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How is the UK sport betting market becoming more digital?
Hi! Thanks for asking Wonder to look into how the UK sports betting market is becoming more digital.
The short answer is that mobile betting and in-play are currently driving the digitalisation of sports betting, among other factors. The most useful sources I found in my research were from SBC News and market research reports.
Below you will find a deep dive into my findings.
MOVE TO DIGITAL
UK betting has been moving online for several years (90% rise from 2008-2012). 2015 saw a further 11% decline in bingo and arcade (i.e., physical) betting. High street betting shop presence declined by 1.9%. Online sports betting increased 14%. Esports and fantasy sports are showing substantial growth, the biggest sector growth in online betting. Unfortunately, both esports and virtual sport offerings are still in their infancy stages, so no hard data specifically for the UK is available yet. However, Betway have stated that esports regularly feature in their top ten sports for daily turnover.
The top 3 operators in the digital betting environment are Paddy Power Betfair, William Hill and Bet365.
MOBILE BETTING
In 2014, Paddy Power predicted that 90% of betting growth would be seen via mobile. A market research report by YStats predicts that mobile betting is expected to hold a 40% total online market share by 2018. Globally, the number of people expected to engage in mobile betting could reach 100 million. The average mobile gambling spend per users is expected to exponentially rocket from just over €1 in 2010 to over €17 by the end of next year.
In another example, an incredible 4.3% of all iPhone users have at least one sports betting app on their phone. Considering only 31% of the public states they have gambled online, this is a good portion. As early as 2013, William Hill already saw 40% of sportsbook stakes come in via mobile. 50% of Pokerstar's new registrations in 2014 are also through mobile channels.
IN-PLAY BETTING
In-play betting is not only increasing substantially with the rise of algorithms able to automatically set odds, but tools like 'cash out' and 'edit bet' are actually letting the punters feel like they have more control. From the bookies' back end, they are increasingly employing the services of managed trading services, to help them manage liabilities, fixtures and odds. These means even smaller bookies can grow bigger, as once automated bots and systems are in place, there is little to no extra manpower needed for a sports bookie to expand its offerings and markets.
One of the sports driving in-play betting is tennis, a fast-moving game with a plethora of markets. Previous to internet streaming technology, only a small number of markets were available via physical shops on major tournaments like Wimbledon. Now tennis is second only to football in terms of the volume of sports bets, largely driven by the in-play market.
Additionally, with the advent of big data and predictive analytics, high-tech bookmakers have the potential to offer a targeted in-play experience, leading to an increase in bettor engagement. This more "human link" between the gamer and operator is what can help bookmakers in this increasingly competitive environment.
WILLIAM HILL IN THE US & DIGITALISATION
William Hill is among stakeholders pushing for federal legalisation of online sports betting in the US. Following a patent filed by Microsoft, interest groups are lobbying Congress for a full review of federal gambling laws. Among issues at stake are high-tech options like "robots fueled by dynamic algorithms, motion-tracking cameras and microchips capable of ingesting troves of real-time data from athletes' bodies", which are predicted to one day dominate high stake in-play betting.
William Hill are eager to get in early for a slice of the American market, given that unusual names like Sony, Microsoft and even Facebook are already considered major factors. Facebook has 'dominated' digital sports betting in the US through its use of virtual currency, a legal form of betting.
Additionally, exchanges are another way in which digitalisation of betting is being greatly influenced. Already vastly popular in the UK (Betfair and Smarkets being the largest), Betfair has dabbled in the New Jersey market. An analyst from Microsoft predicts exchanges and other peer-to-peer betting as the preferred form of sports gambling in the future. However, William Hill's US CEO refutes this, calling traditional sports betting as the mass-market product.
OTHER POTENTIAL AVENUES
Research has found a few other possibilities for the future of sports digitalisation and sporting betting.
- Big data and analytics increasingly automated from the back-end, further expanding betting markets
- Big data and predictive analytics also poised to help operators increase their wallet share by increasing customer loyalty and engagement
- 'Mutual funds' for sports betting (happening in the US, but there is the potential for a UK equivalent)
CONCLUSION
To wrap it up, the increasing digitalisation of sports betting in the UK is being driven by mobile device penetration, in-play betting and the role of big data/analytics not only increasing customer relationships but the offerings of bookmakers.
I hope this is helpful. Please feel free to ask Wonder if you have any more questions!