Why esports can’t be left in the betting bargain bucket – esports betting

Esports represents the most rapidly expanding segment within the global sports betting landscape. Yet, it is concerning to note that many sportsbooks still treat it as an afterthought, often lumping all esports together as a monolithic entity. Oliver Niner, Head of Sales at Pandascore, asserts that esports should instead be viewed as the “tip of the spear” for innovation and growth in the betting sector.

By Oliver Niner

The discourse surrounding the growth and potential of esports betting has become ubiquitous, appearing in numerous articles and panel discussions throughout the year. While these conversations offer insights into past trajectories and fleeting predictions about the future, they frequently overlook the intricate back-end processes underlying the esports betting sector. Understanding these mechanisms is crucial, as they form the backbone of successful operations in the industry.

The success of esports betting relies fundamentally on how suppliers and operators approach, implement, and innovate their product offerings. A paradigm shift in methodology is vital; we can no longer afford to relegate esports to a secondary position in the betting portfolio.

The Current State of Play

Major players in the sports betting industry have made significant strides in advancing the broader landscape. Companies like Sportradar and Genius Sports have become titans within the field, driving growth through ventures into the lucrative U.S. market and public offerings.

Despite their well-deserved positions, the sports industry has undergone tremendous evolution over the past two decades and continues to change at an unprecedented rate. Within this evolving landscape, esports betting is racing to keep pace with the agility of the overall esports ecosystem.

Operators are discovering that esports betting is distinct from any other segment they offer. The rapid innovation occurring at the intersections of gaming, sports, music, art, and pop culture is what establishes esports as the world’s fastest-growing entertainment medium.

More importantly, esports is shaping how younger demographics engage with sports and media. The traditional sports industry is still grappling with the streaming revolution that esports fully embraced from the outset. This is evident in the crossover between esports conventions and mainstream sports media culture.

Take Spanish streamer and esports caster Ibai Llanos, for instance. With over 8 million followers on Twitch and regular viewership in the hundreds of thousands, Llanos has carved out a significant niche within the football community, even partnering with Spanish international Gerard Pique and conducting Lionel Messi’s first exclusive interview following his move to Paris Saint-Germain.

Over the past six to seven years, the cross-pollination between esports and traditional sports has intensified. From high-profile figures like David Beckham and Sergio Agüero owning esports teams, to basketball icons Shaquille O’Neal and Michael Jordan investing, the convergence is undeniable.

For sports betting operators eager to capitalize on the opportunities presented by esports, a one-size-fits-all strategy is insufficient. Both product offerings and marketing tactics must pivot to reflect the unique characteristics of esports, requiring a more agile and tailored approach.

Three Problems with Current Approaches to Esports

The agility demanded by esports betting necessitates dedicated suppliers who can evolve and adapt swiftly to meet the expectations of bettors and the returns sought by operators.

Product

Leading suppliers have refined their products and data capture processes within traditional sports betting; however, the lessons learned do not always seamlessly translate to the esports context. This challenge is evident in the limited attention and investment that esports betting products receive.

Esports is often treated as an ancillary offering bundled with traditional sports in a way that undermines its unique value. To achieve desired turnover and market share within this burgeoning sector, operators must fully embrace esports rather than treating it as a mere addition to their portfolios.

This evolution begins with product differentiation. Numerous companies are now creating specialized products tailored to how esports are consumed and traded—factors that are fundamentally distinct from traditional sports.

Unlike traditional sports, esports encompasses a variety of specific game genres, such as First-Person Shooters (FPS), Multiplayer Online Battle Arenas (MOBAs), and sports simulations, each possessing its own nuances. A comprehensive esports product must be anchored in data-rich models while employing traders who possess in-depth knowledge of each game.

According to Karl Zammit, PandaScore’s Head of Trading, live trading in esports requires a predictive approach that varies significantly across genres and individual games.

No One Size Fits All

Currently, many operators adopt a generic, one-size-fits-all strategy when engaging their suppliers. This approach works for traditional sports, but it is misguided to expect similar growth in esports from such systems, given the fundamental differences in this arena.

Operators leveraging a bundled approach that undervalues esports will miss out on potential performance. To effectively tap into this lucrative segment of the market, operators must invest in technologies and methodologies tailored specifically to esports.

Segmentation is Essential

Another critical challenge in scaling esports betting is the tendency to categorize esports as a singular sport. This misunderstanding creates significant barriers to effective trading and product development.

If we understand that CS:GO differs fundamentally from League of Legends and Valorant, then it is unreasonable to expect a general esports trader to yield the desired returns for operators. Recognizing the segmentation across different esports genres is pivotal; even between games of the same category, playstyle, strategy, and betting behavior can vary significantly.

One would not expect a head of trading to employ the same models across all ball sports; similarly, it is nonsensical to expect a uniform approach within esports. At PandaScore, our dedicated traders are experts in specific games, many of whom are semi-professional players themselves, ensuring that we approach each title with the necessary depth and expertise.

Key Considerations for Esports Betting Success

Esports is already experiencing an explosive growth trajectory, boasting a compound annual growth rate (CAGR) of 52%. However, the inadequate product offerings currently prevalent in many operators’ portfolios are stunting turnover and performance. Consequently, dedicated esports books and emerging companies are gaining a competitive edge.

This situation creates a self-fulfilling prophecy, dissuading operators from dedicating further resources to esports betting. The perception of poor performance in esports betting among tier-one operators often perpetuates itself.

Investing in bespoke products featuring sector-specific trading processes and data capture is essential for establishing a successful esports betting vertical. With a robust foundation, operators can shift their focus from merely meeting basic requirements to implementing innovative marketing strategies aimed at attracting the next generation of bettors.

Pandascore is committed to supporting our clients’ growth, allowing us to scale alongside this innovative vertical. Our clients have reported success in identifying new player demographics and launching engaging campaigns that resonate with esports bettors.

For betting operators aiming to capture the interest of the next wave of punters, treating esports as an afterthought will only hinder their potential. Instead, it should be positioned as the spearhead of future growth in the sports betting industry.