iGaming technology specialist, Tony Plaskow, says US operators must plan a route now to eventually manage their own platforms in order to unlock long-term value and unfettered growth
As the US sports betting market begins to develop over the coming months, one of the more fundamental decisions facing sportsbook operators is how to define their relationship with technology.
For many years, Europe’s major sports betting giants tended to be marketing rather than technology companies. Operators which opted for a third-party platform were free to focus on acquiring and retaining players, without worrying about tech.
With the ink barely dry on the repeal of PASPA, many providers offering fully-managed sportsbook solutions are similarly making this case in the US. The argument is a simple one: for those looking to grab market share, speed is of the essence. Best leave it to the professionals.
While there is a compelling logic to this approach, taking control of your technology can pay significant dividends in the long run. The challenge for operators in the US will be to find the correct balance.
Moving away from fully-managed sportsbooks
The European sports betting experience is no crystal ball for the US market, but it does provide some guidance.
The trend over the last 10 years has seen most sportsbook operators move away from fully-managed solutions towards a hybrid approach whereby they rely on a core risk management platform, bolt on other third-party services, and then manage various aspects of the package themselves.
This approach provides greater flexibility, the ability to better react to customer demands, and, ultimately, offer a more powerful, bespoke product. Of course, it also requires significant expertise.
This expertise is not acquired overnight, and the appeal of a fully-managed sportsbook will be too strong for many to resist. In addition, most US operators don’t have the benefit of decades of retail bookmaking experience, unlike those in Europe.
However, while taking the fully-managed option may be the best approach in the short-term, those without a plan to evolve and take control of their technology run the risk of very quickly being left behind, struggling to differentiate and control their product offering once they’ve learnt the tricks of the trade.
Transitioning your technology
For those who want to eventually take control of their technology, it is paramount to plan ahead. Extricating yourself from a fully-managed solution can be a difficult, costly and lengthy process. Have a plan from the outset and select a handful of components to kickstart the process.
Managing your own website is often a logical first step, followed by payments and CRM. Trading is another area where a number of third-party automated and self-managed pricing tools are available to plug into your platform. More challenging is to build in-house data analytics systems, machine learning and AI plug-ins where existing offerings have been developed and honed over many years.
All these areas require full-time, in-house expertise eventually, but Green Cards are difficult to obtain, and Mr Trump hasn’t made it any easier. So it makes sense to begin with experienced consultants to train up in-house teams. Looking overseas is probably the only option initially.
Unlocking your growth potential
Taking control of your technology means taking control of your future growth. Those dealing with legacy platform providers will struggle to adapt to a set of customer demands that have yet to be fully defined.
Remember, the major sportsbook providers have grown off the back of European and Asian markets over 20 years. The US will look very different, and these providers don’t always have the best reputation when it comes to renewing their tech. The process could take years.
On the other hand, when you look at the most successful European sportsbook operators, bet365, Paddy Power and Sky, for example, they have spent years taking over their technology stacks and enjoyed over-market growth rates because of it.
They originated by selecting a core platform then developing in-house and bespoke functionality. They have taken market share from operators like William Hill and Ladbrokes who have been in the market significantly longer and have over 2,000 retail establishments each to promote their brands in. Direct control over their technological development has allowed for this growth.
Only by building that in-house expertise will you be in a position to control your own destiny. For all the appeal of a fully-managed service, those achieving the most success in the nascent US sports betting market will need to develop a far closer relationship with their technology.
Tony Plaskow is an iGaming technology veteran with more than 15 years’ experience in the global online gambling sector. He can be contacted through findmyexpert.com.