Paolo Personeni, Managing Director of Managed Trading Services (MTS) for Sportradar (pictured), highlights how capitalising on flexible third-party trading and risk management services will improve business performance for bookmakers.
Outsourcing trading and risk management has typically been taboo within our industry, with the assumption that operators that require third-party assistance have an inferior offering compared to others who may do all their trading and technology in-house. However, in today’s marketplace that is an outdated thought process that restricts companies from broadening and enhancing their offering.
Instead, it is now the case that bookmakers that choose to extend their trading capabilities by partnering with a third-party supplier that has the latest technology at its disposal can hold a competitive advantage.
Over the last few months, we have witnessed a surge in traditional bookmakers of all sizes actively outsourcing trading services as they revisit their business models to adjust to various influences. Much of this trend has been driven by the impact of Covid-19 on the sports betting sector, as well as the need to manage internal fixed costs.
These operators are no longer restricted to the constraints of purely in-house functions, instead understanding how the right balance between internal and external capabilities can be highly beneficial. Rather than seeing it simply as “outsourcing”, it is about establishing effective ongoing partnerships for now and the long term.
Following a challenging year that has turned the sports betting landscape on its head, now is the perfect time for bookmakers to revisit their overall offering, risk management and trading operations and consider how outsourcing could further enhance business operations and therefore profits.
Access to the latest technology
Utilising the support of third-party companies that specialise in specific fields of sports betting provides bookmakers with the ability to keep up with the latest technology.
Suppliers have the resources to ensure these are always up-to-date with technologies such as AI machine learning to guarantee operator clients are always at the forefront. As service providers, it is their job to constantly improve their services and technology at a more granular level and collect vast volumes of data on a regular basis.
As an organisation, we are working non-stop to constantly build on and improve our services with new features and functionalities that strengthen every one of our customers’ operations. This ensures that a serviced approach is the best way to manage larger trading data sets, and therefore provide more confidence in pricing. We are also making our external services smarter by using the latest in artificial intelligence and machine learning.
Expert knowledge on complex and long-tail sports
Events this year have stressed the importance of a diverse product offering for bookmakers. The emergence of esports showed its worth in value, particularly when operators had to contend with the sudden shutdown of live sports from March onwards.
For many, it will have highlighted whether they had sufficient trading expertise to service all aspects of an offering. Those who failed to seize the opportunity of external help from expert traders will have missed out on potential revenues.
The same can be said for trading on long-tail sports, such as table tennis. Bookmakers are less inclined to invest in trading capabilities for these events because of the lower margins, but outsourcing offers a cost-efficient way to capitalise on the revenues long-tail sports offer.
With bettors able to access vast volumes of data to help them make more in-formed betting decisions, thinly spread trading teams are at an increasing disadvantage and ultimately need the support of those that have superior knowledge across all kinds of sports. Specialist trading and risk management suppliers provide that expertise, as they have traders with specialist knowledge across a wide range of sports, including complex and long-tail sports.
With a huge year of sport just around the corner too, it is just as vital to ensure trading, risk management and associated operations are in place for the big premium sports that will draw plenty of attention from across the globe.
While many may already know how to trade on such sports, the advantage of being able to rely on experts to ensure speed and less margin for error is one of the best ways to be assured of less risk while being able to stand apart from the competition and tap into more revenue.
More flexible trading opportunities
While options still exist for those who require complete sportsbook management, as provided via MTS Full Trading Solution, there is far greater flexibility today in the types of services available that can expand an operator’s trading proficiencies and keep control in their own hands.
Operators can gain access to cutting-edge technology in a flexible manner when they outsource functions, meaning they can utilise it in their own way, as granular as they want and to whatever extent they need. The key with this approach is it enables bookmakers to differentiate themselves within the marketplace and in a cost-efficient way.
They can also shift trading responsibilities at a time when they need it most. MTS’ Integrated Trading Solution (ITS), for instance, enables bookmakers to integrate their trading rooms with Sportradar MTS’ to utilise trading and risk management support for emergency content or long-tail sports that are experiencing growth in activity, however and whenever required.
Additionally, they can also use it to support existing trading services for larger, premium sports in certain markets or where additional expertise or resources are required.
Outsourcing is now seen as a form of collaboration to produce strong results through risk management and tapping in to extra revenues streams. When it comes to sports betting, flexible external services provided by those companies with access to the latest technology and a wealth of experience is fundamental to guaranteeing the most effective trading for profitability and risk management.
It is now the time to embrace it and build effective partnerships to scale your business.