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A Brief Interlude – David
I dearly apologize for the allusion to Francis Fukuyama’s “The End of History and the Last Man”. I know it’s too ivory tower for this and I try to stay away from that while writing for The Handle but this time I just couldn’t resist. The TLDR for the analogy is that Fukuyama is arguing that liberal democracies are the final form of human government and History is ending in the Hegelian sense that it will no longer be a continual march forward. The analogy to sports gambling is that the industry and betting options are very much in the same place that Fukuyama believed liberal democracy was in when he wrote this piece. Of course, given the democratic backsliding around the world and the outbreak of war in Ukraine, Fukuyama could not have been more wrong (and he acknowledges this!). We’ll see whether the same outcome winds up true in the gambling world.
The Background
The innovation in sports betting has been impressive, but nothing incredible. The spread bet has been around since its invention in the mid 20th century. Parlay cards have existed since long before we were born (1999), and even teasers have been around for decades (see Stanford Wong’s Sharp Sports betting, published in 2001). Player props have existed in some capacity, and fantasy football has been around since we can remember. Yes, the technology for all of these things has rapidly improved. There’s no more waiting for box scores to tabulate fantasy scores, I can place a bet on my smartphone on any game around the world, and I can get a decent live stream of almost any sporting event that I can fathom. But let’s really think about it. The average person’s fantasy football league probably hasn’t changed much in the last ten years. Sure, there are some DFS aficionados, or people who play alternative games like Best Ball. But fundamentally, the ESPN fantasy experience is much the same as it was 5-10 years ago, with maybe a slightly better mobile app. We think this lines up with the general trend in gambling as well.
Of course, Americans went from not being able to place a bet on a regulated American book to having a plethora of apps to choose from in the last three years. Yet, the apps all look pretty much the same. There are some bells and whistles of course and compared to the barren landscape that existed pre-legalization, it looks like technology has jumped all the way forward. But that’s a bad prior to use. There was no regulated market in the United States outside of Nevada, so naturally there would be limited innovation. There simply wasn’t the TAM to justify massive investments in tech capability, especially for predominantly American sports. Of course well capitalized companies would be able to put forward coherent apps.
So where are we now?
Right now, compared to 3 years ago, it’s an incredible improvement for the average sports bettor. They have multiple functioning apps in any given state that they are in. In regulated states, it’s incredibly simple to toggle between i-casino and sports betting and identifying what markets exist is relatively easy. There’s decent in-play wagering options, relatively seamless deposit and withdrawal processes (for recreational bettors), and a geolocation process that really isn’t too onerous. We’ve even gotten the recent Same Game Parlay innovation from larger operators in an attempt to woo customers. On the surface, it looks like technology has changed the game for bettors.
But now let’s think about my PPH book from 2016. There were live markets on anything that a sports fan could consider a major match up. These weren’t just commercial break odds, but in between plays wagering. The log-in process pretty much aligned with the current state of major operators. Honestly, I might have preferred the layout on my old PPH site for maneuvering and choosing what to bet on. And even now, my current PPH site lets me have decent access to SGPs for most major match ups. Of course, they have less friction with no geo-location or deposit requirements, but the fundamental tech for betting is the same across my PPH book and my accounts at operators that have a multi-billion dollar market cap.
That is why we’re a bit disappointed in operators and see a bit of an innovation gap. There is simply no reason for larger operators to have a UX that is in the same order of magnitude as a PPH book with 30 clients, and yet that is the case today. The types of bets available are by and large the exact same that they were ten years ago. There are more player prop options of course, but that just comes from more trading teams and more technology. These aren’t revolutionary to the player experience.
And the thing is, I’m not sure there needs to be anything super evolutionary right now. American consumers like sleek interfaces and I’m sure they will get better across the board. At the same time, there is significant friction with the American consumer. They like the types of bets they like. There are also only so many ways to cut up a pizza (fundamentally, the rules of American sports mean there are limited wagering options). That’s why I think it’s acceptable to say we might be at the end of History in the Hegelian sense when it comes to sports betting. Yes, there will be modest improvements in function and form of the apps we use. Of course, Fukuyama has since announced he was wrong and I’m sure there’s a decent chance I will too. But as of today, the American consumer seems pretty happy with their options, even if those options aren’t mind bogglingly complex.
