Can Sports Betting Operators Win Over The Esports Audience?

The battle for esports betting between some familiar names in sports-betting and a handful of esports-only operations is on. In the race to pick up customers, which is likely to be the right approach to win over the esports audience?

One aspect of the near-total shutdown of all sports when the Covid-19 crisis first struck earlier this year is that it created an unintentional testing period to try out some previously hard to judge hypotheticals.

One example is the extent to which traditional sports bettors might be persuaded to switch to betting on esports given the right circumstances. The backdrop may have been extraordinary – no one would have ever guessed that we would end up with no sports at all for many weeks – but the results are worth investigating.

“Our numbers were growing at between 30-40% monthly before Covid-19, and then we got a nice bump,” says Steven Salz, Chief Executive Officer and Founder of esports-betting operator Rivalry. “The lockdown period accelerated six months of growth in 30 days. But what we see is that the people that came in at that point were exactly the same audience as was being attracted to us previously. We just saw more volume of the same types of user.”

A somewhat similar situation occurred at Pinnacle, suggests trading director Marco Blume, who tells of one relatively high-roller who “all of a sudden” during the sporting drought switched to make a bet on esports. The individual in question “needed something to bet on.” “Subsequently, they quickly went back to traditional sport,” he says. “There was no pull on the part of the mass-market customers.”

Different Strokes

Defining who makes up the esports audience – and then identifying within that cohort those likely to be enticed by the opportunity to bet on esports – has always been of vital interest. The recent Covid-19 crisis and its attendant lockdowns hasn’t altered that.

Mark Balch, vice president for esports betting services at Bayes Esports, says the nature of esports fandom distinguishes the audience from that for traditional sports-betting and makes them a tough crowd to sell to.

“The current audience is 30-something or below, and they are highly-tuned technical experts,” he says. “It is a generation that has been using tech products all their lives. If they play a video game that they think is bad, they never go back, and it will be the same with betting products. They are a harsh audience.”

Moritz Maurer, chief executive at esports data provider GRID, agrees and suggests esports bettors represent “a new breed of customers who are really demanding when it comes to the experience” of betting. Whether an operator comes from the realm of traditional sports-betting or is esports-focused, it means that what has gone before is likely not going to be enough to slap an esports label on an existing framework.

Salz says his company looked at other sectors for how they could adapt to the challenge of attracting the next generation of consumers, and he says it was the rise of robo-advisers in the consumer financial space that provided pointers.

“This is a high-volume, lower-value user market relative to a traditional sports punter,” he says. “The reason fintech has been successful is that it creates a brand and funnel that is much friendlier and creates a significantly easier onboarding experience.”

From there, he adds, Rivalry has looked at things like the bet slip, “redesigning that and gamifying it” and generally making the site feel similar to the sites where users play the games on themselves.

Data Exposure

A huge part of getting the appeal right in esports comes from the data. Flavien Guillocheau, chief executive at PandaScore, points out that when it comes to esports, as opposed to traditional sports, the scoring system is changing every minute leading to an experience that is more intense than with traditional sports. “It is data-driven content,” he says.

Balch says the way to understand it is to see that data in esports ages quicker than in traditional sports. Bayes Esports is a joint venture of Sportradar and Bayes Holding, formerly DOJO Madness, and Balch says that the company aims to take the experience of Sportradar in traditional sports and adapt it to the faster world of esports. “The imperative is to react quickly,” he says. “The challenge for a supplier is we have to cater for every demand.”

That includes adapting to how quickly the nature of the games themselves change. “In traditional sports, the players and the teams change, but in esports the game itself can change,” he adds.

“Esports is fundamentally not repetitive. It changes every single year. That’s gaming; that’s built into the ecosystem. The publishers and game developers are constantly trying to keep the games fresh, so we have no choice but to try and keep up. You have to change the product, update it all the time and patch it.”

The challenge for any bookmaker looking at esports is to understand how to respond to the demands of the audience in an authentic fashion. “It’s really about being nimble,” says Salz. “But it’s also about understanding the space.”

He points out that his team “know” the esports community and hires from it. “We haven’t just landed in the sector,” he adds. “The traditional sports-betting operators can only work with the audience they already have – whereas we are working with a completely new demographic.”

Blume expresses similar sentiments. “Esports has a unique language,” he notes. “The product does have to be attuned to the audience. There is no secret recipe when it comes to betting, but a few things are different with esports. You can definitely fail in esports, and I think that is because operators don’t have anyone in the company that is an esports champion within it.”

To put it another way, you have to be in the world of esports to have a chance of capturing the audience. “We are not betting guys who saw an opportunity,” concludes Salz. “We are esports guys and investment guys who saw a betting opportunity.”