Over the last couple decades, sports betting has exploded in popularity across the globe. In 2020, the global sports betting market was valued at over $66 Billion USD and is expected to continue growing at a compound annual growth rate (CAGR) of 10.1% from 2021 – 2028. A number of factors led to the growth of sports betting worldwide including the rise of streaming platforms, more betting operators and apps popping up online, increased fan engagement through social media, rising median incomes, and a shift from black market betting to legal betting due to regulation in the industry.
Yet, many iGaming operators don’t offer a sportsbook to their customers in addition to their online casino games. Operators might not think it’s worth it to go through the hassle of incorporating a sportsbook into their sites, but the reality is that these operators are creating an unnecessary roadblock to their success. While there are rare instances where an operator cannot provide a sportsbook, in the majority of cases offering a sportsbook can attract and retain bettors in the long run. Not to mention expanding the potential revenue stream for your operation.
Lets go over a couple of the most common misconceptions and concerns operators have about sportsbooks, and reasons why they should add one to their platform.
Aren’t sportsbooks are prone to large variance swings?
In the past this certainly was true. Operators who were not able to identify sharp bettors and adequately manage risk were exposed to variance swings that could easily put them in the red if they carried too much weight on the losing side of a major betting event. However, this is not the case in the modern sports betting landscape.
Today, iGaming technology providers are able to offer risk management services, such as managed trading services, that effectively remove the risk of loss to operators. This is possible thanks to the ocean of data that now exists which enables accurate betting lines, and player profiling with machine learning to determine sharp bettors. Further, there is deep liquidity on global betting exchanges which make it easy to avoid carrying too much action on any given event.
Our customer base prefers casino games, why should we spend money adding a product they might not use frequently?
There will always be bettors who prefer casino games, and bettors who prefer sports betting. But regardless of primary preferences, many bettors enjoy wagering on both. They also prefer to have their betting needs met through a single provider that gives them a frictionless betting experience.
In an industry as competitive as iGaming, it pays to be a one-stop shop for your customers. If your customers wager on casino games 80% of the time, but bet on sports the other 20%, wagering on your platform becomes an inconvenience for them if you do not offer both. Even if sports betting is not a major revenue driver for your target audience, it plays a key role in retaining customers and maximizing revenue in the long term.
At the same time, it also offers cross-sell opportunities at little-to-no cost for the operator. Depending on the market you operate in, the cost to acquire a bettor for sportsbooks can be significant. DraftKings reportedly spends around $371 USD to acquire a single bettor to their sportsbook. The savings that an iGaming operator can get from cross-selling their sportsbook offering to their existing customer base is something that every online casino operator should take advantage of.
Additionally, a sportsbook provides an element of novelty to your customers. With different sporting events happening daily worldwide, there are always different matches which can be wagered on in advance or in real time. Plus, there are various prop bet options available for most of those matches. Bettors love having options that keep their betting experience exciting. If you are a casino operator, you know how important it is to add new games on a continuing basis in order to keep your players engaged. A sportsbook provides new wagerable events on a consistent basis without needing to purchase or build new casino games.
It simply makes sense for iGaming operators and online casinos to offer a sportsbook to their customers. Even if a small percentage of your players end up wagering with your sportsbook, the ROI can be substantial. If you want to learn more about adding a sportsbook to your existing operations, check out our other articles such as The Most Important Factors to Consider When Selecting Sportsbook Providers or contact us to learn about the costs and benefits of expanding your product suite.