£5 – How much is it to you?

How much is £5 ($5.61) worth to a bettor?

I don’t think £5 is worth a huge amount to a bettor, but it all depends on what one’s weekly limit is really. I know there’s a lot of bettors out there, and the psyche of each bettor varies dramatically across the UK. But there are those who say: “ok, I’m prepared to spend x, this is my entertainment amount which I’m going to spend over the weekend on my acca or whatever my ritual is.”

I think when you delve in to what Sky Bet has done by boosting the Sky Bet Club entry amount from £25 to £30; of course, one can say we live in an inflationary environment. And on the other hand, we are in a cost-of-living crisis, so is this a responsible thing for Sky Bet to have done? From a consumer’s perspective, there’ll be those out there that say: “why have you done this? I’ve been doing this for years; I’ve been loyal to you.” The club is a great retention tool, because if a customer spends £25 a week on football or horseracing, that’s a sticking customer. By changing the goalposts at this stage, you’ve got to ask what the real value is in doing so. What’s going to be the cost to Sky Bet, its units and revenue over the next year? The proof will be in the cake when they come to eat it, and we’ll find out at a later date.

So will customers stick with Sky Bet, or will they think betting an extra £5 will prompt them to spend with another operator instead?

In this day and age of responsible gambling, the question to ask is, is it responsible to tell your punters to bet another £5 to get a free bet? Is that inducement? It does open a bigger can of worms. Another interesting point to consider is the deposit limit settings of the mobile operator. What are the deposit limit rates, how do the settings ratchet up? I would hazard a guess that the IT department of Flutter would look at this. The current deposit limits on Sky Bet go up in £25, so £25 and £50. So your limit would have to rise to £50 in order to get the Sky Bet Club sign up. I think Flutter's IT teams would be looking to change this deposit limit to clips of £5, and give punters more freedom in the limits they set. You should empower the consumer and put the choice in their hands, so they are more in control of what they spend and how much they are going to bet. I think that’s fair and I think it will happen.

I’m sure the ramifications of Sky Bet Club’s move are already out there and people are considering the permutations of it. I’m sure Flutter is already wondering how soundly thought through this idea was. Was it a bean counter coming up with this idea saying this could save us x? Perhaps they were not putting themselves in the shoes of the consumer to pre-empt what they would say or do. I’m sure Flutter will keep this at £30, but I’m sure what they’ll then do is change deposit limit settings on Sky Bet. I’m sure that will happen soon. I would hazard that Flutter did not think of the repercussions, that their Sky Bet Club actions would make people extend their deposit limit from £25 to £50. I think there was some oversight, so now we’ll see how they clear this up.

Sky Bet is, arguably, now billed as the number one app on the market. Is it now at a stage where it’s so popular, but makes less money because of all the Super Boosts and free bets that it offers? Could it become a loss leader for Flutter?

I would hope it wouldn’t become a loss leader. If you look at Flutter and all the amazing assets it has, you’d hope that wouldn’t become the case. Because I think Sky Bet is very good at pinpointing sharp players. Anybody that is sharp, any sportsbook or bookie, will get them and they won’t last very long at all. With businesses now, it’s not gladiatorial like it was in the old days. Operators are very well run with intelligent people at the helm. They may not always listen to their customers but they do listen to their shareholders. So they find the means to get the revenue, to pay the dividends to shareholders accordingly. It’s an interesting time, but I think large-scale operators are all very similar in this regard – and I would doubt we’ll ever see Sky Bet as a loss leader. It’s too big a brand and has the seniority of being part of Sky. It has a lot of loyalty, and despite the Sky Bet Club issue we discussed earlier, there will still be a hell of a lot of people who will remain loyal to it.

Swinging back to the Sky Bet Club in, say, six months or so, do you think affiliates will look back and see that punters have just deposited that extra £5, and Sky Bet has gotten away with raising it?

I would hazard yes. I think people may just deposit that bit more, but I’m sure the operator’s deposit limits will be changed. I think most bettors will facilitate this change and eek out that extra fiver. It’s human nature, isn’t it? If you can see that tantalising offer of a free gift that will cost you an extra £5 just to get that back, yeah, I think people will likely do it. But it would be interesting to analyse the percentage of those that hadn’t done accas and Build-a-Bets, who would shift there. This is because the threshold for these bets has been reduced by £5, to £20 in the Sky Bet Club. But these are more volatile betting markets. So it would be interesting to see how many who would place a bet on say, a Super Boost, would then switch to a free £5 acca having bet only £20 to gain access to the free bet. From an operator’s standpoint, people are far less likely to win on the acca’s, so potentially the new Sky Bet Club rules are a means to get more betting traffic on acca’s and Build-A-Bet’s.

Looking at the UK landscape and its big players Sky Bet and bet365, an interesting newcomer is Dazn Bet. They have the workings of a potentially big competitor, but is it hard to stand out when its offering is ultimately the same as its established competitors?

I think it’s great when you have an experienced and charismatic CEO on board at Dazn (its parent company), Shay Segev, who used to be CEO of Entain. There’s a lot of money that has gone in to create the Dazn brand. While I understand the rationale of it, if you look at the success of Sky Bet – I think it sees a window in an age where people have multiple subscriptions. For sports, it’s clear that Dazn is hoping it can cross-sell to its audience, and it will be very interesting to see what happens. As I say, Dazn has a great CEO, with experience and nous to make it happen. But I suppose the issue for Dazn is what is going to be its wow factor? How will it differentiate from the rest of the field? I guess we’ll have to wait and see on that.