In-race data: The £500m opportunity
In-race data: The £500m opportunity
Will Duff Gordon, CEO of Total Performance Data (TPD), explains how operators can grow racing revenues by deploying in-race data.
“Operators are sitting on a potential goldmine of untapped racing revenues, with data available to unlock up to half a billion pounds of online turnover. Some firms are harvesting this money already.
According to figures from the UK Gambling Commission, remote betting on horse racing generated £5.64 billion in turnover during 2016.
Our models have shown that implementing even a basic in-play proposition could grow turnover by 10% – that’s more than half a billion pounds of extra turnover. It is also just the start.
In finance, high frequency trading rose from zero in 2005 to 60% pre-crisis, and is now 35-50% of total stock market trading volumes. It was technology and fast data that precipitated this explosion.
Only in the past two years have advances in GPS technology made it possible to produce data accurate and fast enough to enable operators to offer and trade an in-play racing product. This data is available with TPD streaming live data from the backs of over 1,000 horses on two continents last weekend.
Bet365 and Paddy Power are manually offering in-play odds on lots of races right now. Many more are following suit in the coming months with algorithm-powered odds. We think, within a year, it will be the industry standard.
Some are understandably sceptical. Just as the first in-play football bets were a hairy experience for operators making prices from slow TV pictures, so in-play racing odds will need time to bed down.
But operators welcomed the data-driven solutions from the likes of Sportradar, Perform Group and Genius Sports, who are now massive companies whose innovations are an intrinsic part of the betting ecosystem.
The upsides are clear for operators. On the most basic level, it allows them to accept bets on races in the seconds after it starts. Many operators have so far avoided doing this out of concern for getting stung by shrewd customers.
Currently, operators lose millions of pounds a year in turnover on bets that are not processed in the seconds before a race starts: the ‘after the off’ market. Beyond the obvious benefits of a fully functional in-play proposition, it should be a matter of urgency to find a way to seamlessly transition from ante-post to in-play.
But the benefits of live betting on racing go beyond this. We have looked on as football and tennis have grown incremental revenues by driving customers to in-play betting and micro markets.
If racing can do the same, operators will no longer have to join the race to the bottom on margin, where the only way to differentiate is to offer more and more generous bonuses to customers.
Sky Betting & Gaming CEO Richard Flint noted last year that the operator makes four times the profit on a football bet than it does on a racing bet. Combined with the demographics of the typical customer for each sport, it is clear that racing needs to modernise if it is to survive. Live tracking data is at the heart of this modernisation.
This must include a complete overhaul of the way racing is presented as a betting proposition, including the incorporation of data, the promotion of derivative betting markets and the gamification of the sport to appeal to a wider spread of customers.”
Totally Gaming says: If operators accept the challenges of in-play betting, there’s no reason why racing cannot reclaim its place at the heart of the sportsbook offering of major operators. But if racing takes too long to seize this opportunity, the Total Performance Data CEO warns that the sector may well be superseded by well-financed newcomers to the market, such as drone racing and eSports.