A new phenomenon in the United States, micro-betting is a form of in-game wagering, meant to describe a bet on an event (within a game) that is about to happen and won’t last very long; like the next play or pitch. While the ability to bet on every play within a game remains a novelty for now, it is expected that, over the next three to five years, in-play micro-betting will become the predominant way people bet on sports in North America.
Of course, the ability to wager on a multitude of in-game markets (and know whether you’ve won or lost in a matter of seconds) is rather prominent abroad. It is commonplace for fans in Europe to bet on individual points or games within a tennis match, for instance.
MARKET MATURATION
Micro-betting’s emergence in the U.S. is a byproduct of market maturation. For the first three years post-PASPA, sports betting operators put the vast majority of their resources behind going live; vertically integrating a proprietary tech stack, which enables control over their sports betting offerings; and customer acquisition. But the industry has reached an inflection point. Operators have come to realize they are largely selling the same thing and that the steep competition for market share has become a race to the top: who can spend more money.
The desire to reduce customer acquisition costs, and to best serve the growing demand of their most highly engaged users, has led sports betting companies to turn their attention to product innovation (including the integration of micro-betting markets). From a resource allocation standpoint, it has become more justifiable to make investments in technology and the products that allow an operator to really be able to chop up the game in a way that gets so many more predictions out there and accurately lays some sense of odds on those outcomes. Advancements in the underlying data feeds that support micro-betting products now make it a viable product for the first time, too.
However, it is likely going to take some time for micro-betting to become a household phenomenon in the country. With in-play betting making up more than 70% of the European sports betting handle, and attention spans dwindling among sports fans, this will be the predominant way they bet on games sooner rather than later.
The European in-play handle isn’t comprised solely of micro-betting wagers; much of it is tied to money lines that move during the game. But that may be because soccer is the most prominent sport abroad and the constant flow of the game and lack of scoring makes it a challenge for operators to set micro-betting markets. The natural breaks within American football (between plays) and baseball (between pitches) make those sports a much better fit for the product.
MORE PLAYERS TO CHOOSE FROM
The perceived sports betting gold rush has sparked a host of acquisitions among technology providers and affiliate businesses. Companies that leverage machine learning to create odds and probabilities feeds (like Simplebet, Swish Analytics, Angstrom.bet) could be the next pickaxes that operators target, with the focus shifting to product development. In fact, the run on micro-betting market makers may have already started. Back in March, PointsBet spent US$43 million to acquire Banach Technology, in its efforts to expand the company’s in-play betting options. Moreover, on the last week, Simplebet, the B2B product development company, launched NFL micro-betting products on DraftKings Sportsbook for week 1 of the 2021 season. Those products are available for DraftKings users in Colorado, Iowa, Indiana, Tennessee, Virginia, West Virginia, and Pennsylvania.
Operators aren’t the only ones expected to benefit, as micro-betting gains steam stateside. The increasing popularity of the product should also serve the pro sports leagues and broadcast networks via free-to-play and fan engagement products. Consequently, as Nakisa Bidarian, Founder of BAVAFA Sports and Operating Partner at Anti Fund venture capital (which invests in Simplebet) said: “Micro-betting will allow sport books and leagues to gamify the game, creating significance for every single play, which will in turn drive viewership, engagement and revenue. It is the ultimate intersection of live sports, mobility, social media and gamification.”