Expert Opinion: Why Betting Can't Survive Without AI Analysis of Sports Data

In his opinion column, IGB expert Tom Waterhouse explores the significance of sports data analytics and data providers within the evolving landscape of sports betting. He questions whether betting can remain a profitable enterprise without proper access to and analysis of customer data. 

Eighteen years ago, mathematician Clive Hamby proclaimed that "data is the new oil," highlighting the crucial function of data analytics in fostering business growth and innovation. High-quality, precise data is immensely valuable to both the sports industry and betting sectors. However, access to such data is contingent upon obtaining rights, and escalating costs pose significant barriers to entry. 

Today, AI and machine learning technologies are increasingly being utilised to enhance access to premium sports data, paving the way for new fan engagement possibilities, especially in the betting sphere. In contrast, automated data analytics were not always as integral to sports and betting as they are now. Prior to the advent of television, the only way to truly understand a sporting event was by attending it in person. Although radio provided some updates, listeners often relied on expert recommendations. For bettors in that era, deciphering the outcome of their wagers amidst the noisy atmosphere of local bookmakers would have been quite a daunting task.

Innovations and Betting

Prior to the advent of the internet and data analytics firms, betting relied heavily on personal insights. Sports experts and 'gallop spotters' often possessed information about a horse that was unknown to bookmakers, enabling them to place bets at favorable odds before the news circulated.

In contrast, today's social media landscape has transformed rumours into immediate announcements, while online access to data has shifted betting towards a more analytical approach. Now, the premier betting syndicates depend on sophisticated models informed by thorough data analysis.

Sports analytics and Michael Lewis' book "The Man Who Changed Everything"

Michael Lewis's best-selling book *Moneyball* and the film featuring Brad Pitt and Jonah Hill played a pivotal role in bringing data analytics to the forefront of sports. The extraordinary 2002 season of the Oakland Athletics demonstrated how data could transform scouting and team management. The author suggested that data analytics also had the power to impact betting outcomes. By quantifying game events, statistics emerged as essential instruments for establishing pre-game markets.

Technological advancements have progressed significantly, particularly with the advent of in-play betting, which allows for real-time adjustments to odds. This data-driven strategy in managing football teams and betting was initiated by Tony Bloom, owner of Brighton and Starlizard, along with Matthew Benham, owner of Brentford and Smartodds. The rise of the internet led to the emergence of companies like Sportradar and Genius Sports, which initially focused on providing odds aggregation tools for the betting industry. 

However, their role has since evolved to ensure the integrity of sports by monitoring unusual betting activities. Today, data companies play a crucial role in various aspects, including broadcasting, advertising, fantasy sports, betting, and league management.

Sportradar and AI-powered success

Sportradar collaborates with various sports leagues, including the NBA, UEFA, ATP Tour, and MLB, to offer fans in-depth statistics on players and teams. Leveraging AI models and on-the-ground scouts, they are reshaping the fan experience. For teams, Sportradar delivers advanced AI-driven analytics to assist in selection, scouting, and strategic decisions.

The partnership with the NBA enables fans to buy league passes for live game viewing and betting, with prices dynamically adjusted using Sportradar data. This automation streamlines operations by negating the need for operators to maintain trading teams for risk management, significantly lowering their expenses. In 2023, Sportradar's revenues reached €877.6 million, with €649 million derived from betting-related services, including content, odds, and comprehensive trading management services (MTS). 

Additional revenue sources encompass advertising, broadcast quality improvements, and services focused on maintaining the integrity of sports leagues.

Partnerships with sports leagues open up new opportunities for fans

Through collaborations with organisations like the EPL, EFL, FIBA, and NFL, Genius Sports is transforming fan interaction with sports. Their BetVision NFL product taps into the rapidly expanding sports betting market in the US, enabling fans to both watch games and place in-play bets—a lucrative offering for sportsbooks. During the NFL season in 2023, a remarkable 76% of all bets placed by streamers were in-play. 

Additionally, Genius Sports partners with relevant leagues to enhance the game itself. For instance, the implementation of offside camera detection in Premier League stadiums minimises stoppages and eases the burden on referees tasked with critical decisions. The Premier League data zone highlights the engagement opportunities Genius Sports provides for fans. In 2023, Genius Sports achieved revenues of $413 million and recently launched Genius IQ, a platform offering performance analysis and sports data optimisation for in-play betting. 

Alongside Sportradar, Genius Sports covers many of the world's most popular and bet-on sports leagues, commanding high distribution rights worth hundreds of millions of dollars. Nevertheless, the burgeoning global sports betting market, especially in emerging regions, enables both companies to leverage technology for substantial returns on these investments.

Can data analytics revive interest in equestrian sports?

Historically, horse racing has struggled to compete with other sports in attracting fans, particularly when compared to global franchises like the Premier League and Formula One. This poses a significant challenge, as an ageing audience combined with this trend jeopardises the sport's long-term viability. 

To engage younger fans, the integration of AI data analytics into racing is essential, as it serves as a crucial component for any sport's success. Racing & Sports (RAS), a leading global provider of data, analytics, and technology for racing and betting, has been at the forefront of this effort for the past 25 years. The company boasts one of the most extensive racing databases, encompassing over 33 jurisdictions, including greyhound and harness racing.

Horse racing can be intricate and often raises more questions than it answers, which can deter newcomers. The key to attracting a broader audience lies in delivering accessible and valuable information that streamlines the betting process and enhances the overall appeal of the sport. 

For operators, racing remains a lucrative product that operates continuously, unlike any other sport. However, to sustain and expand profitability, it is crucial for bettors to be well-informed when placing their wagers.