BUSINESS

Sporting Events Bring Mixed Success

TAGs: bookmakers, Euro 2012, London Olympics, Lorien Pilling, Online Gambling, sportsbooks, UK

Sporting Events Olympics UEFA 2012 Bring Mixed SuccessThis summer is being billed as a season of sport, particularly within the UK, with the European Football Championships currently taking place and the Olympics fast approaching.

These two events are described by UK media regulators OfCom as Category A events as they must be viewable on free to air television. Other events on the list include the Wimbledon Tennis Championships finals, the Rugby World Cup Final and the FIFA World Cup among others.

There is also a list of Category B events where highlights must be available on free to air television. Events in this list include The Open, the US Open golf, the Commonwealth Games and the rugby Six Nations.

As a group, all of these events can be described as ‘listed events’ as they are protected on terrestrial television. In a more practical sense, they provide us with a list of what can be considered the biggest sporting events, especially within the UK.

Across both categories, there are 18 different events, most of which take place annually. Category A events alone span eleven weeks and one day which leads to a very busy sporting calendar that continues to attract larger audiences.

This means that the effect of these sporting events on online gambling operators is becoming increasingly important. This looks set to continue as these sporting events take up more of the calendar year.

On the face of it, this will be good news for online gambling, particularly sportsbook operators. In financial results published by publicly listed bookmakers, mentions to ‘major tournaments’ are commonly found. They are taken into consideration with bookmakers often putting up far bigger numbers in years where there has been a listed event, particularly in the case of the football World Cups and the European Championships currently under way.

Obviously, sportsbook operators are all too happy to have major sporting events bringing in new punters. The volume of bets can increase massively during a busy period and all of these bets must be coming from a larger customer base.

But even for those who should be profiting most from these events, not everything is all hunky dory. To begin with, the quality of player that tends to be attracted by these events is low. These customers wouldn’t usually bet and are only doing so because there’s a buzz about the event in question.

Similarly, to customers who take advantage of no-deposit bonuses, once their original enthusiasm and encouragement fades, they often fail to continue playing. Not only does this type of customer tend to leave quickly but they also make small bets. A prime example is with the Grand National, which lures many irregular punters out from the woodwork. Unfortunately, though, once the race is over they tend to crawl back in.

Here is where the onus is placed squarely with the operators as it’s up to them to hold onto players that are enticed through their online doors by the allure of big tournament betting.

Plus, it’s worth remembering that while revenue does grow during these periods, it’s not necessarily linked to increased profit. Bookmakers are still very much dependant on results and it will not be a surprise if we hear operators in a few weeks moaning that they ‘had a very bad tournament’.

Lorien Pilling of Global Betting and Gaming Consultants explains that this is unavoidable. He says: “Sporting results at major events will always determine their impact and benefit to a sports book.”

Pilling draws attention to Ladbrokes who haven’t always enjoyed the major football tournaments of the past ten years. During the 2002 World Cup and the 2008 Euros, the company’s retail division experienced a gross win contribution of just £3.6 million, which equated to 12.6% and 12.2% respectively.

So if online sportsbooks can’t even turn listed events into cash cows then surely other gaming products such as casino, bingo and poker have no chance.

On the face of it this appears to be the case. Pilling investigated the amount of poker play during the 2010 World Cup and his findings show that they certainly suffered at the hands of sport. Bwin saw a 14.5% decrease in poker revenue which the attributed to the World Cup while Ladbrokes saw their liquidity drop by 20% during the tournament.

But these decreases aren’t only caused by the sporting events taking place. As Pilling explains, they regularly fall at a time when iGaming traditionally struggles anyway.

He says: “But summer sports events coincide with the summer – a period when e-gaming has its seasonal dip in any case because people are on holiday/outside in sunshine (such as it is!), so determining how much is down to the sports event is harder to quantify.”

The impact of listed events on the use of gaming products is clearly something that operators are well aware of. Many of them have adopted an ‘if you can’t beat them join them’ approach with promotions being themed around the event of the time.

One of the primary users of this tactic is 32Red who certainly aren’t known for their sports betting product. Their flagship product, the casino, will regularly offer promotions around a sporting event such as the Euro 2012 Bonus Shootout and other Euro 2012 promotions which can currently be seen on their site.

As there’s little chance of these events, particularly the football ones, losing popularity, these tactics are going to have to become more commonplace if iGaming operators want to perform strongly throughout the year.

Even for the reputable sportsbook operators, while large sporting events do cause a flurry of activity, the importance of scores mean that they still remain a lottery. And given the ever-burgeoning popularity of sport, it’s a lottery which is going to become more regular.

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