The 2020 virtual Global Gaming Expo provided dozens of informative sessions that added up to a wealth of knowledge on what directions the industry is heading. G2E gave particular focus to the US sports betting market, which has exploded since the repeal of PASPA in 2018. Despite casino shutdowns and stoppage of sports leagues during the coronavirus pandemic, online sports betting has kept on humming.
Sports betting reached a record handle of about $3bn in September. With new markets like the District of Columbia and Tennessee entering the playing field, the market will almost certainly continue its rapid growth through the final months of 2020. To give a breakdown of consumer trends, G2E hosted, “Evolving Sports Betting Research Trends: What is the Consumer Thinking,” featuring panel members from Kambi, GeoComply and Heart+Mind Strategies.
Max Meltzer, Kambi CCO, led the discussion with a close look at how the pandemic lockdown affected betting behavior.
Kambi compared sports betting handle figures from three periods: pre-lockdown (January to mid-March); during lockdown (mid-March to mid-July); and post lockdown (mid-July to end of September). Predictably, basketball and football accounted for the majority of pre- and post-lockdown, but the lockdown months saw a shuffle in wagering popularity.
Table tennis, the one sport played continuously from start to end of lockdown, earned 39% of wagers, followed by soccer at 24%, and UFC/MMA at 10%. The interest in table tennis did not extend much beyond lockdown, however. By post lockdown the sport accounted for just 3% of wagers.
“Out of nowhere came table tennis as the most phenomenally interested sport and we evolved quickly as a trading organization to how we deal with it,” Meltzer said. “With this level of turnover, you really have to have all the algorithms in ways of working that can make a lot of sense.”
Though post-lockdown provided a return to a more traditional hierarchy of handle, there was some unexpected jostling among the mid-tier wagered sports. Soccer doubled its share from pre- to post-lockdown to 8% and leap-frogged ice hockey and tennis. The earlier return of European soccer leagues helped the sport’s standing, as did the sudden popularity for an eSports league on FIFA.
Kambi saw a greater percentage of in-play betting during lockdown. In-game wagering grew 12% during that period, amounting to 38% of all sports. After lockdown, in-game fell to 30% which was still 4% higher than pre-lockdown.
“What we’ve seen that actually became a point was that people were educated a little bit more about in-play betting than perhaps they were before,” Meltzer said.
In-game wagering has seen its greatest growth in instant markets for NFL live bets. About 30% of NFL live bets come as a result of instant markets, according to Kambi, a 20% year-on-year increase. Money line, spread and total points still dominate in-game wagering, but bets like First Play – Road or Home Team Drive X, have surpassed first or second half spreads.
The way sports bettors wager at land-based casinos has adapted to Kambi’s latest technology. Bettors prefer to wager at kiosks over tellers by an 80% to 20% margin.
“The reality is, as long as cleanliness comes first in land-based casinos and people are feeling assured that the kiosks are being effectively monitored, people want to use kiosks more than they want to interact with people,” Meltzer said.
Kambi, which works with retail sportsbooks in all 11 states it operates in, reports higher average wagers on-property ($66) than online ($31). Parlays are up 5% from a year ago, including a 19% increase in multi-sport parlays. Plus, 53% of basketball parlays featured baseball, an indication that bettors were seeking higher risk for higher reward post-lockdown.
The panel then transitioned to Anna Sainsbury, chairman and co-founder of Geocomply, who presented geolocation data on consumer behavior. Geocomply looked at user movements around northeastern markets and found one quarter of New Jersey wagering comes from New York residents, while 82% of New Jersey traffic is within 10 miles of the border. In Pennsylvania, a quarter of wagering takes place within two miles of the border.
With so much interstate movement near borders, Geocomply invests its resources to promote clear consumer messaging and offers operators concise data.
“What we want to do is make sure that anybody out of state who might have seen some advertising for online gaming, is that we give them the right messages to tell them where they can play and what legal operators there are,” she said. “We also make sure that users that are in a state haven’t done anything to tamper with their data. So we’re looking for any kind of data modification, someone using a VPN, proxy or anonymizer.”
Geocomply’s PlayPause tool seeks to offer better responsible gaming solutions by gathering data on self-exclusion among traveling consumers. A bettor self-excluded in New Jersey could still access gaming in New York. Similarity, someone self-excluded from one brand in Pennsylvania could still play on another brand in New Jersey.
“To offer a solution, we’ll need a nationwide solution that allows a user at the time of recognition that they would like to implement some controls,” she says. “Maybe a month, a year, five years or a lifetime that we’re going to be able to distribute that to as many states, operators and gaming verticals as possible.”
Geocomply found that high wager volume events like the Super Bowl led to increased travel of New York sports bettors to New Jersey. During Super Bowl 2020, New Yorkers wagered an estimated $837m at legal New Jersey sportsbooks.
One way for operators and regulators to collect better data is by requiring customers to enter the last four digits of their SSN when registering at a legal brand. According to Sainsbury, “This allows us to collect enough data to create a de-indentified user ID, allowing us to more effectively and uniquely identify a user without concerns of a potentially vulnerable data base.”
The panel wrapped up with Darren Bishop, senior solutions consultant for Heart+Mind Strategies, who presented insight into education and communication on legalized betting. Heart+Mind conducted a pre-pandemic interview with thousands of US adults who wagered both legally and illegally in legal and non-legal states and found 74% of people said it’s important to wager only using regulated methods.
Over half illegal bettors believed they were mostly wagering legally. When these bettors were told they were participating in unregulated forms of sports betting, 84% said they were surprised. While Heart+Mind found more bets are still being placed illegally than legally, the growth in legal sports betting is outpacing illegal betting spent.
Of consumers who participate in illegal sports betting, 61% were millennials and 46% multicultural according to the survey. Unregulated bettors also outspent regulated bettors by a $2,815 to $669 margin.
“This highlights the opportunity for the industry,” Bishop said. “If they're able to reduce the confusion and help those folks migrate into legal betting markets, that’ll be a tremendous benefit to the overall spent.”
Heart+Mind found that among legal methods, US online sportsbook wagering had grown 12% while casino sportsbook betting fell 10%. That margin only accelerated amid the pandemic. For illegal methods, bookie betting was down 25% while offshore online sportsbooks grew 3%.
Though there’s a long way to go in educating the US betting public on legal versus illegal betting, Heart+Mind discovered encouraging trends. In legal markets, illegal sports betting decreased 17% YOY. As more states legalize sports wagering, the research indicates fewer bettors will resort to illegal methods.