Operating a sportsbook is a long-term engagement that requires a consistent approach to trading and risk management.
Sportsbooks run on small margins and uncontrollable factors that create volatile results on a day-to-day basis. To mitigate volatility, the best traders have an innate understanding of pricing and risk when it comes to setting lines and managing liabilities. They are driven to understand the intricacies of a sport so they can focus on the entire sport or season rather than overadjust on a game-to-game basis. A balanced, long-term approach to running a sportsbook must be upheld by those in the C-suite, too.
Indeed, for brick-and-mortar casinos seeing dollar signs in the post-PASPA world, trading is just one of the myriad complexities executives must untangle before even thinking about launching a wagering brand. Which technologies should you deploy to manage your customers and the betting lifecycle? How much technology and operations should be outsourced versus handled in house? Should you launch your own brand or partner with another B2C operator? The list of fundamental questions goes on.
In reality, the answers will be different for each operator depending on their ambitions, investment levels and the regulations in the state where they are based. And yet, at a deeper level, the approach must be the same for all. There are no quick wins when it comes to running a sportsbook. Decisions must be made with a long-term vision of how the business will operate and, crucially, how this will help them win market share from stiff—and often more established—competition.
A MOVEABLE FEAST
The anticipation of a legal U.S. sports betting market, even before PASPA was repealed, has seen many license holders form partnerships with sportsbook technology suppliers in rapid succession. Getting to market first isn’t a prerequisite for success but it’s fair to say we have witnessed several impressive launches in a very short space of time.
At this early stage, it’s almost impossible to predict which brands will win in the long run. We know sustainable market share will be obtained by those who invest in building a unique customer experience and product compared to the dozens of other options on the market. Much like running a brick-and-mortar casino, this can be done in many ways but boils down to having the flexibility to create your own, unique brand experience that leaves players wanting more. Customer loyalty, and profits, will soon follow.
This brings me back to my point about making decisions for the long term. As the U.S. market matures, operators will undoubtedly face very different challenges compared to the current, nascent market. The demands they make of their suppliers will subsequently evolve, making the choice of long-term technology partner critical.
At Betgenius, we’ve taken a view that flexibility will be one of these key demands. And this isn’t simply about allowing operators to take control of their front-end design and brand presence. Our technology and solutions have been built to give our partners options around the extent of operations and software they want to outsource versus running in house. So, depending on where you sit on the sportsbook technology and ambition spectrums, we are able to tailor a solution to match. We can provide you with real-time data only (to accurately set lines internally), an outsourced trading service (automating some or all of the odds creation, management and bet settlement process), or a full turnkey offering which handles all the inner workings of a sportsbook and player management.
Even more importantly, we give you the option of adapting our partnership over time, as your strategy changes.
For many brick-and-mortar casinos in states which have recently legalized sports betting, this is a daunting new world. The first instinct is to seek a partner which can take a sportsbook live in a cost-efficient and relatively risk-free manner. At this phase of the journey it may also make sense to outsource most of the key building blocks of your back-end operations, including odds making, risk and customer management.
(Side note: Major decisions must be made about brand. By partnering with a fellow B2C operator, the casino may simply be asked to provide their license as part of the agreement and lose out on brand presence.)
As the business scales, products mature and competition increases, defining your own technology and trading roadmap will become more important. Owning certain elements of your tech stack and product development could make all the difference, allowing you to remain adaptive, entrepreneurial and nimble. You need a flexible platform that allows innovation, whether it comes from proprietary development or third-party integration, to remain at your fingertips.
The same goes for wanting to take control of some aspects of sportsbook management, such as opting to trade certain sports internally in order to create a unique edge in the market and build a loyal following. Or taking control of your odds in real-time to tweak prices and bet limits on the events where your book racks up the biggest liabilities. We have seen many wagering brands succeed in mature European jurisdictions with this approach.
The idea of bringing technology and operation elements in-house may seem daunting now, but operators who have grand ambitions for their sportsbook brand must invest in their strengths and lean on others to do the rest.
A history of sports betting service
Sports data is the fuel that powers in-play betting. For 15 years Betgenius has been at the forefront of tech innovation in the sports betting sector. According to the company’s website, Betgenius is a partner to over 150 bookmakers in regulated markets around the world. From engaging live betting products and personalized marketing campaigns to a full turnkey solution, the company provides everything needed to run a world-class sportsbook—all in one place. Its subsidiaries include:
Betgenius’ game-changing software turns sports data into profits for hundreds of partners around the world. The company has gone from a cramped warehouse in London to a truly global operation, with offices in Los Angeles, Calif.; Vilnius, Lithuania; Sofia, Bulgaria; Tallinn, Estonia; Medellin, Colombia and Lausanne, Switzerland. Betgenius has a team of over 1,000 people in 16 locations, and is trusted by the biggest names in sports, like the NCAA, Major League Baseball, the English Premier League and the PGA TOUR.