placed to innovate in this area.

Have you been presented with any new challenges since its recent introduction to the UK?

Absolutely. By luck or judgement, the English FA have decided to rollout VAR in a way that aims to minimise the spectacle, thus preventing the referee or VAR becoming the star of the show. For this, I must applaud them – it’s certainly more efficient than the Italian system where the referee spends minutes starring at a giant monitor before making a decision – but it also creates operational difficulties for us.

For the early adopting leagues, a referee making a rectangular hand gesture was the understood universal signal indicating the use of VAR. This made it very easy for everybody, including our trading team, to know exactly what was happening. However, English referees instead subtly put their finger to their earpiece instead of continuing the previous implementation (in fact, in the first match using VAR in England – Brighton v Crystal Palace – the referee was receiving information through his earpiece from the video referee without making any signal at all!) making it almost impossible to spot.

Of course, we get added value through our official integrated trading feeds which usually give us a quick and clear indication of what is happening, but it would still be preferable for us if there was a consistent signal from the on pitch official to inform when the VAR is being used.

Will VAR result in a negative impact on the live user experience?

Our stance has always been to maximise user experience and VAR doesn’t change this. Instead of suspending every time a goal is scored or free kick is awarded, we adopt the approach of remaining live until it is clear that the referee is going to utilise VAR.

There’s still some debate over whether the trial of VAR has been a success but if in the long run it is implemented across all competitions, it’s likely that we would develop our trading tools to enable us to keep our live offering open even during a review, in a similar way that we currently stay open when a penalty is awarded in high profile matches.

Are there any benefits to VAR?

For football in general it should ensure that there are no longer huge miscarriages of justice. However, the rules are always open to interpretation (that’s one of the things we love about the sport!) so the introduction of VAR isn’t going to suddenly mean we have no talking points or controversy. For instance, in Serie A this season there’s been a perception that the bigger clubs get more decisions referred to VAR than the smaller clubs, and there was widespread criticism for its lack of use during possible penalty decisions in the Chelsea versus Norwich City FA Cup replay.

In our world, we see it as an opportunity to push the boundaries even further with regard to user experience and we’ve already got some interesting ideas of future bet offers specific to the use of VAR – and for these reasons we hope it is given the green light for the upcoming World Cup, which it looks like it will. Watch this space.

How do you think VAR will evolve in the coming years?

I think it’s vital in future developments of VAR that the impact on match going fans is considered at all stages. The recent FA Cup trial in the UK has drawn widespread criticism for leaving fans in the stadium at a loss to what is happening. It’s clear that the current implementation of VAR suits fans watching on TV or live streaming more than the fan in the stadium.

The success of major leagues like the Premier League has been built upon full stadiums and raucous atmospheres, to short-change fans in the stadium would be a huge risk for the future success of the product. This would be fairly easy to rectify if referees made a clear, universal hand gesture when using VAR and stadium screens and communication were fully utilised. We’re also in danger of disrupting the flow of the game too much, and as such I wouldn’t be surprised to see a time limit set for each decision to limit the damage.

From our perspective, this would help us to feed our sophisticated trading models with the correct time-related information in order to guarantee optimal odds calculation as well as minimising bet offer suspensions.

If we take the recent FA cup tie between Liverpool and West Bromwich Albion as an example, our trading team had to be on point with the estimated first half injury time to ensure our wide-ranging portfolio of interval and first half bet offers were not only priced correctly, but also available for end users to place bets right until the end of the first half.

In this instance, the first half lasted 50 minutes but it could easily have been 55. This is tricky but exciting for us, testing our trading and model capabilities to the full.

How do you think the industry will change in the face of VAR?

I’m sure we’re not the only ones thinking about ways to fully leverage our in-play visualisation to compliment VAR. As we know, strong visualisation and live statistics are a key driver of in-play turnover and as such it’s important to keep the end user informed of exactly what’s happening in their chosen events. Nothing frustrates more than not being able to place a bet due to a suspended live offer, especially if the reason for the suspension is unclear, so this will be a big focus area for operators who value a strong user experience.

At Kambi we always think match events that create complex pricing computations and test our technology supply chain are the same match events that cause the most excitement and interest for the end user. This is why we offer current minute instant offers on throw-ins and ‘Next Occurrence’, and keep all our bet offers when a penalty is awarded in high-profile matches. I have particular interest in the prospect of developing improved player personalisation through a combination of player profiling and AI to push the most relevant bet offers on matches where VAR is being used – to ensure maximum exposure for the betting possibilities in these instances.
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IN-DEPTH 4 September 2019
Virtual reality: Creating next-gen experiences for players

Singular CEO George Shamugia discusses a new revenue stream for casino operators

The competition in online gaming is intensifying, with players becoming more and more demanding. In some markets, single-customer acquisition costs can reach up to €400 ($440) alongside growing churn rates. Furthermore, the online gaming sector struggles to attract one of the most lucrative groups of players – millennials. The experience provided by casinos no longer appeals to the younger generation.

On  the other hand, the video gaming industry perfectly understands the needs of millennials and by introducing elements of luck in their games offers the best of both worlds. With the launch of loot box systems and Grand Theft Auto’s in-game casino, we have seen their first successful steps in targeting the online gaming sector. GTA V online, with 33 million active players, recently opened an in-game casino, where players gamble real money on games such as poker, roulette, slots, etc. As a result, churn users returned and GTA Online reached the highest number of active players since its launch in 2013.

The online gaming industry has almost fully utilised the potential of the mobile medium. The time has come to look for new, innovative ways of delivering a next-gen experience to customers.

The potential of VR

Could the next big thing for online gaming be a fully fledged virtual reality (VR) casino delivering an immersive experience and limitless new opportunities?

Although not widely adopted yet, VR has a sizable number of customers. Analysts predict it’s poised for explosive growth to become mainstream in about five years. According to market intelligence firms, the VR market will be worth $117bn by 2022, and according to Juniper Research bets made through VR will reach $520 billion by 2021. Upcoming 5G mobile network technology will propel VR’s mass adoption by allowing the development of fully portable untethered and affordable VR headsets.

Different level of social interaction

The captivating nature of gambling comes from its social aspect. Unfortunately, personal interaction is widely missing from online gambling sites. VR technology creates multiple opportunities to bring back and even enhance that social moment. The ability to connect with other players is one of the main reasons behind Fortnite’s popularity. This form of co-experience is the next generation of entertainment. Research conducted by Facebook has found participants spend more time on VR compared to any other medium. This directly translates into increased profits for casinos.

Pokerstars has made efforts in this direction by implementing Voice UI. Instead of using hand controllers to make a call, pass, or raise, players give voice commands.

Another opportunity for bringing in the social element are the players’ avatars. They enable players to build their identity reflected in the avatars’ appearance, but also the avatar's social, competitive and community status. For instance, players are willing to pay real money for virtual drinks at the bar. Operators can offer these social touchpoints for free to VIP customers as an act of appreciation.

VR also brings a new dimension to customer support. Customer support can also be represented with avatars to assist the player in person. The social moment increases the LTV of players and contributes towards lower churn rates.

Rethinking game design

VR is a way more capable medium than a 2D mobile or desktop screen. Instead of copying the existing online experience, games must be redesigned from the ground up for a competitive advantage with VR. For example, a VR slot game can become fully immersive by teleporting the user into the slots’ world of Ancient Egypt. Next, enrich the experience with high-fidelity graphics, realistic spatial sounds and animations. When betting on virtual race cars, the user can be teleported inside the car he/she made a bet on and experience the race firsthand.

New revenue streams

VR casino lobbies create new revenue stream opportunities: ad placement of brands on the venue walls, company logos decorating the bar etc. This kind of branding is not intrusive in the VR space and feels natural from the user's perspective. VR also gives users the ability to change venues from a Las Vegas casino today, to Macau or even Mars casino, the very next day. The dynamic and diverse experience increases retention rates.

The majority of profits for online gaming operators come from their high-roller players. Although they represent a small subset of active players, an operator can launch a separate VR casino brand for them. Providing exclusive VR gaming experiences to high rollers/VIPs, the operator can minimise churn and maximise VR efforts for these player demographics.

The catch with VR is to focus on quality, rather than scale. The target audience might be limited yet, once these players experience it, they will become ambassadors for your offering.

Surely, the opportunities and possibilities offered by the VR medium truly exceed anything offered by mobile and desktop. VR is a new frontier not just for gaming but for every industry, and it’s exciting to see where it takes the industry and what kind of innovation it brings upon us.

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