Guest Blog: The Future of Sports Betting, by Mark McGuinness

Guest Blog: The Future of Sports Betting, by Mark McGuinness

Monday, February 9, 2015 Totally Gaming

A new year surely herald’s innovation, yet the vultures are circling with hyperboles of ‘challenging times ahead’, ‘consolidation’, ‘profit stagnation’, ‘streamlining’ – I am of course referring to the dawn of the new era for operators post Point of Consumption Tax (POC) introduction in the UK, writes Mark McGuinness.

It’s the easiest thing to do when a business has to deal with the fall-out of (POC) on the bottom-line, to cut advertising here or a sponsorship program there. Marketing is the revenue engine of any business and should be viewed that way. It’s an investment, in people, the technology and your customers. Of course post POC, will shake up the UK market, the big will get bigger and the smaller operators shall get bought up or go out of business.

So who could be the winners post POC? For me its sports betting, casino shall always have its audience, while poker is perhaps on the wane. Social gaming still has some challenges around conversion from free to real money, never mind the consumer fascination with fads and regulatory bumps in the road to the dominance of the platforms to reach those millions of consumers.

Yet are we forgetting one gambling activity – of course we are – lottery. I see a revolution unfolding. After all, lottery as a sector that is in dire need of product innovation and change. Indeed we are already witnessing some alliances between behemoth slot providers and lotteries in the USA, which is another story. Lotteries are also played by the masses due to the life-changing opportunity to win millions in prize money.

And guess what, lottery products that are sports based offer operators double digit-margins. Sports multi-leg jackpots are successful. Take Sweden’s V75 (circa. £480m on trotting) and Spain’s La Quiniela (circa. €380m on football). Both demonstrate that the sports betting public will play lottery-sized prizes on sports.

There shall always be detractors to lottery sized sports jackpots. The common complaints begin their historical ‘all or nothing nature’. However, if you include fractional cash-in, an innovation which enables bettors to sell part of a ticket that remains ‘live’ during the progress of a multi-leg game then this complaint disappears.

For example, a player can choose to sell the entirety of a pick 6 jackpot ticket should he have the first five events correct, or sell 60 per cent and retain the remaining 40 per cent till the conclusion of the pool. Cash-in functionality is phenomenally successful; just take Betfair who had over 1,000,000 cash-in transactions in the first 12 months since it launched the product.

Sports based lottery-sized jackpot bets with cash-in offer a new category of products to a huge mainstream betting market. For the betting operator it offers risk free income and increased margins. And for the bettor it can provide life changing winnings and with the in play cash-in feature provide a compelling reason for players to realize smaller but still substantial pay-outs and potentially recycle those cash winnings within the betting platform. What’s more an award-winning company such as Colossus Bets which has pioneered ‘Fractional Cash-In’ on all of their multi-legs sports pools and has been granted patents on the technology is leading the way and more shall follow as the two industries of lottery and sports betting align.

Remember even though we are in the post POC era, we aren’t in a recession or economic crisis like back in 2007. Consumer confidence is returning, house prices rising and fuel costs going down, all means more disposal income. Now is the time to invest; now is the time to sell more to gamblers and drive top level growth which shall flow to the bottom line. And I for one believe that sports based jackpot pools may just hold the answer for the industry.

About the author:

Mark McGuinness has more than 15 years’ experience in digital marketing director roles with both private and public i-gaming operators. He is the resident iGaming Futurologist for Isle of Man-based Mainstream Marketing & Communications, a digital marketing agency offering business and marketing advice on social gaming, i-gaming, bitcoin and land-based gambling. 

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