SBC News Voice of the Sports Betting Industry
The unique intricacies of catering to local customers make international expansion no easy feat for betting operators. As such, Will Westcott, Head of Business Development at Genius Sports, underlines the importance of fostering a go-local approach on pricing and risk management to meet new market challenges, demands and variables.
With new markets across Asia, Latin America and the U.S. on the cusp of introducing sports betting regulation, many operators today have a keen eye on international expansion. For others, 2023 is set to be defined domestic growth or a new sportsbook launch.
Whatever the goal, scaling a sportsbook poses many questions for C-suite and trading teams alike. How do you offer competitive prices while managing liabilities in the most profitable way, when betting activity differs between regions? And what sports and markets require the most attention when you’ve got finite trading resource but thousands of players to engage on a local or global scale?
For most operators, running a 24/7 trading function requires at least some degree of outsourcing. Yet localised pricing and risk management is essential to unlock the full potential of each regional opportunity. So how do you the strike the balance?
Knowing the local market
To begin, it’s important to understand exactly why regionalised trading matters. Launching a sportsbook or entering a new market is easier said than done. Especially when you’re jostling for market share with local casino and media brands with existing recognition and international operators with big marketing war chests.
To win in the long-term, your sportsbook product needs to be highly localised and differentiated. Take Colombia and the UK, two markets with major regional differences. In Colombia, pre-match betting on Liga Dimayor is vital, whereas in the UK in-play dominates pre-match, with leagues like the Premier League and EFL the big revenue drivers.
These differences mean a homogenous trading strategy will restrict your growth and bottom-line revenues. To engage players, you need to offer competitive odds and market-types on your local leagues. This is only possible when you can configure overrounds and supremacies on singular sporting events and selections.
Meanwhile, bet limits must differ across territories. For example, U.S. operators need high limits on the NFL and college basketball, but these same limits might leave European and African operators open to sharp money. Then you need modelled pricing and reliable data on your key content– and many of our clients see value in customer-centric liability management to drive their odds movements, too.
It’s all about control…
So when selecting a trading partner to support your international expansion or launch, flexibility of trading is a key requirement. Only then can you customise your content, pricing, limits and player profiling to suit the local market.
How each operator approaches trading varies. If you employ a team of 30 traders, you’ll likely want to focus headcount on core content including pricing special markets and props on major leagues, while outsourcing the remaining sports and events that make up your 24/7 offering.
However, operators with a smaller team might outsource all of their pricing and some of their risk management, focusing on key functions like player segmentation and marketing.
Whichever model you adopt, agility and localisation of strategy is essential, even when you’re striving for operational efficiencies.
As an example, Resorts World Catskills outsourced the entirety of its trading operation to Genius Sports when launching its New York sportsbook. On the other hand, Betsul outsourced all of its risk management to us when expanding last year, but spread its pricing across multiple suppliers. Both these operators execute different trading strategies, designed for their individual player base.
Finding the right formula
One of the first steps to localisation is working out what kind of brand you want to be. High bet limits? Unique market types? Low-margin odds? A strong acca offering to win over recreational players?
In general, we’re seeing a trend of European operators seeking decent-sized bet limits and low-margin odds with the aim of being the best price to engage and retain players – while closely monitoring sharp activity.
Meanwhile, in the U.S. it’s often less about event coverage and more about high bet limits and a leading market-range on the major leagues – with bets between $15k and $20k USD common. For Resorts World Catskills, a key focus is on offering NY State’s highest limits when the Jets and Giants play, while our West Virginia-based casino partners need extra content on the MEC Basketball Tournament and East Coast Hockey League.
In LatAm, the average stake size is far smaller – often between $3 and $5 USD – yet liabilities still tally up due to the popularity of accumulator betting (often upwards of 50% of total bets placed). These nuances show why localisation is so important.
Whether you’re launching a new sportsbook, looking for operational efficiencies or expanding into a new market, betting on regionalised trading is a no brainer – or else you’ll risk having to switch suppliers and technology later down the line to get the ownership you need.
