Scott Longley: Betting faces generational challenge in esports

The global pandemic has shown the value of esports as a wagering discipline. Yet beyond Covid circumstances, can betting break with tradition and develop real esports propositions engaging with a new generation of customers? 

Scott Longley analyses the cultural and technological adjustments that betting incumbents will face in their next multi-billion £/$/€ field of play…

Traditional sport has come rushing back since the height of the pandemic crisis earlier this year and the sudden interest in esports betting has abated. But are the sportsbooks failing to heed a more important lesson? Arguably, the experience of this year shows that the sports-betting sector is in danger of missing out on a younger demographic entirely.

It was notable that GVC Holdings spent part of the time during its corporate re-brand presentation talking about esports. Partly, the suspicion is that this is paving the way for a rumoured acquisition in the space, something that chief executive Shay Segev did nothing to dispel when he said the opportunity would be leverage “using our own capabilities plus also perhaps some acquisitions”.

But more interesting, perhaps, were his comments on the “new audience” that esports creates. “These audiences tend to prefer mobile, are keen on technology and like new betting concepts,” he told analysts. “It’s an exciting and growth market of which we will be in the forefront.”

Such comments chime with how many in the esports sector define the opportunity in the space.

“This is exactly how we frame the discussion,” said Steven Salz, chief executive and founder at esports betting operator Rivalry. “We’re not just trying to be an esports betting company. We are building a product for the next generation of bettors and we happen to think that the best way to that customer is through esports.”

Marco Blume, trading director at Pinnacle, suggested the esports audience is a “pretty separate” one from the traditional sports-bettors on the site. “It skews significantly younger,” he added.

The Elixir of Youth…

In the US there is a lot of talk about how sports-betting offers a route to a younger demographic for land-based casino entities which are staring down the barrel of an aging consumer.

But in maturing sports-betting markets, the debate has moved on to whether online sports-betting and gaming is also missing the demographic target.

It isn’t an issue which is confined to the betting and gaming sector. Other industries are facing up to similar challenges. Salz pointed to the consumer finance sector and its efforts to attract millennials to wealth management propositions.

“You have robo-advisers and the likes of Robinhood which are bringing in a much more online-savvy audience to investing,” he said. “These products are not re-inventing the wheel on how to monetise wealth management. They are just very good at attracting a different and younger crowd.”

They are managing this via a better user experience and it is this lesson that traditional betting and gaming operators should heed. “In many ways when we were building a product, we were philosophically like a young fintech company,” Salz added.

For Moritz Maurer, founder and chief executive at GRID Esports, a technology and platform provider in the space, the clear expectation from the audience is of a “more digi-centric model”.

“Esports fans, typically younger early adopters of tech, are three-to-five years ahead of their traditional sports counterparts who still tend to use linear media,” he added.

“This trend gives the user a stronger sense of ownership in the type of content they consume as well as the amount of advertising they encounter. To capture the potential of the massively growing esports audience, a bookmaker has to go further to present an appealing offering.”

This “sounds simple” as Salz suggests, but for Rivalry is has taken three years of honing the brand voice. “The way we have developed that is reflective of the product and the market.”

Finding a Social Voice…

It means developing the social media edge to a degree that few in the sports-betting world understand, Salz argued. “We are always developing this side of things. This is how you attract this demographic; you can’t just slap you name as a lead sponsor of a league and expect someone to come to your sportsbook. A much more dynamic socially engaged approach is necessary.”

Maurer added that the audience in esports is “more demanding” when it comes to the betting experience. “This is why we see esports-specific books and non-endemic or traditional books that invest in that area like Pinnacle getting massively ahead in this relation. If esports is part of the strategy it will need more commitment than simply offering basic markets to succeed.”

Intriguingly, Salz pointed to an example in the world of traditional sports-betting which validates the argument about a generation gap. He points to a comparison between Barstool – and the Barstool Sportsbook – and DraftKings which, he suggests, has an audience which likely skews five-to-ten years older.

“Barstool, as a brand, is unique precisely because of its use of social media,” he said. “They target millennials. That is their playbook. Moreover, in Pennsylvania where Barstool Sportsbook has raced to a circa xx% share of the sports-betting market, “the brand was the marketing”.

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