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Why in-play wagering is the next frontier for the fledgling US sports betting market | Jamie Gardner

Confidence in the US sports gambling gold rush remains high as more and more states move towards making mobile and even television screen betting legal.

The SBC Summit North America took place in New Jersey in mid-July as industry executives continue to examine and discuss the opportunities and challenges that lie ahead in this potentially vast and mostly untapped market.

The 2018 Supreme Court decision to strike down a federal law which had effectively made sports betting illegal in all but a small handful of states has opened things up, but as each state’s legislature takes a different approach to the issue, patience remains key.

Hugo Sharman, the chief executive of StreamAMG, which provides over-the-top (OTT) technology, services and expertise to content owners and rights holders in sports and betting, attended the SBC Summit and told me: “There are almost 30 states that have opened up and the general mood music was that it is going to take years to happen.

“The states have to agree their terms and the right sort of legalities on tax and governance – such as how many sportsbooks are taxed on their gambling revenues and how many sportsbooks are allowed to operate. There’s also a push now for some states to legalize online casinos.

“A senior industry executive who spoke at the conference said that nobody’s making any money now, everyone is in the network.

“Everyone’s investing a huge amount in getting their brand out there, positioning themselves. Companies like DraftKings, FanDuel and Caesars and so on have spent a huge amount over a long period of time to get their brand in the market, and it’s very much a long-term play for them.

“There’s such a high population, there’s such a strong existing fantasy market in sports. They already know what the overall consumption levels are going to be.”

Sharman identified one area already proving a challenge for gaming companies – the cost of acquiring live video rights to leverage the growing popularity of live or in-play wagering.

“The opportunity there is around creating more interactive video with data and streaming to create a more immersive and engaging environment,” he said.

“One of the challenges at the moment is the rights fees – the value of the live video rights is too high at the moment. That’s putting some people off and I think there needs to be a recalibration of the live rights fees into betting operators. That will probably have to come down if it’s to go mainstream.”

On the flipside, the immaturity of the in-play market in the US is seen by many of those who have already invested so heavily as a huge growth area.

Sharman added: “People [in the US] tend to place a bet before an event and then just sit back and wait for that to happen, whereas in the UK and European market, which is much more mature, there’s a strong in-play market on things like next goalscorer etc.

“People are confident that it will play out as well in the US and you will start to see that sort of maturity come into the market.”

Possibly the most interesting – but also most controversial – new frontier could be mainstream media’s appetite to enter the betting business.

This would mean bringing the betting experience ‘into the family living room’ and offering the ability to watch live content with live odds data on the big screen.

Sharman added: “One of the most interesting market opportunities driven by innovative technology and the convergence of entertainment and sports betting is new rights categories such as interactive overlay rights.

“Peter Scott of Warner Bros Discovery talked to how this new interactive right segment, along with sophisticated ecommerce functionality, is adding real value to rights holders and owners.”

There are sure to be wildly different approaches from lawmakers, industry watchdogs, leagues, sports organizations and TV rights holders to tackling the moral dilemma of placing gambling so overtly into people’s homes, potentially in the full view of children watching sport with their parents.

Certainly in the UK, where the Gambling Act 2005 is being reviewed with a view to tackling some of the most egregious gambling-related harms, such a move would be unthinkable.

Media giants are looking very closely at the sort of opportunities which could open up in this space in the US, with StreamAMG well placed to partner such companies thanks to its streaming infrastructure expertise.

Before 2018 there was reluctance from the major professional and college sports rights holders in the US towards the potential deregulation of sports betting, chiefly around the impact on integrity.

Sharman said that judging from the representation of sports bodies at the SBC Summit, those misgivings seemed to be softening, with the National Football League (NFL), Ultimate Fighting Championship (UFC), Nascar and Major League Soccer (MLS) all represented in New Sweater. Since the 2018 Supreme Court ruling, however, leagues, teams, sports organizations and media companies have gone all in on partnerships with sportsbooks and other stakeholders in the betting industry.

“Integrity is still a huge concern, but equally the market and sports rights holders recognize the commercial opportunity,” he added.

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