The NFL Wildcard Playoff game between the Las Vegas Raiders and Cincinnati Bengals held a special significance for the betting audience if they had but known about it.
It was the game chosen by PointsBet to try zero suspensions on NFL betting on key markets including the moneyline and the spread. It was, the company said in a press release issued in the days after the game, a first for betting on the NFL.
It certainly won’t be the last.
A proud boast
On PointsBet’s second-quarter earnings call, CEO Sam Swanell pointed out that “most people would be unaware that the majority of operators are operating at just 70% of uptime,” meaning that there would be a 30% bet failure rate.
“It’s not hard to see the difference in player experience between the two outcomes and thus the positive sentiment and ultimately ongoing patronage that will be earned by the superior product experience,” he added.
PointsBet went on to suggest this breakthrough was down to the expertise it was able to deploy via its acquisition in April 2021 of Banach Technology.
The marketing of zero suspensions
Donal Barron, previously with Banach and now an industry consultant, says PointsBet has made a decision relatively recently to try and move the conversation around player acquisition in the U.S away from market and on to product.
“They have decided not to compete on marketing but to have the best product and one component is the maximum uptime on in-play,” Barron said.
However, notably, that experiment was only on one Championship Play-Off game and wasn’t continued with what was left of the season.
He adds, moreover, that with the experimental zero suspension game, it would have been as much of a manual test as it was a tech experiment. “The trader would need to be really good,” Barron said. “That will be a combination of Banach and PointsBet.”
How much of a tech experiment was it?
Jeevan Jeyaratnam, COO at Abelson Odds, makes the point, no pun intended, that “anyone can leave a market up” and the reason why people don’t is that a book can be found out quite quickly.
“Can you get picked off? Yes,” he said. “By keeping it up, they were open to scalping. So maybe they didn’t advertise it to avoid that. If no one knew about it, then they wouldn’t have been looking.”
By both Jeyaratnam and Barron’s reckoning, this was, then, a technical test to see how the technology worked in practice – but without the added stress of potentially being picked off by sharps alerted to the fact that PointsBet’s prices might be wrong at crucial points in the game.
“This was a trial to see whether the tech worked,” says Jeyaratnam while Barron adds that he doesn’t think the tech was “advanced enough.”
“It’s a timing issue,” he says. “They want to test it.”
Will the rest of the market follow the leader?
The problem for PointsBet with this experiment is that they have effectively given everyone six months’ notice of what their intentions are for the next NFL season.
“You would think that the others will go for this,” says Jeyaratnam. “This isn’t really a tech challenge. It’s about having a trader ready to keep the markets open.”
The problem, he says, comes down to latency. “In the U.S., you are handicapped by the feeds,” Jeyaratnam said.
“How can you discuss anything without discussing the latency issue? It’s critical,” Jeyaratnam said.
The way the books manage these things is they extend the bet-delay window for those who they think to have a faster feed or with an edge while keeping it open for the recreational bettors.
“That’s the key – the match-up of data to the client. It’s managing that where the tech comes in.”
The marriage of tech and trading team
Barron agrees. “You can keep relatively low limits,” he says. “That can be tricky. Then it is about marking up your smart customers; having the data processes for that. This will be wholly automated processes.”
The last conundrum is that although it will be the sharper end of the market that might look to pick operators off that are wrongly priced at key times during a game, it is the mass market that will be enticed by not having in-play bets rejected.
As Barron says, “what is becoming apparent is that the likes of Caesars, FanDuel and DraftKings are building such huge mass recreational businesses.”
They will be wanting to do what they can by the next NFL season to keep these customers satisfied rather than have to go to the huge expense of recruiting more customers.
In the words of one industry insider, they almost have nothing to lose.
“I’d be amazed if others didn’t follow the same path,” the insider suggested. “If this drops your margin by 1% but you counter that with lower CPAs, lower churn, less bonusing costs. Well, the case is made.”
