The myth of in-play betting
Everyone thinks they understand in-play, which, frankly, should be your first warning...
There was a lot to talk about again this week, from DK and Flutter results to NY licences and stock collapses. But once again something specific kept rattling around my brain.
In-play.
I’m not sure there has been a pitch deck in the last 12 months that hasn’t contained the “fact” that in-play is 75% of sports betting now. In some it’s even gone as high as 80% using the tried and tested “take the consensus number and add a bit” approach.
There is just one, small, problem with this.
It’s not true.
At least it isn’t true in any of the major regulated markets that exist. The real number is somewhere around 55-60% of revenues and only bet365, which has the market leading offering, is in that 75%+ region.
But 60% is still good right? Well yes. And it will inevitably be 75% in time yes? Well…maybe? But what is the revolution that is going to take place that will make that happen? Oh god, you’re going to say micro markets aren’t you…
Right so let’s get that one out of the way early.
In-play myth #1
Micro markets will revolutionise in-play!
I don't know. Maybe they will. Enough smart people seem to be convinced. You do need someone to solve the rather large latency issue first though. The idea you can bet on a 30 second interval event like next serve or pitch when your stream is 90 seconds behind live is pretty wild.
But assuming that all gets sorted and we create this wonderfully slick, fast immersive betting experience is it even what people want to bet on? And what, really, are you creating here? Is it fan engagement or is it turning pro sports into a slot game? The last step on the ladder of the evolution of in-play betting.
The idea of anyone placing a bet on every single down of an NFL game sounds borderline psychotic. Someone sat in a dark room jabbing at a mobile phone trying to get their 207th bet on the next play being a run of over 5 yards is a when the fun stops, stop moment isn’t it?
I did run this past an industry expert and he told me this:
The most common style of recreational micro markets live behaviour I see are high priced possibilities bet repeatedly throughout a game for low stakes. such as a home run on a pitch or an interception. Plenty of recreational players enjoy that kind of action for a dollar a time.
That’s not to say micro markets have to fit this mould, of course. There is an argument they can be an even more “thoughtful” product than regular in-play, but it involves a fair bit of squinting and wishful thinking. And it links in with one of the other big myths of in-play.
In-play myth #2
It’s all about fan engagement during big games!
This is partially true, but it obscures the reality of what generates an awful lot of revenue. In-play is about creating products that cater to the...shall we say less discerning bettor? And the best in-play betting sports are often those where the bettors are least engaged with the game.
I’m not sure exactly how many fans of ITF tennis there are but I would bet it was a fair chunk less than those betting on it. No that doesn't mean gambling addicts. But it does mean players who aren't as bothered by the sport as they are by being able to bet on it immediately at a time when they are able to do so.
This is why table tennis betting is so huge. It's not people are betting on rigged games or that people really love table tennis, it's just...there. It's always available. And people gave it a spin during lockdown and keep coming back for more.
In-play hits differently. It requires faster decision making (generally), gives faster settlement (generally) and can lead to more impulsive decisions than pre-match betting. There are markets that exist in-play that would attract pennies if offered pre-match, such as in-play corners in soccer.
So it’s just mindless button mashing?
Well no…but, and this is pretty crucial, it CAN be fairly mindless button smashing. And that can be fun. Gambling can be mindless and fun. I really feel like we’re yet to see any operator really crack the next evolution of this. Or, frankly, consider the safer gambling implications of this aspect of the product1.
The big decision: Strategic vs casual
On the flip side the dynamic nature of the markets allows for more strategic betting. Trading becomes a real option in-play in a way it rarely is pre-match for the average bettor. There are decisions that don’t really exist pre-match such as cash out due to the massively increased volatility of pricing that happens once the game kicks-off.
These differences are more than just cosmetic or incidental. They can, or perhaps should, change the nature of the gambling experience. What they can create are two almost dissonant gameplay styles - strategic and casual. And it seems implausible for many operators to do both well at the same time.
There is a tension here that feels unresolvable. Some brands lean heavily into one or the other, but what is most curious to me are the operators who are selling casual but packaging it as strategic or vice versa. It smacks of an industry that doesn’t quite understand what it is selling.
It certainly doesn’t always feel like an industry that understands the modern gaming world. Man are some in-play user interfaces ugly. So so very ugly. Making a more visually appealing UI, or changing the way users interact and place in-play bets feels like on ongoing missed opportunity to me.
Yes the product works well now for the players you have but what about the ones that come in the future? What about…and here it comes finally…those in the US market?
Why US in-play is particularly interesting
It’s not at all clear what the key in-play sports will be
In Europe it’s pretty obvious what the in-play sports are. Soccer and tennis. There are a bunch of other sports that make up a not inconsiderable amount of revenues, including table tennis, but those are the clear big two. One is the main sport everyone watches and the other is something that could almost have been created for in-play.
In the US it’s really not that straightforward. The US hasn’t, really, had its tennis yet. Table tennis scratches at the surface a little in some states, but there is no obvious ITF comparison as yet. There are suggestions soccer is starting to fill that role at some books but we could see something else come in and take over.
I asked the question on Twitter as to what percentage of in-play betting would be filled by the NFL, NBA and college football and 38% felt it would be more than 75%. This is not impossible, but it would be different to any other regulated sports betting market that exists and a smidge above 50% feels more likely.
But what makes up that other 50% is much harder to define.
There is a LOT of sports on TV
In a recent call Pointsbet said in-play would be their route to gaining that magical 10% of the US sports betting market. And this was an interesting take because along with improving the product, acceptance times and ramping up markets on offer they had this to say.
We believe that the ability to provide integration of odds and unique betting content into live broadcast will set operators apart over the medium to long term.
The idea of sports coverage being saturated with in-play betting odds, and more neatly integrated betting options is something that has seduced investors in the US sports betting market since the beginning. It’s never really worked anywhere else, but few nations have the sheer breadth and depth of major sports coverage in the US.
Because the US is yet to have its “tennis” moment for in-play, a sport that takes off near purely as a betting medium, there is no reason this couldn’t be one of the existing major sports.
There are a lot of “traders” already losing money hand over fist
The US market, unlike most in Europe, is saturated with day traders, stock market “experts” and people who regularly optimise how quickly they can give their hard earned money to hedge funds. Flipping to trading sports that you at least feel like you understand rather than stocks that you definitely don’t doesn’t seem the craziest concept to me.
But this is going to involve a) a very good platform and b) a fair bit of consumer education. And in the meantime it feels more likely the wider market is going to continue to push harder at the casual element all the potential issues and upsides this contains. But I will leave the final words to someone smarter than me as usual.
The strategic vs casual concept is less binary than you are presenting it. There are plenty of guys who bet casually, but like a bit of stats to make them feel smart. And there are plenty of smart math guys who like a little degenning along the way.
Perhaps the real secret sauce lies in the gap in-between…
What this really does is turns betting into more of a slots experience, and I’m not sure anyone has really thought about the path it sets the industry on. There is some research that shows increased levels of problem gambling among frequent in-play bettors, due to the rapid-fire nature of the betting experience. But I am out of my depth here so I will leave that discussion for another day.