SBC News Voice of the Sports Betting Industry
Content is King across any sector with a large digital presence, but in betting and gaming is somewhat of a battlefield, with varying sporting schedules as well as the double-edged sword of data and media rights to consider.
As the SBC Summit Barcelona edges closer, Senior Vice President Of Commercial Operations at Kambi, Jamie McKittrick, shared his views on how operators can navigate the complex and often costly content landscape.
SBC: Hi Jamie, thanks for this catch-up ahead of the SBC Summit Barcelona. You are speaking on the complex subject of official media and data rights for sports betting. Why has this become a prominent issue/concern for all betting stakeholders?
Jamie McKittrick: The primary issue is dramatically increased costs, to the point where content costs now threaten the viability of all but the largest operators. The rights market seems to be getting more volatile as well, which has further implications for engineering and technology teams trying to integrate content.
Two of the major content distributors have (relatively) recently listed on the US stock markets, which has intensified this. There was a one-off cash injection at the time of the IPO (giving them the capability to pay even higher prices for content) and they are now obliged to answer to shareholders and analysts on profitability which further drives prices higher.
SBC: Has betting become embroiled in an unnecessary battle of data providers to secure official data and media rights? How has this ‘conflict’ impacted betting’s value chain and operations?
JM: There has been an escalation in bidding wars between content distributors and they ultimately expect operators to pick up the bill. Some of this is a ‘legitimate’ increase in costs as new territories regulate and the portfolio of important content expands, but much of it is just distributors paying more than rights are worth.
It doesn’t appear that many distributors are actually making that much money out of it though, looking at financial statements to the markets. Many of them are turning to alternative higher margin products to gain an increased share of wallet, such as expanding into marketing services.
SBC: IP rights are important. However, should current trends continue, will sportsbooks tolerate working in a convoluted (multi-rights and multi-authorisation) environment?
JM: I think we are rapidly approaching, and in some cases have already passed, breaking point in that respect. The fact that many rights portfolios are becoming increasingly fragmented adds to operational complexity as operators try to run one ‘sport’ from multiple different data sources.
The resource time and opportunity cost of running so many content integrations is a material concern for most operators. There comes a point where the block of content from a distributor is so small (2,000-3,000 events) that it is impossible to justify integrating that content on a cost-benefit basis.
It would help significantly if there was at least a common standard for content delivery to reduce the ‘change costs’ on operators. Operators will probably be forced to prioritise the highest revenue content and may be forced to leave the smaller fragments alone on efficiency considerations.
Kambi’s position as a neutral aggregator of premium content on which we add value in our turnkey solution is becoming an increasingly unique position in the B2B market and could potentially provide us with a competitive advantage in the B2B space, where other competitors have potentially limited options.
SBC: Data providers are unequivocal of authorised benefits when they announce high-profile partnerships. However, from your perspective, has any real innovation been delivered to the end-user?
JM: Operators would generally agree there are benefits to authorised/official content in terms of accuracy, reliability and latency and as such they would be prepared to pay, within reason, a higher price for better quality content.
The major step change in content available that is still matruing is the availability of deep level statistical data, normally relating to individual athletes. This has been an important advancement and has played a major role in allowing operators to develop ever better ‘bet builder’ type products.
There continues to be operator-led innovation, such as Kambi’s new live ‘ace in game’ tennis product with cashout functionality. This, however, like many other recent betting innovations, is primarily based on operators finding better ways to use existing data, rather than being enabled by any new types of data being made available.
SBC: With bookmakers amplifying their in-play dynamics and streaming services, will media rights become a complex matter with regards to major sporting events such as the World Cup, Grand Slam tennis and Cheltenham Festival?
JM: Content for operators is already a complex space, and nowhere is this more the case than with UK racing – although it looks like NCAA could well rival that set up in terms of complexity. Five or so years ago, hardly any company had a role dedicated to sportsbook content acquisition, but that is now commonplace in many operators and service suppliers.
The complexity of this space doesn’t pose any specific problems relating to large events, where content rights would typically be controlled by a single organising or officiating entity – the core element here being the cost consideration given that these large events are increasingly becoming more concession-led, which results in any costs associated with content acquisition becoming a much larger consideration as the relative spend to acquire them increases.
SBC: Assessing current dynamics and disputes. Do you have confidence that betting’s diverse stakeholders can settle conflicts and overcome obstacles or will betting IP and data rights become another issue that requires regulatory oversight?
JM: It is entirely feasible that content supply could work on more of a partnership model, with the more adversarial approach of certain actors in this space receding over time.
I expect that sooner rather than later several operators will just start refusing content that is too expensive, and that will set a high-water mark that distributors will be able to learn from in knowing the revenue that can be generated, and in turn the price they should pay rights owners.
I also expect the outcome of the Sportadar vs Football DataCo & Betgenius case, due to return to the Competition Appeals Tribunal in October this year, to have some material impact on the way that content distribution occurs.
I’m not sure that regulatory intervention is required, or would necessarily lead to any solutions, although a limited number of US regulators are getting involved in this space and we’re keeping a close eye on developments.
SBC: Ahead of SBC Summit Barcelona, what key advice and information should the delegates take away when it comes to betting and media rights?
JM: Avoid signing any distributor contract that involves restrictions or requirements on future (currently unknown) rights portfolios. You would be binding your hands from an operational perspective, which may leave you with an obligation you can’t technologically fulfil while at the same time handing over a blank cheque to a distributor.
