Databases are deemed the contemporary equivalent of oil. Simon Trim, a strategic consultant at 10star, recently conveyed his insights to iGB, a specialized publication, discussing the future of the industry and the potential for technical advancements in bookmakers and online casinos. The expert highlighted the most auspicious approach for data optimization in the sportsbooks' domain, shedding light on processes that can enhance business through improved analysis and utilization of databases.
About two decades ago, mathematician Clive Humby coined the phrase "information is the new oil," envisioning databases as a new source of wealth for industry and economics, akin to the transformative impact of oil discoveries since the mid-19th century. For the sports betting industry, this prediction became particularly prophetic. In 2006, in-play offerings, now reliant on real-time game state data, were virtually nonexistent. Back then, most operators offered minimal bets after the start of a sporting event, even in football, with some bookmakers entirely neglecting in-play options.
Fast forward to 2024, and sports betting operators, along with their supply chain, hinge entirely on the data and information available to bookmakers. The belief is that the Internet age and database utilization have significantly contributed to the industry's growth and prosperity, suggesting that such income levels would have been unattainable two decades ago.
However, this assertion is challenged. In markets regulated in 2006, when considering the impact of substituting pre-game turnover in gaming and the shift from retail to online, the purported "growth" in sports betting is likely not much more than the overall GDP growth over the same period. Consequently, the available data did not substantially contribute to the expansion of the betting industry.
Who's the next big winner in the industry?
For today's leading operators, adapting to evolving work patterns centered around data analytics poses no challenge. Industry giants like Flutter and Bet365 stay abreast of all innovation and technological progress trends. The adept integration of new technologies has propelled these companies to the forefront, with Ladbrokes and William Hill asserting dominance in the horse racing and bookmaking sector. While sports data analytics alone may not have driven industry growth and revenue, the future hinges on how operators leverage various forms of data to secure a position among the next generation of industry winners.
Future sportsbook revenue will derive from the enhanced utilization and interpretation of existing customer data. Returning to the oil analogy, it holds true that black gold fuels global economic development, but in its raw state, it holds minimal value. This draws an intriguing parallel with databases and underscores the pivotal role effective data utilization will play in determining the industry's future winners.
Setting prices based on real-time information
In the last two years, a staggering 90% of all databases worldwide have come into existence, presenting operators with a treasure trove of potentially valuable information derived from analyzing customer rates. Despite this, the tools available for obtaining, analyzing, refining, and objectively utilizing betting information to boost profits are, at best, rudimentary. Consequently, a significant portion of the value offered by information and databases remains untapped.
The current landscape is dominated by gambling models that struggle to keep pace with the dynamic nature of data changes. While historically effective in providing value-added content, these models lack the capability to automatically manage risks in real time. Factors such as historical data, non-disclosure obligations, customer qualifications, and other operational market information are not seamlessly integrated into existing models.
Operators face a critical choice—to contemplate how their pricing adjusts based on real-time risks. Implementing objective, database-driven decision-making processes has the potential to significantly enhance the bottom line. Drawing inspiration from the financial industry, the sports betting sector should aspire to emulate models that effectively respond to real-time data changes, setting a precedent for transformative success.
Putting the algorithm into action
Harnessing the power of robust algorithms enables automated decisions based on real-time information derived from accepted rates and various additional data sources by operators. A paradigm shift in current operating models empowers operators to optimize pricing in real time, aligning with their risk preferences and leveraging objective data analysis. The ramifications of modernizing the approach to risk management in the gambling industry are evident.
This transformation yields tangible outcomes, including increased margins, growing profits, reduced volatility, improved brand differentiation, and sustainable market share expansion—all achieved while prioritizing customer safety and the judicious use and analysis of information. Databases and information, when effectively utilized, could lay the foundation for a new economic era for sports betting operators. The critical determinant, however, lies in how this data is employed and the degree of effectiveness in leveraging its potential.
