BOS Speaker Profile: James Watson – Sportradar – The skins volcano

Esports form a notable part of the agenda at Betting on Sports (#bettingonsports) next month, and with a plethora of issues to discuss and debate it’s no great surprise why. 

James Watson, Sportradar
James Watson, Sportradar

One industry expert is Sportradar’s James Watson. James will be on a panel alongside Pavol Krasnovsky, founder of RTSmunity, exploring how live betting can work in an esports environment.

In advance of sports betting’s biggest conference this year we had a chat with James. Here’s what he had to say…

SBC: Can this decision and action by Valve be attributed to the extensive coverage of skins betting in the wider press, and the recent lawsuit? Was it something you expected?

James: The whole skins betting industry has been analogous to a dormant volcano waiting to erupt.

Everyone within the sector could see the negative side-effects of the skin-wagering platforms, be it the unregulated way they operate, the lack of KYC controls or the high-profile cases of match-fixing. Ultimately it was only a matter of time until these operations grew so significant that they started attracting some mainstream attention.

In reality, the individual components (including the lawsuit) were unlikely to have had a massive bearing on the decision. However, the fact that everything happened in quick succession, and very publicly at that, seemed to have created significant concern and pressure at Valve – something that the publisher could no longer dismiss.

SBC: Does this mean the end of skins betting? Valve can only do so much if it continues to allow third party sites to trade its in-game items after all…

James: We’re slowly seeing the skins betting websites begin to take real action as a result of the C&D letters sent direct from Valve, starting with the smaller operators but gradually building up to the most significant (and ultimately most valuable). These actions have ranged from outright shutdowns, to changes in currency (from skins to bitcoins), all the way to seeking legitimate gambling licenses. Following the recent UKGC statements, this is looking likely to be an uphill struggle.

Valve can very easily restrict the bots that trade items between betting sites and users, since they all have very unique IDs and behaviours. Whether or not they actually need to follow this action is a different question – since many operators are now taking the threat of reprise very seriously.

SBC: What will the knock on effects of this decision be for the wider esports gambling industry?

James: Many people attribute the growth of esports, and specifically of CS:GO, to the advent of esports skin wagering. There is certainly some truth to this, but the industry has now grown to a point where it is clearly self-sufficient enough to succeed without skins gambling being present.

The positives for the remainder of the regulated betting industry are clear for all to see. The turnover figures observed at skins betting websites have been substantial and operators in the regulated sphere are now finding that they are in pole position to pick up those individuals who may have bet skins before, but who are now looking for a safe and reliable way to bet on their favourite esport titles.

Betradar’s B2B services certainly aid this and our range of products and services have been designed to achieve regulated betting operator objectives while respecting and harnessing the characteristics that make esports unique.

Already our in-house experts, working closely with the likes of ESL, have developed data, streaming and odds solutions that will put our clients in pole position, while our work with ESL and ESIC have put us at the forefront of protecting the key esports competitions from match-fixing and manipulation.

SBC: Some commentators have estimated skins betting to be worth ten times as much as more traditional esports sports betting, where do you stand on this point?

James: It’s really difficult to have a totally accurate estimation of the turnover on skins platforms. There are many matches played across a plethora of different ability levels – ranging from professional all the way down to semi-pro and amateur level games.

In addition, the value of a single item is not fixed and is determined by the market – meaning that identical matches with identical items may have totally different turnover volumes. We can however say that there have been significant levels of wagers placed on these markets, and particularly for lower tier events, this has outweighed the rest of the betting industry by some margin.

Naturally with this turnover now not having a stable or regulated “home”, bookmakers operating within a regulated framework are well aware of the opportunity and are looking to ramp up their eSports offering to meet the demand of the market today and tomorrow.

SBC: How big of a market has esports been for Sportradar in 2016?

James: Esports has been positive for Sportradar this year, which is a direct reflection of the sector’s performance with our clients. Turnover continues to grow and margins are exceeding expectations month-on-month, with the Betradar suite of services clearly being one that appeals to the end users.

It has been clear to us that operators welcome our philosophy, which can be best characterised as championing and driving innovation around esports betting, but never at the financial or reputational cost of our clients. We secure the fastest and most reliable feeds, offer reliable markets, secure relationships with key stakeholders, but we refuse to offer markets or bets or products that we cannot be sure will provide consistent value.

SBC: Can you tell us more about the esports live betting panel you’ll be on at Betting on Sports in September?

James: We are excited to join this panel! Betting on Sports allows us and attendees to explore the landscape around a range of sports in more detail and unpack the opportunities and threats. All the esports are different and require a bespoke approach to data, audiovisuals, markets and odds. So it is important to underline that critical nuance.

But the concept on everyone in the industry’s lips is “live esports betting”. And of course that is a truly exciting proposition. There are some live markets that are well-suited for offering as at today because they can be offered accurately, reliably and profitably. But we do raise a word of caution: not all live markets are ready to be offered and we will be looking at how unnecessary risks can be managed and avoided.

Check out the Betting on Sports today. Three esports panels, fifty plus speakers and much more all under one roof…

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