Successful Operator 101
Going through the bare minimum required to be successful
Edition 35: The End of History?: Betting Edition
A look at the innovation valley in sports gambling
Happy March Madness Week Two! This week, we’re going to take a look at the innovation valley in betting on American sports.
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Let’s dive in.
We’re going to approach it from the perspective of a consumer looking to make their first account. One who probably isn’t as familiar with the gambling landscape as readers of a newsletter like this are. We are going to follow this hypothetical consumer on their journey as they evaluate their key depositing criteria (a play on the more traditional KPCs). With that, let’s dive into the criteria.
The first criteria any novice bettor will look for is having both a functioning app and website. Some people are glued to their phones, some people prefer larger computer screens. There is pretty much no correlation with what screen a person uses and wanting to gamble. As a result, competent operators need to have a well functioning app and a sleek looking website. For first time depositors, especially those who might be a bit older, it’s incredibly important that the website doesn’t look sketchy. There is no hard and fast criteria for “sketchy”, but it’s pretty obvious when a website is sketchy. A good website won’t have functionalities that are half baked. It’ll be seamless to navigate and be seemingly as reliable as any online shopping website. Ideally, it also means that consumers have had some exposure to the brand prior to trying to deposit money.
Next, we’ll pretend that our hypothetical consumer has found a website and has decided that they wanted to make an account. In all likelihood, they will have to go through some Know-Your-Costomer (KYC) protocols. They might get a few questions, or have to upload a picture of their drivers license or proof of identification, depending on the associated state that they are located in. We cannot emphasize how important it is to make this smooth and seamless. I know multiple people who remained on PPH books in legal states because the KYC process was taking too long with no end in sight. Frankly, KYC is important and will always represent an extra friction. But if it’s a Friday night and we convince one of my buddies to make an account but then the operator tells him there’s no chance he’s placing a wager before Monday during the fall of an NFL season due to the need for document review. What’s he to do?Absolutely unacceptable. (Yes this actually happened, no we won’t be naming names). Operators need to figure it out, have more staff on hand, streamline the process, increase automation, but don’t leave new customers in limbo for undefined amounts of time on non business days. That’s when most of the gambling happens in the US. Streamlining this should be an absolute priority for every operator.
Third, there needs to be a smooth and seamless depositing process. As with any business, convincing consumers to hand over money is the hard part. Make it easier by making the deposit process effortless. Thanks to online banking, we’ve generally found that even the lowest level operators have smooth deposit and withdrawal processes. Again, we’re talking from the perspective of your average -EV bettor, not a professional. As long as the withdrawals and total deposits are not too large sums of money, most people won’t have anything to worry about.
Now once inside the app, two things that we think are key that some operators do much better than others. First, easy and painless navigation to games currently happening or about to start. Sometimes, we’re just looking for a little sweat while we’re stuck on a train or at a bar with some friends. That usually means finding a game that’s about to start that we can watch and getting a little bit of action down. Some operators make it easier than others to find this. Again, this isn’t really key and is something that would ideally be customizable anyway, but just something that we think is a nice perk. Second, we like to easily be able to navigate to our currently open bets. Again, some operators make it harder to find this tab. Ideally, I’d love to be able to see my open bets without having to log-in every time. In the current regulatory environment, that’s unlikely but we can dream. Logging in with MFA just to keep track of bets on college basketball Saturday is tough.
In terms of actual market options, this is pretty obvious, but operators just can’t stand out from each other in a bad way. This is going to sound anti-innovation, but as long as each operator has relatively similar offerings, even if they have different prices, consumers will be happy. They just need to be able to take the same bet that their friend suggested to them in the group chat and the odds need to be within the same order of magnitude, especially if it’s a long shot bet. This means having a functioning engine for Same Game Parlays. It means having an inplay engine that works competently. It means having as many random league as the other major operators do. Obviously, there’s some limits to this, but losing a customer because they wanted to tail their friends Romanian soccer bet and their original operator didn’t have it would be unforunate.
Now, I’m quickly going to run through some things that we could have included, but left out because we don’t think they are super important (at least for a young consumers). First, a robust rewards program. Sure, everyone loves free stuff and will take it when offered, but for the most part people are coming from PPH shops where they were lucky to get paid on time, let alone get rebates or cool stuff. Same idea with incredibly robust social functionality. Sure I like sharing bets with my friends, but I’m not throwing my bets up on my Instagram feed so all of my acquaintances from various walks of life can see that I’m betting on Horizon League college basketball. Not that there’s anything wrong with that of course, it’s just not the type of thing anyone wants to advertise to everyone they know. Operators think this one Is important, but they overrate it in terms of key depositing criteria. Finally, it also really really pains us to say this, but honestly good prices aren’t super important either. Obviously, if you aren’t prepared to deal -110, you will get run out of the market, but for long shot future bets, it’s okay to up the hold percentage and get away with it as long as it’s close-ish to where the market is. Close-ish isn’t exactly a technical term, but generally with 10-20% would seem sufficient to us for close enough that someone would just say oh well I’ll take the bet here at worse odds. Generally, the friction in the market means that a consumer won’t make a new account just to take advantage of that number. We wish it weren’t so.
Overall, this isn’t a full list of conditions, nor is it one that every operator satisfies. Yet, we hope it provides a jumping off point of where operators should be looking and prioritizing during their initial attempt to gain a foothold in the market
Miscellaneous Content Consumption
Check out a new newsletter! It’s taking look at esports and betting, which is a topic we don’t know much about so we think Sharpr is making a valuable contribution.
Nascar gambling podcast. Of course the podcast itself is good (dated by now), but we are interested to see if the fan arrow can move in both directions. (Gamble on a sport because you watch it originally, watch a sport because you gamble on it when you are bored).
If you have any questions or comments, we love to chat and our info is below!
