by Niki Metzgar-Schall
Oil might have been the single most important wealth creator since the 1900s, but data is expected to be the driving force powering growth in the 21st century. The rise of data analytics has revolutionized various sectors, including sports betting, where understanding and leveraging customer data has become crucial for success.
It’s been six years since the U.S. Supreme Court opened the door for legal sports betting and the industry took off like a rocket. In Indian Country, tribes of all sizes currently offer sports betting in 22 states; many others are poised to move quickly to add sports betting offerings when it becomes legal in their jurisdictions.
In areas where sports betting has become legal, operators hit the ground running, moving as quickly as possible. The working theory was that moving quickly, rushing into the market, and acquiring as many customers as possible would yield a large group of customers who are new to sports betting. The assumption was that those new customers do not bet offshore and likely aren’t experts in evaluating a trade, so therefore you could easily capture recreational customers and make money. The ensuing years have shown that is simply not the case, and it would be wise to be wary of any third-party vendor who suggests otherwise. Now is the moment to take a beat and understand just how much can be gained from evaluating data to effectively manage and fine-tune sports betting offerings, negotiate better contracts and understand the real margins, in a granular way, based on your own data.
Whether your tribe is all-in on sports betting, considering adding it or waiting for it to become legal in your state, understanding the actual cost of sportsbooks for your unique operation – or operations – means gaining decision-making power. When the vast majority of sportsbooks are offered by a couple of large, dominant companies, and profit margins are narrow, strategy and expertise make a significant difference.
This moment in time is a unique inflection point. New tools have emerged, designed to gain insights from data. These tools can help ensure that every customer is rated for skill, every market is assessed for efficiency and every third-party supplier is held to account for the services they provide.
Leveraging sports betting appropriately for each unique property or customer group is not easy. Small operators are considering exiting the market, and new operators are rightfully taking a cautious approach as they determine what their offerings will look like. Data analysis, on a deep level, could be a game changer.
The availability of new advanced tools for data analysis offers tribal operators the opportunity to gain a competitive edge in the market. By tracking metrics such as customer lifetime value, cost of acquisition and market occupancy, operators can make informed decisions when negotiating contracts and developing long-term strategies for sustainable profitability.
This unique data analysis is possible because sports betting behaviors are trackable. Customer betting data from the sportsbook operator can be uploaded, such as bet slip information (e.g., pricing and odds, stake, market, event, etc.); and generate analytics reports used to better understand trading and risk management strategies, improve trading performance and optimize their overall operational efficiency.
Advanced data analysis can also reveal whether product offerings are a good fit for a customer base. This is not a one-size-fits-all business. A tribe with multiple properties may find that customers at one property respond very differently than customers of another nearby property. From learning about habits, motivation and what excites a customer, offerings can be tailored to customers’ desires and deployed based on known betting behaviors.
The ability to identify and track individual players in real-time provides operators with a deeper understanding of their customer base. Moreover, the capability to analyze behavioral analytics plays a crucial role in identifying and addressing problem gambling behaviors. Beyond enhancing customer experience, data analytics also empowers operators to optimize their risk management strategies and trading performance. By leveraging real-time data insights, operators can make informed decisions to manage risk effectively and adjust pricing and odds dynamically.
As tribal operators navigate the complexities of the sports betting landscape, embracing data analytics presents a significant opportunity to unlock the full potential of customer data. While oil has driven growth and innovation, in its unrefined state it is virtually worthless. This is where the most interesting parallel with data exists. Ninety percent of the world’s data has been created in the last two years, and operators are now sitting on a huge wealth of potential value given to them through the information provided via the betting activity of their customer base, but they need the right tools to refine it.
Niki Metzgar-Schall is Executive Vice President of Corporate Development at 10star. She can be reached by calling (917) 771-2845 or email [email protected].