This is the second article in a two part series by Jody MacDonald a Senior Associate and sports data and technology expert at the UK’s leading sports law firm Couchmans LLP. In part 1 we looked at the market for sports data and how official data partnerships between sports bodies and data resellers work. In this article we look at how sports data is used in the betting industry and how sports bodies can engage with legal sports betting through the supply of official data in a way which generates new revenues but also protects (as opposed to damages) the integrity of their competitions.
The Sports Betting Market
The amount of sports betting transacted worldwide is notoriously difficult to quantify. But reliable sources claim that the Gross Win (total stakes less winnings) of the current legal/regulated market alone will reach $70bn in 2016. Sports betting clearly presents a huge opportunity which the wider sports industry cannot simply ignore.
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With advances in technology making it easier than ever for fans to bet on the sports they love and governments in many parts of the world considering or actively pursuing a policy of legalising and regulating sports betting as an activity we may see the unprecedented growth the industry has experienced to date continue in the next 10 to 20 years.
The strongest growth area within sports betting is undoubtedly online in-play betting where customers can bet live on multiple markets in real time during an event. Fans like the variety of bets on offer and the ability to enhance their enjoyment of an event as it unfolds. In-play is equally popular with betting companies who can offer hundreds of markets and bet types on a single event and derive higher margins on in-play compared to pre-match betting.
Use of Sports Data by Betting Companies
Betting companies need fast, accurate and reliable data from sports events in order to create and manage markets, set odds and settle bets – particularly for live in-play betting. To use a basic example, a market on the next goal scored in a football (soccer) match will suspend and re-open many times during the match whenever a goal is likely to be scored. If the operator is receiving a reliable feed of data within a few seconds of the actual events occurring on the pitch it will be one step ahead of most punters following the match on TV or online and it can keep its market open for longer, take more bets and generate more revenue.
Alternatively, if the data is slow or unreliable the operator will have to be more cautious, suspending markets regularly and runs the risk of continuing to accept bets when a goal is very likely to be scored (e.g. a penalty has been awarded) or worst of all has already been scored.
The Opportunity for Sports Bodies
The key to creating the kind of fast, accurate and reliable data that is so valuable to sports betting companies is access. Data collected by an individual who is in the venue with the authority of the relevant sports body (ideally in a press box with a good view of the action and access to broadband internet connection) will be faster and more reliable than unofficial data collected by someone in the venue collecting without official authority from a poor vantage and using patchy mobile internet connection or someone using public broadcasts that are subject to a technical broadcast delay.
In part 1 of this series we explained how sports bodies are beginning to take control of the collection and supply of data from their events by entering into official data partnerships with specialist data resellers. As part of any such strategy the sports body will have to consider whether to allow its official data to be supplied for use in connection with legal sports betting.
So what are the benefits of engaging with the betting industry in this way and how can concerns about the threats to the integrity of competitions be managed?
Benefits & Integrity
The value of good quality official data to the betting market is clear. By allowing its official data to be supplied for use in connection with legal betting the sports body will unlock a new, long-term and sustainable revenue stream – a rare commodity in a world where other sport revenue streams are coming under extreme pressure.
These new revenues can be used to fund any number of positive initiatives for the sport including subsidising collection of more detailed performance and tracking data which can be used for coaching purposes, given to broadcasters and sponsors to enhance their rights, or used by the sports bodies and its member teams to engage with fans.
Although sports betting is a legal and well regulated leisure activity in some parts of the world in others it takes place in poorly regulated “grey” or unregulated and illegal “black” markets. The problems of match-fixing and other corrupt practices that can be linked to betting are also well documented and potentially affect all sports. For these reasons sports bodies are (quite rightly) wary about how they engage with the betting industry.
However, many sports bodies are realising that betting will take place on their events regardless of whether they approve of it or not and if they don’t take control of the supply of data from their competitions unofficial sources (over whom they have no control) will step in and satisfy the demand instead.
What’s more revenues from the supply of official data for legal sports betting can be used to fund betting integrity protection measures for a sport including: education programmes for players; bet monitoring systems; integrity officers to oversee the sport and investigate suspected corruption; and counseling for people in the sport who may be affected by personal problems related to betting.
Official data supply arrangements also provide a platform for positive co-operation between sports bodies and betting operators in the fight against corruption (a fight in which they both have a common interest). Betting operators who use official data may agree to refrain from offering particular types of bet or share information and co-operate with betting corruption investigations carried out by the sports body.
To conclude, with careful planning and a well thought through strategy it is possible for sports bodies to use assets such as official data to take advantage of some of the opportunities offered by the legal sports betting industry whilst also improving their protection against integrity threats at the same time.