Blog Archives

Teaming reign: A brief look at marketing convergence in online sports betting

The marketing cycle of a typical online betting firm aptly illustrates the converging nature of sports and its neighbouring industries. For instance, consider the following football narrative. A betting site buys advertisement space in a national newspaper. The online edition of that newspaper accompanies the advertisement with an active link. If a user clicks on it and access the betting site, the newspaper as an affiliate marketer will get 30% of the money that user has lost betting. In order to boost the number of users clicking on it, the paper publishes next to it a news article featuring Real Madrid on the eve of a match against Manchester United with the following headline: ‘Cristiano Ronaldo scored in 4 of his last 5 visits to Old Trafford’. Now, the journalist shares the link to that piece of news on Twitter, predicting a goal from Ronaldo, with a non-negligible likelihood that he or she is in business with a betting company, according to what was found in a 2014 sample of the ten most followed sports journalists in Spain.

The tweet might be read by someone at home, or even in the stands of a stadium as the game is being played, in which case a betting company might have sponsored the installation of high-speed Wi-Fi connection to facilitate bets. The bet will be preferably made in the proprietary app of the team, who partnered with the betting firm for an amount of money in exchange for adorning the stadium with the brand’s logo, although exclusivity in the electronic banners surrounding the pitch is not possible since the home team must comply with the different betting partners of the league.

Generating-Income-from-Sports-Betting-Affiliate-Programs

Chances are that those at home watching the game on television will hear a litany of statistics about the game delivered by the commentators, provided by a data company like Perform or Dimension Data, who in turn also provide those same data to betting companies, and which are also in a partnership with the league. It is these same data that will inform a fantasy league competition, which also sponsors the league. It might be the case that among the members of the family watching the game at home there are minors who cannot legally gamble for money, for whom a social gaming alternative is also available that can smooth the transition towards real money gambling in the future.

Also, for some demographic groups, sports betting might not be as appealing as eSports, but sport teams have already started sponsoring players in those competitions. When the match has finished, fans can watch further gambling commercials such as ones related to poker, conveniently introduced by sportsmen such as Neymar, Rafael Nadal or Cristiano Ronaldo, or indulge themselves in a little trading in the forex market company Xtrade endorsed by Cristiano Ronaldo himself.

A potential downside of such convergence might be the errors derived by a faulty identification of each product’s category and characteristics. The border between not-for-real-money social gaming on sports and real money gambling might not be obvious, especially when gambling gradually approaches gaming with more gamification attributes being added to the betting experience, and simultaneously, gaming approaches gambling by implementing real or virtual money in-app micro purchases or simulating gambling environments. Blurred lines might impact the understanding of what is information and what is promotion, as has been observed with children having problems distinguishing gambling advertising from non-advertising content (as demonstrated by Helena Sandberg and her colleagues in a 2011 issue of the International Journal of Communication). Another downside could be the transference of positive attributes from sport to other markets (most notably financial trading or poker in the example above), that buy their way into the mental association by, for instance, becoming a named sponsor of a sporting competition.

However, neither the situational and structural characteristics nor the cross-marketing convergence act as singular factors determining online betting behaviour. More likely, they work by aggregation, populating a marketing and advertising ecosystem that far from curtailing other gambling motivating factors – individual factors such as the biological, psychological or social characteristics of the gambler – it facilitates them.

(Please not that this article was co-written with Dr. Hibai Lopez-Gonzalez).

Dr. Mark Griffiths, Professor of Behavioural Addiction, International Gaming Research Unit, Nottingham Trent University, Nottingham, UK

Further reading

Deans, E.G., Thomas, S.L,. Derevensky, J. & Daube, M. (2017) The influence of marketing on the sports betting attitudes and consumption behaviours of young men: implications for harm reduction and prevention strategies. Harm Reduction Journal, 14(5). doi:10.1186/s12954-017-0131-8.

Deans, E.G., Thomas, S.L,. Daube, M. & Derevensky J (2016) The role of peer influences on the normalisation of sports wagering: a qualitative study of Australian men. Addiction Research & Theory. doi: 10.1080/16066359.2016.1205042.

Gainsbury, S.M., Delfabbro, P., King, D.L., et al. (2016) An exploratory study of gambling operators’ use of social media and the latent messages conveyed. Journal of Gambling Studies, 32, 125–141.

Gordon, R. & Chapman, M. (2014). Brand community and sports betting in Australia. Victoria, Australia: Victorian Responsible Gambling Foundation.

Hing, N. (2014). Sports betting and advertising (AGRC Discussion Paper No. 4). Melbourne: Australian Gambling Research Centre.

Hing, N., Lamont, M., Vitartas, P., et al. (2015). Sports-embedded gambling promotions: A study of exposure, sports betting intention and problem gambling amongst adults. International Journal of Mental Health and Addiction, 13(1), 115–135..

Lopez-Gonzalez, H., Estevez, A. & Griffiths, M.D. (2017). Marketing and advertising online sports betting: A problem gambling perspective. Journal of Sport and Social Issues, in press.

Lopez-Gonzalez, H. & Griffiths, M.D. (2016). Is European online gambling regulation adequately addressing in-play betting advertising? Gaming Law Review and Economics, 20, 495-503.

Lopez-Gonzalez, H., Estevez, A. & Griffiths, M.D. (2017). Marketing and advertising online sports betting: A problem gambling perspective. Journal of Sport and Social Issues, 41, 256-272.

Lopez-Gonzalez, H., Estévez, A. & Griffiths, M.D. (2017). Controlling the illusion of control: A grounded theory of sports betting advertising in the UK. International Gambling Studies, in press.

Lopez-Gonzalez, H. & Griffiths, M.D. (2017). Betting, forex trading, and fantasy gaming sponsorships – A responsible marketing inquiry into the ‘gamblification’ of English football. International Journal of Mental Health and Addiction, in press.

Lopez-Gonzalez,Generating-Income-from-Sports-Betting-Affiliate-Programs H. & Griffiths, M.D. (2017). Understanding the convergence of online sports betting markets. International Review for the Sociology of Sport, in press.

Lopez-Gonzalez, H., Guerrero-Sole, F. & Griffiths, M.D. (2017). A content analysis of how ‘normal’ sports betting behaviour is represented in gambling advertising. Addiction Research and Theory, in press.

Lopez-Gonzalez, H. & Tulloch, C.D. (2015) Enhancing media sport consumption: Online gambling in European football. Media International Australia, 155, 130–139.

Sandberg, H., Gidlof, K. & Holmberg, N. (2011). Children’s exposure to and perceptions of online advertising. International Journal of Communication, 5, 21–50.

Game on: A brief look at gambling on eSports

Like daily fantasy sports, betting on eSports (i.e., professional video gaming) has increased in popularity over the last few years and has given rise to allegations of unregulated and underage gambling. The eSports market is large. According to a 2016 report by Superdata, professional eSports is growing exponentially and is worth an estimated $612 (US) million a year. Furthermore, Eilers and Krejcik Gaming estimate that real money betting on eSports betting will reach $10 billion (US) by 2020. The professionalization and sportification of this entertainment form has brought sports-world elements to it: stadium-like facilities, cheering stands, sponsors, big rewards, and competition. Instant replays, jumbotrons (i.e., super-huge television screens), and referees add to the sport dramatisation. In some notorious cases, prizes have gone beyond the $10 million [US] threshold in a packed arena housing 73,000 fans. According to by John McMullan and Delthia Miller in a 2008 issue of the Journal of Gambling Issues, sportification is the process of incorporating the logics of sport to non-sporting contexts (e.g., poker, eSports. This can materialise in many ways but most commonly occurs when (i) other industries capitalise on the positive attributes of sport (e.g., popularity, engagement, or sanity and health inferences); and (ii) non-sport fields try to increase the entertainment and playability of their products and their association with joy and excitement.

e-sports-1-66204

Twitch, an online platform that streams live video gaming, informs its’ advertisers that it has 100 million monthly viewers, who watch for an average of 106 minutes a day. Betting on eSports presents new challenges. As a news report in Bloomberg news observed in relation to betting on the game Counterstrike: Global Offensive (CSGO):

“Gambling – licensed, regulated, and by adults – is generally accepted in eSports. There is growing concern, though, that teenagers are being attracted to different forms of betting facilitated by third-party providers. One such platform is CSGO Lounge (an independent site not affiliated with Valve Software, which develops the game itself). The site allows spectators to bet in-game add-ons known as skins – weapons, tools and the like – on the results of matches. Not all skins are created equal, and the rarity of some means they can cost hundreds of real dollars on marketplace sites like SkinXchange.com. The temptation is too much for some”.

Put simply, skin gambling is the use of virtual goods and items (typically cosmetic elements that have no direct influence on gameplay) as virtual currency to bet on the outcome of professional matches. The Bloomberg article also claims on the basis of interviews with industry insiders that underage skin gambling is a “huge problem”. Justin Carlson (lead developer of SkinXchange) claims there are “countless” parents whose children have used their credit cards without their knowledge to buy skins and bet on gaming on other sites. Although anecdotal, Carlson claims that some minors have “racked up hundreds or thousands of dollars in skins on ‘SkinXchange’ just to lose them all on some betting or jackpot site”. It’s clear that people trading skins in eSports has grown over the last few years and various regulators around the world – such as the UK Gambling Commission (UKGC) – are considering regulation and says it is an “emerging product” and an “area for continuing future focus”. More specifically, the UKGC’s 2016 Annual Report notes:

 “The growing market in esports and computer gaming has scope to present issues for regulation and player protection – issues which are being examined by gambling regulators in other international markets…These issues range from the emergence of real money esports betting markets, to trading in-game items which blur the lines between gambling and social gaming. Our focus will be to understand developments, including engaging with key stakeholders, and we will work wherever we can to ensure the risks associated with these, particularly to children and young people, are minimised”.

One of the complicating factors for eSports gambling is that while cash is the currency for many gamblers, there is a growing trend towards the use of virtual currencies, or ‘in-game items’ which, according to the UKGC, can be “won, traded, sold or used as virtual currency to gamble with and converted into money or money’s worth”. These, according to the UKGC, “include digital commodities (such as ‘skins’) which can be won or purchased within the confines of computer games and can then be used as a form of virtual currency on a growing number of gambling websites”. No academic research has examined underage skin gambling but this is an issue that is unlikely to diminish over the coming years.

It is also worth noting that this massive interest in eSports followed by a massive audience has led most major betting operators to include eSports in their daily gambling offer. However, the singularities of eSports market pose new challenges that conventional online betting sites struggle to address. Suraj Gosai, co-founder of Blinkpool, an eSports dedicated betting platform, laid out two main problems: in-play betting limitations and odds algorithmic programming. For in-play betting to be viable, companies need to get access to reliable, instantaneous, and unambiguous data that can settle bets and separate winners from losers. Data companies like Perform do that in sport, and betting operators rely on their data to offer in-play action to gamblers. The problem in eSports is that actions are not as quantified and standardised as in real-life sports. To counteract that, Blinkpool created a computer vision technology that extracts data from real-time action and promotes hyper-contextual opportunities, that is, 10- to 45-second in-play betting mini-markets concerning very specific developments in the narrative of the games.

Odds programming in sports betting is fundamentally based on historical data from hundreds of thousands of games, from which each factor (home advantage, table position, head-to-head, etc.) is weighted in to determine the probability of an event occurring. In the fixed-odds betting market, the bookmaker makes available to bettors that probability plus a benefit margin. When placing a bet, an individual bets against the probability that the house has predicted. This is not yet feasible in eSports because the historical data are scarce and the modelling is complex. Companies are circumventing this problem by offering exchange betting rather than fixed-odds. This method comprises peer betting, that is, bettors do not bet against the house but between one another. This way, the house gets a commission from winning bets and operates a much less risky business.

Dr. Mark Griffiths, Professor of Behavioural Addictions, International Gaming Research Unit, Nottingham Trent University, Nottingham, UK

Further reading

Bracken, G. (2016). We hope to be the home of eSports betting. Gambling Insider. Available from: https://www.gamblinginsider.com/in-depth/1909/we-hope-to-be-the-home-of-esports-betting

Gambling Commission (2015). Explaining our approach to social gaming. Located at: http://www.gamblingcommission.gov.uk/Gambling-data-analysis/Social-media/Explaining-our-approach-to-social-gaming.aspx

Gambling Commission (2016). Annual Report 2015/16. Birmingham: Gambling Commission.

McMullan, J. L., & Miller, D. (2008). All in! The commercial advertising of offshore gambling on television. Journal of Gambling Issues, 22, 230-251.

Melbourne, K. & Campbell, M. (2015). Professional gaming may have an underage gambling problem. Bloomberg, September 7. Available at: http://www.bloomberg.com/news/articles/2015-09-07/professional-video-gaming-has-an-underage-gambling-problem

Superdata (2016). eSports Market Report. Available at: https://www.superdataresearch.com/market-data/esports-market-brief/

Wingfield, N. (2014) In e-Sports, video gamers draw real crowds and big money. New York Times, August 30. Available from: http://www.nytimes.com/2014/08/31/technology/esports-explosion-brings-opportunity-riches-for-video-gamers.html?_r=0

Wood, J. (2016). UK Gambling Commission: We’ll work to minimize risks from emerging esports betting markets. Esports Betting Report, July 19. Available at: http://www.esportsbettingreport.com/uk-regulators-address-esports-betting/