SBC News Voice of the Sports Betting Industry
Stuart Viney, Chief Product Officer at Sporting Solutions, chats to SBC News about how sportsbooks can improve their odds models via the company’s managed trading services. Viney explains that these services offer clients a flexible and effective way to reach profitability by giving them “the extra 10%” edge over their competitors.
SBC: How have changes to the preferences and strategy of sportsbooks impacted managed trading services in recent years?
Stuart Viney: As integrations become more efficient on both the operator and supplier side, they are now less feared by decision-makers who sign off product roadmaps. Sportsbooks are, therefore, more prepared to complete new integrations with a range of suppliers to get ‘best-of-breed’ content rather than opting for a ‘one-stop-shop’ approach with a single supplier.
Consequently, suppliers offering managed trading services need to adapt to this more flexible approach from existing and potential partners to ensure that they can still provide the benefits of outsourced services across the full offer.
This is why at Sporting Solutions we have recently launched our managed trading service, which is agnostic of pricing sources. This will allow our partners to receive pre and post-bet placement risk management on all of their events and markets, whether it was traded by Sporting Solutions, a manually-created special market, or from a third-party supplier.
SBC: How significant is it to have good pre-bet placement tools when it comes to maximising your profitability as a sportsbook?
SV: Whilst pre-bet placement risk management and player betting limits are obviously nothing new, the value of an effective, flexible system in this area has probably been underplayed. Stake factoring of sharp and unprofitable players will obviously continue to be utilised, but there is no doubt that most MTS sportsbooks are leaving money on the table because of heavy-handed restrictions, caused in part by an inflexible tool set.
Ultimately, we want to lay as many of the right sized bets, layed to the right players at the right time, as possible. This has been a primary focus as we have designed and developed the best decision service of our MTS, in conjunction with our existing player profiling algorithm and automated risk adjusted pricing tools.
If a moderately successful football punter who has an edge on ‘softer’ markets such as player props wants to bet on the match result of the Euro 2024 final 10 minutes before kick-off, there is no doubt that many trading directors would happily lay that business if they had functionality that easily allowed it.
Additionally, whilst a level of control over the activity of sharp players will undoubtedly always be required, having a service that ensures that the valuable information these players provide via their betting activity is a huge asset. We have certainly seen the benefits of this via our Odds Services Plus product, with an expected margin improvement of over one percentage point across the full range of sports and markets.
More generally, we know that dynamic betting limits are key, so that the amount players can bet usually increases relative to time until kick-off. However, this is often negated by archaic automated rules and actions that suspend the offer unnecessarily based purely on market liability. Sporting Solutions can apply more nuance to this, with a better understanding of who is betting and whether the business being received is deemed abnormal or exceptional for that selection, at that time.
SBC: Clearly, player profiling underpins all of the above but where is the industry currently in this area and what constitutes a successful profiling operation?
SV: There have been fairly significant strides in recent years with greater adoption of machine learning techniques, but there is definitely still some way to go. The objective is to make an accurate appraisal of each player as quickly as possible, with a keen focus on likely long-term outcomes over initial short-term performance. The ability to then quickly detect significant behavioural changes – often a sign of account acquisition – is also critical for maximising overall profitability.
Most profiling algorithms will factor in things like ability to consistently beat closing price as a strong barometer of likely long-term profitability. Again though, currently many will lack the additional nuance – for example, beating the market closing price on the Greek Second Division probably carries less weight than doing so on an English Premier League, so can this be reflected in skill ratings, betting limits and automated responses?
It’s clearly a massive benefit to have automated tooling, but it’s still really important to have the in-house practical expertise to inform and validate what you’re seeking. It is also crucial to close the gaps and edge cases that automation struggles with to limit over or under reactions. At Sporting Solutions, this has obviously been a core part of our business for over 30 years and helps to provide that extra 10% for our partners.
SBC: What solutions or strategies should operators adopt to manage risk and maximise profitability from multiples and bet builders
SV: Multiples activity is pivotal for the overall profitability of sportsbooks, so firstly it’s important that your product helps you to capitalise on the general desire to place low-risk, high-reward bets. To give an example, our bet decision service allows operators to automatically scale their limits based on the number of selections in the bet, whilst also setting rules and criteria that detect and limit activity that could be seen to be exploiting the system via use of banker selections.
Operators who used outsourced pricing and technology have long faced challenges with proactive management of liability from multiples betting. Managed trading services and automated pricing tools need to be supported by liability calculations that can reflect the evolving risk as legs of multiples bets settle. We frequently see the benefit of this as early fixtures settle across a staggered NFL/NBA/NHL card.
In recent years, the popularity of bet builders has presented new challenges. There is a significant margin built into the pricing of these combinations; indeed many tier one operators seem to have realised that they’re actually winning money a bit too quickly from their players via SGPs/bet builders. However, the lack of clear visibility of true evolving risk positions across all combinations means sportsbooks are severely exposed to a ‘black swan’ event that threatens their business. This will continue to be a key focus for us at Sporting Solutions and for the wider industry going forward.
SBC: What are the next innovations for MTS?
SV: Firstly, for us at Sporting Solutions, having recently also launched our own in-house bet builder service, we’ll be looking to integrate and evolve our risk management and bet builder products to offer a fully managed bet builder service to our partners. This will comprise of bet builder pricing, betting limits, liability management and combination resulting, ensuring the full lifecycle can be properly outsourced with confidence.
On a different theme, I hope we will see more sportsbooks looking to risk management as a product differentiator. With the US market currently consolidating around five or six leading operators as the cost of acquiring and retaining customers becomes unmanageable for the challenger brands, it will be interesting to see if ‘phase two’ of the regulated US market features any disruptors with a true trading and risk management focus. With the right tools and automated services at your disposal, trading and risk strategy can be an attractive acquisition and retention tool.
Efficient, automated risk management of player props is an area that can be capitalised on by both suppliers and sportsbooks. The desire for these market types shows no sign of slowing, with punters also expecting both ‘over’ and ‘under’ options on a wide range of players and markets. Being able to quickly interpret and respond to localised betting activity on these markets will be crucial as the offer continues to expand to sports and competitions that have a more regional than global profile.
