Pulse

PandaScore: taking a punt on esports means going ‘all in’

By William - 5 April 2022

With one major operator stating that esports betting turnover is second only to football and another saying the sport is knocking on the door of basketball, it is understandable esports stakeholders’ express frustration when their product is portrayed as niche.

Oliver Niner, Head of Sales at PandaScore, says esports shouldn’t be added onto a sportsbook to compensate for stagnated growth in other products or an inability to innovate due to little technological bandwidth and being hamstrung by regulation.

Esports is a product that works and is proven to be extremely popular when operators follow certain principles.

What are the key findings of the white paper?

We approached the white paper from the perspective of an operator looking to deliver a successful esports product. One of the paper’s key takeaways is that whilst there are different approaches to succeeding with esports, there are certain areas that need dealing with differently compared to a standard sportsbook product.

Essentially, through following certain principles operators can unlock their own esports customer base. We tried to be objective by not just sticking to partners who work with us, but also those who work with our competitors that have different working methodologies such as Pinnacle and Genius.

What is the next iteration for esports?

Digesting and understanding customer data. As a data supplier, we don’t have access to this information, and are keen to engage as and when the possibility arises. If we are currently at Mark III with esports, Mark IV will be about truly understanding what an esports bettor looks like and, most significantly, how they behave and cross-sell.

If we are at Mark III now, how do you reflect on the initial launch of esports and how the offering has evolved from a product perspective? The right product at the wrong time?

That’s exactly right. The likes of Pinnacle, Bet355, Rivalry, and Betway embraced esports early on and have done very well. They structured their offerings in a similar way that worked.

Then you have operators such as Sky Bet who went quite early and wanted esports to look like sports betting. They didn’t understand how the game was changing in media consumption and this is where several operators got it wrong.

Betting needs to be a good and pleasurable experience for the user, but it also must make operators money. Initially, esports didn’t do that.

Now you are starting to see products mature with improvements in technology and esports data providers such as PandaScore who know how to shape esports products based on specialist knowledge. Knowledge is power, and this has been demonstated through esports’ development over the last few years.

We know that esports acquisition is cheaper and player profiles are different from other verticals. The usual constraints operators work under such as being unable to cross-sell a casino player into sportsbook isn’t there with esports.

Why is the cost-per-acquisition for an esports bettor lower than a sportsbook?

As esports is relatively new, there is very little affiliation. There is minimal regional profiling from companies such as Catena and Better Collective – the latter is a massive esports website, yet it is still very restricted and hasn’t grown much to date. We understand what our average bet size is, but not the player value.

The market hasn’t developed sufficiently enough for the acquisition cost to rise. It will do, but we are now in a sweet spot. We are seeing growth and a low player acquisition cost, so it is a good moment to start embracing esports.

We live in a data-driven world and esports is a data-based product. It is the only product where there is no operational need to fetch the data.

What we don’t have is a settled market. Esports doesn’t have a fixed calendar like traditional sports. Operators need to accept there is an element of unpredictability with regards to pricing. We are only now starting to understand the full nature of what esports is.

The paper states that ‘esports is a hub of 21st-century pop culture’. What has been the impact of esports’ pop-culturalisation?

The culture surrounding esports is huge and currently, there is only a minor overlap with betting. The potential for a multi-billion industry integrating with the betting industry is huge.

In terms of that movement, we are early on. If you look at how integrated betting is with most sports, in some cases it powers them – the acquisition of data, advertising and partnerships. Esports is working in the other direction.

Operators can’t adopt a blanket esports approach – esports isn’t a territory waiting to regulate such as America. The gold rush is already happening. Esports isn’t a tab to put between darts and futsal. It is not a sport, but a multiple of sports.

Conversations around esports need to move on from whether this is going to be the year for esports. What do esports players like? What do they consume? What is the future of CS:GO? Why didn’t Overwatch work? How does Valorant catch up?

What is the future for esports in Brazil as licences are handed out? What’s the best way of acquiring esports players? How does affiliation work in esports? These are some of the topics we should be discussing.

From an integration perspective, how can operators make the process as painless as possible?

Work with a partner who understands your needs and what you are looking to achieve. Operator roadmaps and tech stacks are incredibly filled, mostly with compliance.

Most tier-one operators will make four or five decisions in their product roadmap for the following six-12 months and that’s it. Direct integrations must therefore be watertight and easy to understand.

If a direct integration isn’t possible, work with partners who have good access to esports data via aggregation platforms, hence our partnerships with Sporting Solutions and OpenBet.

Suppliers need to understand the pain points for operators and show that esports can be integrated with minimal costs in time and investment.

Why is there a hesitancy around esports?

People are afraid of esports because they don’t understand it, and this is another reason we wanted to publish the white paper. There are bodies such as ESIC and experts like ourselves who closely monitor betting behaviour.

The error rate isn’t nearly as high as the major sports. The data doesn’t back up the level of concern, so we have attempted to understand where this worry comes from and address it in the white paper. Taking a punt on esports means going all in.

What does going all in mean?

Suppliers need to take some responsibility for this and shouldn’t be throwing in esports as part of a package because it will never thrive. Putting the right effort in means making decent procurement decisions and doing it now because acquisitions costs will go up.

There will only be a certain number of operators per region who will do particularly well with esports. Ultimately, a holistic approach is required. Don’t treat esports as an afterthought because there is money to be made and good product to be created.