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NEWS 6 August 2019

Racing Post and partners target younger audience with AllSported solution

By Matthew Enderby

Gambling Insider spoke with Racing Post B2B Director Eugene Delaney, Racing Post Chief Revenue Officer Mike Griffin, CEO of Banach Technologies Mark Hughes and CCO at TXOdds Thomas McGrath about the launch of AllSported, a new horseracing trading solution.

What makes AllSported stand out in the market?

MG: I think it’s a combination of bringing everything the customer needs to them in one simple solution. But most importantly, it’s about giving flexibility to the customer in terms of trading solution and really our USP is about us creating the trading solution bookmakers want rather than the ones they have to take. There’s flexibility in the model and a full solution in provision from AllSported is key.

ED: Part of that too is not trying to do everything ourselves. What we’ve done is brought three businesses together, so the sum of the parts will be greater than the individuals.  

How will it improve the betting experience for a player?

TM: We all have expertise in different fields. For us it was an opportunity to put a group together and a no-brainer to bring in the automation solution as well, for a product that has historically been very cost associated and hands on from a trader perspective.

MH: For years there’s been very little innovation in horseracing and we’ve got a great opportunity now to offer something new and give a better experience than in the last decade. Hopefully it will bring horseracing back to the forefront of people’s minds.

Do you think this development is necessary in the horseracing industry?

MH: Yes, I think customers have been offered the same types of markets for years; winner each way, betting without and some place markets. Nobody has pushed the boundaries on it too much. Traditional horseracing punters favoured that type of betting but the newer, younger punters are looking for a quicker type of market. So over the next few years we want to start offering some interesting products.

Was that part of the thinking behind forming AllSported, to target a younger demographic?

MG: Yeah I think it’s new and existing customers. It’s about expanding the horizons and the opportunities within the marketplace. Again it comes back to the made-to-measure solutions for bookmakers; the flexibility in the model here allows freedom.

What is the reasoning behind forming this joint venture? I believe it is the first of its nature for the Racing Post.

MG: Yes it is the first time. The key for us was we thought the marketplace had a need for it but it was about providing a tier-one level solution and to do that we had to bring in the best in the marketplace. The way we saw it was: if we’re not going to be the best, there’s no point in doing it. We needed two key partners for that: TX and Banach.

ED: We wanted to make the journey easier for customers so obviously we have experience of giving content to customers; TX have the integration experience and Banach obviously with building models. We wanted to make that journey especially easier for new entrants to racing and make racing available to sportsbooks that don’t have it.

Are there any specific markets this will be used for or will it be across global horseracing?

TM: It will cover global horseracing. Eventually we will look to add greyhound racing as well, but for now it will focus on horseracing from across the world.

Mark, what are the more popular sports on your existing platforms?

MH: At the moment football is always really popular worldwide; it’s quite a big market and especially next year with the Euros coming up it’s going to be an interesting time for new markets in football. Also for us, the American sports are quite compelling, especially with PASPA being overturned and the different developments going on over there.

How does horseracing rank among those?

MH: Very highly; in the UK and Ireland horseracing has always been a huge part of the culture when it comes to sports betting. As Thomas alluded to, with an international product I can really see horseracing coming back to life in other parts of the world and hopefully grow in market share as well.

Is this the first time you are offering horseracing?

MH: As a company it is the first time we have launched horseracing but we’ve worked as a team for over a decade at Paddy Power. We worked extensively on horseracing there.

MG: Horseracing is actually one of the hardest sports to price and model. That’s why we have taken this route to market and we think there is a real need in the market for it.

What makes it so hard to price and model?

MG: I’d say there are a several variables and nuances in racing. We haven’t gone into detail on the technology here but it’s the algorithms and backend driving this that makes it so unique.

MH: With football teams there is a lot of public information out there, easily accessed. You understand the teams’ form, you get to see a lot of activity week-to-week and there’s a lot of data behind it. In horseracing there are so many variables; ground, weather and you’re talking about animals that react very differently to humans when they are racing. So that produces a large degree of variability in their performances. These all create complexity when you are trying to model the sport.

Also, a lot of the information is private. You can only get data on how the horse is running from the stable. So it’s then up to the algorithms to pick up betting patterns. They look for which horses are fancied and which are more likely to win the race. It then reacts in real time to that type of information.

Can you give more detail on how the algorithms work?

MH: We look at historical variables on how a horse is running; how they did in their previous races, what type of ground they ran on, the jockey, the trainer and how other horses in that trainer’s yard are performing. All these different things we use as an indicator of how likely the horse is to win the race. We then couple that with market information; what the bookmakers are thinking, the price of the horse to win, what’s happening with the exchange and various other indicators.

The last thing you would look at is indicators from betting patterns. Once you publish your first price for a race, different customers will start betting on different horses. Obviously it’s then up to the algorithm to decide which customers have valuable information in their bets. It will then follow that information and try to improve prices as the day goes on.

It’s a lot more difficult in horseracing than other sports to model those flows and keep your book profitable as the day progresses.  

Thomas, is it one of TX’s core products that is incorporated into AllSported or is it something different?

TM: We have horseracing as a sport we would offer to normal bookmakers and B2B partners, but this product is the next level for us. We’ve never been involved with anything like this before. At the core we are still collecting feeds, aggregating and distributing them, but this is the first time for us we will be part of the end-to-end solution.

Do you have anything to add on the launch?

ED: From our side, Racing Post obviously has a lot of history but the key for us in partnering with companies like Banach and TX is we’re transforming into a digital data-led organisation. We’re quite open to working with partners that have the skills there.

RELATED TAGS: Online | Sports Betting | Industry
DISCUSS THIS ARTICLE
IN-DEPTH 16 August 2019
Roundtable: David vs Goliath – Can startups really disrupt the industry?

(AL) Alexander Levchenko – CEO, Evoplay Entertainment

Alexander Levchenko is CEO of innovative game development studio Evoplay Entertainment. He has overseen the rapid expansion of the company since it was founded in early 2017 with the vision of revolutionising the player experience.

(RL) Ruben Loeches – CMO, R Franco

Rubén Loeches is CMO at R. Franco Group, Spain’s most established multinational gaming supplier and solutions provider. With over 10 years working in the gambling, betting and online gaming industries, he is skilled in operations management and marketing strategy.

(JB) Julian Buhagiar – Co-Founder, RB Capital:

Julian Buhagiar is an investor, CEO & board director to multiple ventures in gaming, fintech & media markets. He has lead investments, M & As and exits to date in excess of $370m.

(DM) Dominic Mansour – CEO, Bragg Gaming Group:

Dominic Mansour has an extensive background of nearly 20 years in the gaming and lottery industry. He has a deep understanding of the lottery secto,r having been CEO at the UK-based Health Lottery, as well as building bingos.com from scratch, which he sold to NetPlay TV plc.

What does it take for a startup to make waves in gaming?

DM: On the one hand, it’s a bit like brand marketing; you build an identity, a reputation and a strategy. When you know what you stand for, you then do your best to get heard. That doesn’t necessarily require a TV commercial but ensuring whatever you do stands out from the crowd. Then you have to get out there and talk to people about it. 

AL: Being better than the competition is no longer enough; if you’re small, new and want to make a difference – you have to turn the industry on its head. Those looking to make waves need to come up with a new concept or a ground-breaking solution. Take Elon Musk, he didn’t found Tesla to improve the existing electric cars on the market, he founded it to create the industry’s first mass-market electric sports car. It’s the same for online gaming; if you want to make waves as a startup, you have to bring something revolutionary to the table.

JB: Unique IP is key, particularly in emerging (non-EU) markets. As does the ability to release products on time, with minimal downtime and/or turnaround time when issues inevitably occur. A good salesforce capable of rapidly striking partnerships with the right players is vital, as is not getting bogged down too early on in legal, operational and admin red tape.

How easy it for startups to bring their ideas to life? How do they attract capital?

AL: It depends on the people and ideas behind the startup. Of course – the wave of ‘unicorns’ is not what it used to be. Some time ago the hype was a lot greater in terms of investing in startups, but that’s changed now. Investors now want more detail – and even more importantly, to evaluate whether the startup has the capacity (as well as the vision) to solve the problem it set out to address. That’s not to say investors are no longer interested in startups – they certainly are – but now more than ever, it’s important for startups to understand their audience as well as dreaming big.

JB: To get to market quickly, you need a great but small, team. If slots or sportsbook, the mathematical engine and UX/UI are crucial. Having a lean, agile dev team that can rapidly turn wire framing and mathematical logic into product is essential. Paying more for the right team is sometimes necessary, especially when good resources are scarce (here’s looking at you, Malta and Gibraltar).

Building capital is a different beast altogether. You won’t be able to secure any funding until you have a working proof of concept and, even then, capital is likely to be drip fed. Be prepared to get a family and friends round early on to deliver a ‘kick-ass’ demo, then start looking at early-stage VCs that specialise in growth-stage assets.

How do you react when you see startups coming in with their plan for disruption?

RL: We welcome the innovation and fresh thinking startups bring. This is particularly the case in Latin America, with a market still in its infancy. One area we’d especially like to see startups making waves is in the slot development sector. Latin America is a young market that needs local innovation suited to its unique conditions – especially in regard to mobile gaming.

Operators eyeing the market have Europe‐focused core products, which creates a struggle to work to the requirements of players and regulators. To succeed there, it has become more important than ever to work with those with a knowhow of the local area to adapt products and games to besuitable from the off; we welcome the chance for local talent to develop and grow.

Do you think it’s easier for established companies to innovate and establish new ideas? 

AL: From a financial perspective, yes. It is without a doubt easier for incumbent companies to establish a pipeline of innovation via their R & D departments, as well as having the tools to hand for data gathering and analysis.

But it stops there. Startups hold court in every other way. Not only are they flexible, they can easily switch from one idea to another, change strategy instantly as the market demands and easily move team members around. Established companies know this – and this is why we’re seeing an emerging trend for established companies to acquire small, innovative online gaming start-ups. They have the right resources and unique ideas, as well as the ability to bring a fresh approach to businesses’ thinking.

RL: For me, it’s always going to be established companies. Only with the resources, industry experience and know‐how can a company apply technology and services that truly make a difference. Of course there are exceptions. But when it comes to providing a platform that can be approved by regulators across multiple markets – as well as suiting an operators’ multiple jurisdictions – it is simply impossible for a couple of young bright minds with a few million behind them to get this done.

DM: I actually think it’s harder for established companies. It’s key to differentiate between having a good idea and executing one. That’s where the big corporates struggle most. They’re full of amazing people with all sorts of great ideas but getting them through systems and processes is nearly impossible.

Is it essential to patent-protect innovative products?

AL: It’s a very interesting subject. If we take IT for example – patents can actually become a block to the evolutionary process within the industry. Of course, getting a patent future proofs yourself from the competition copying your concept but, having said that, if you’re looking to protect yourself from someone more creative, smarter and agile, you’ve probably lost the battle already!

In our industry everything is moving faster and research takes less time than the development itself. No matter how good you are at copy pasting, you can’t copy Google or Netflix. The most important thing is not the tech itself but rather its ‘use-case’ – or in other words, does it solve what it’s meant to solve? Competition is healthy and the key to innovation. If you spend your whole time looking behind you, you’ll never be able move forwards.

JB: Tricky question, and one that depends on what and where you launch this IP. It can be difficult to patent mathematical engines and logic, mostly because they’re re-treading prior art. Branding, artwork and UX is more important and can easily be copied, but the territories you launch will determine how protectable your IP will be once patented. US/EU/Japan is easy but expensive to protect in. But China/South East Asia is a nightmare to cover adequately. Specialised patent lawyers with experience in software, and ideally gaming, can help you better.

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