The future of exchange betting
The future of exchange betting
Although it might have taken something of a back seat over recent years, exchange betting still holds a wealth of opportunities within the betting industry eco-system.
Speaking at this year’s Betting on Football Conference, which took place in London earlier this month, principal consultant at 1710 Gaming Tina Thakor-Rankin set the tone when she noted that “exchange betting is an area which is quite often overlooked, but it’s also an area that resulted in one of the most successful most profitable brands in the industry – Betfair”.
Underlining the commercial viability of exchange betting in 2017, Todd Johnson, chief operating officer at Smarkets, said: “Once Betfair merged with Paddy Power, I think a lot of people thought the exchange model wasn’t going to survive, or that it was going to become part of a conglomerate model.
“However, there’s a specific type of customer who is focused on pricing, good odds, transparency and liquidity, and as long as you can provide that, there’s always going to be a segment of the market that’s interested in coming to you.”
While Matchbook CEO Mark Brosnan agreed with Johnson’s comments, he urged exchange betting operators to ramp up their customer engagement efforts.
“I think the whole exchange model needs to evolve and move to next level,” he stated. “Historically, the core USP for betting exchange is really low margins and really high volume – and that’s very useful for a specific subsection of customers.
“But I there’s a much bigger opportunity for independent operators to take their expertise in building what could be considered the most difficult type of betting platform, and to build a really good user experience on top of that core offering.”
Bronsan added: “Overall, I think the online gambling industry, when you compare to other eCommerce sectors, is miles behind – both in terms of storing and managing its data and understanding the customer.
“Being an independent operator and running a betting exchange can offer a huge advantage, in that you can take longer-term decisions, you are not necessarily chasing the next quick-win product that will deliver a lot of revenue, and you can take longer-term decisions around building proper data storage and building proper personalisation because that immediate revenue pressure isn’t there.
“If you couple that with your already really good price you are in a really good place, you have a really good shot at disrupting the industry.”
According to Bronsan, the betting exchange industry should act as more of a “collective” when it comes educating punters to the value of their offering.
“We do need to work together to take the betting exchange to a new level,” he said. “Betfair did quite a good job on bringing people in, but that level of education and evolution seems to have dissipated somewhat. I think if we take a collaborative approach towards education we can start seeing a lot of people move again towards betting exchange.”
Totally Gaming says: Though often overlooked, exchange betting remains a commercially useful tool for independent operators, be it for pricing or hedging. However, in order to move to the next level, exchanges should focus on refining their user experience models and build personalisation into their platforms.