SBC News Ross Fruin, GridRival: is F1 the next driving force for betting engagement?

Ross Fruin, GridRival: is F1 the next driving force for betting engagement?

Formula 1 has cultivated a new youthful audience in the United States, but motorsport remains undervalued as a betting commodity, writes GridRival CEO and Founder Ross Fruin in the latest edition of SBC Leaders Magazine.

Six years ago, the world’s most popular motorsport series found itself at a low ebb. After dominating on a global scale since the 1950s, Formula 1 lost 40% of its global viewership between 2008 and 2016 (per Statista). 

Formula 1 has cultivated a new youthful audience in the United States, but motorsport remains undervalued as a betting commodity, writes GridRival CEO and Founder Ross Fruin in the latest edition of SBC Leaders Magazine.
Ross Fruin – GridRival

Many factors led to the downturn in fortunes for the open-wheel racing behemoth: it downgraded its engines from high-revving V8s to less appealing V6 hybrids, the dominance of Red Bull and Mercedes made the championship title race a procession, and the series failed to embrace the opportunities that social media presented in attracting a new user base. As a result, 200 million fans worldwide switched off.

At that point, Liberty Media, operated by US cable TV mogul John Malone, stepped in and acquired Formula 1 for $8bn. Liberty Media’s mission was to hit the gas pedal on a sport that had been riding the clutch for far too long. Thanks to key changes made on and off the track, the sport is hitting top gear once again. 

In a bid to make the on-track product more appealing, changes to cars have been made to encourage overtaking. With seven races of the 2022 season completed at the time of writing, there have already been three different race winners and four different drivers on poles.

Identifying former owner Bernie Ecclestone’s reticence to attract a younger audience, Liberty focused on bringing the sport into the digital age. Just as the NBA employed a liberal attitude to sharing highlights on social media, Formula 1 relaxed its tight grip on its footage to encourage engagement. 

As a result, Formula 1 experienced 99% growth in year-on-year social engagement between 2019 and 2020 (per The Financial Times). In the same period, the Premier League—the biggest league in the world’s most popular sport—achieved just 3% growth.

Formula 1 further widened its appeal in 2018 with the launch of the Netflix documentary series Drive To Survive. The hit series, initially met with resistance by some teams, has, according to The Guardian, featured in Netflix’s Top 10 lists in 56 different countries. It is widely credited with bringing a new level of attention to the sport and recently earned a commission for two further seasons.

Liberty’s biggest success, however, has arguably been its expansion into new markets—specifically, the United States. The world’s most lucrative sports market was given a second race on the calendar in 2022, with a star-studded event at the inaugural Miami Grand Prix. 

Next season, a third US race will be added to the calendar in Las Vegas, marking the series’ return to the Nevada desert for the first time since 1982 (and representing a timely opportunity for synergy with sports betting). New York mayor Eric Adams, meanwhile, has made it clear he wishes to add a fourth US race to the schedule in the Big Apple.

The Miami Grand Prix, broadcast on ABC’s main cable channel, achieved an average viewership of 2.6 million, marking the sport’s biggest-ever US broadcast (per Sports Pro Media). 

The average viewership for the series in the United States has doubled in the last five years. 

Next year, the United States will boast more Formula 1 races than any other nation and, despite the financial hit of the pandemic and the cancellation of the Russian Grand Prix, Liberty Media has created a tremendous return on its investment. 

The burgeoning US gaming industry has a tremendous opportunity to capitalise on this growth, and the platform to put motorsports at the forefront of sports betting. In May, Maine became the 34th state to legalise sports betting; it is easy to see the strong correlation between the rise of motorsports and the gaming gold rush in the United States. 

It must also be noted that many other racing series have started to adopt and adapt F1’s digital-first playbook to engage a new generation of fans. NASCAR, Indycar, MotoGP and Formula E each attract millions of viewers and are poised to go through similar growth in the coming years.

However, most motorsports series remain tremendously undervalued betting commodities in the US—and with the exception of NASCAR, the race series themselves have not sufficiently addressed the opportunity.

Around the time of the Formula 1 takeover deal, Liberty Media CEO and President Greg Maffei acknowledged that motorsport fans are not adequately catered for in terms of sports betting. 

“There’s an enormous amount of video feed and data about the races that we are already capturing that we are not in any way processing incrementally for the dedicated fan, or opportunities around things like gambling,” said Maffei in an interview with Reuters.

Despite this acknowledgement, much of the sport’s proprietary data remains under wraps. This limits the amount of betting markets that traders can produce and hinders the bettor in making more informed choices. 

The demands of modelling motorsport data sets and gamifying them is more complex and nuanced than for most sports, not to mention the variables of format changes which take place season-by-season, necessitating regular adjustments to these models. 

A typical soccer game will boast dozens of markets on any given operator, from goalscorers to the amount of corners being taken. Conversely, many of the major betting sites provide a much more limited offering around a Formula 1 event, with most markets restricted to outrights on qualifying and race winner, coupled to restrictive podium-place terms. (The rapper Drake reportedly lost $230,000 by backing a driver who failed to top the podium at the Spanish Grand Prix last month. Perhaps he would have exercised more nuance with a greater amount of market options?)

In 2018, Liberty Media agreed a $100m deal with data rights partner ​​Interregional Sports Group (ISG) to enable the development of live in-play betting at Grands Prix. Formula 1 has subsequently brokered betting partnership deals in Europe and Asia, but in-play betting and gaming opportunities remain absent in the United States.

Currently, the lack of an existing large handle appears to make operators hesitant to prioritise motorsport at the level necessary to create engaging markets and promote them to the racing community. 

With more trackside sponsorship in the United States, a pursuit of customers through digital and social channels, and a full exploitation of the data-rights deal with ISG, it is possible that the US could redress the balance with more mature markets.

The incredible rise of Formula 1 under the stewardship of Liberty Media is a case study in the successful revival of a brand. The targeted manner in which they have sought a younger audience also speaks to a robust and long-term market for bookmakers. 

It is imperative, therefore, that the betting industry tracks the sport’s growth, and that the racing leagues themselves help assist with this process.

GridRival, a gaming startup focused uniquely on racing, was founded in response to the lack of opportunities in the market for motorsports fans. It has already attracted a user base of around 200,000 for its season-long leagues product and plans to parlay this success into its first real-money gaming product this summer. The growth gives credence to the notion that race fans are looking for something authentic to the sports they admire most. With global viewership surpassing one billion each year, the potential betting appeal for motorsports is palpable. Based on GridRival user data, over half of motorsports fans consider themselves either mostly or exclusively race fans. This unique level of loyalty and engagement presents its own opportunities and emphasises the need for a motorsports-exclusive product.

Furthermore, nearly a quarter of the Formula 1 calendar now takes place in North America, with the aforementioned extra race to be added next season. The growth opportunities in the United States are clear, and it is incumbent upon the motorsports series to work closely with the betting industry to fully address this potential. 

 

________________

Betting Innovation will lead the agenda of this year’s SBC Summit Barcelona 2022, which takes place at Fira Barcelona Montjuïc on 20-22 September.

SBC’s flagship European sports betting and igaming conference will see 6,000 delegates enjoy a 12-track conference covering all industry developments, topics and disruptions, featuring 200 companies showcasing their latest innovations, and a programme of spectacular evening networking events. 

Visit the SBC Summit Barcelona website to book your All-Access Pass for the early bird price of €350.

Check Also

SBC News Betby finds ‘perfect addition’ to sportsbook product in Formula One

Betby finds ‘perfect addition’ to sportsbook product in Formula One

Betby has further expanded its offering of sports betting markets, incorporating Formula One into its …

SBC News Stake.com makes Formula One debut in Pietro Fittipaldi partnership

Stake.com makes Formula One debut in Pietro Fittipaldi partnership

Stake.com has revealed a partnership with Pietro Fittipaldi ahead of the Formula One season which …

SBC News DRF Bets seizes branding opportunities with Alfa Romeo F1

DRF Bets seizes branding opportunities with Alfa Romeo F1

Online and mobile wagering platform, DRF Bets, has revealed that it is to sponsor Alfa …