SBC Digital Summit: millennials, vast portfolios, and transparency are the key to esports betting growth

The SBC Digital Summit, which is taking place across April 27 to May 1, is boasting a comprehensive agenda focused on the challenges and opportunities the industry faces in light of the disruption caused to business and wider society by the COVID-19 pandemic.

One of the few sports that has been able to continue during this outbreak has been the esports sector, and while some bookmakers have found major successes in this world previously, some have been a little bit more reluctant.

Day one of the online conference featured ‘Esports - Let’s get digital’, a panel of top industry leaders who were brought together to share their knowledge and experience in the field. The discussion was moderated by Andrea McGeachin, CCO at Neosurf, a payment company with a heavy investment in time and resources with the esports industry.

Sergey Portnov, the CEO of Parimatch, said his company started with esports betting by hiring experts who led a full business transformation. "If you do not have strong advocacy of esports within the company —especially if you are a traditional bookmaker— it is impossible to transform your business."

Parimatch has now become an international site that is successfully serving the esports arena across the world. "It is the top 5 sport for us in normal times, just behind tennis and football; during the lockdown, esports have reached the top 2," he added.

Echoing what Portnov said, Paris Smith, the CEO of Pinnacle, explained how important it was to have somebody very passionate within the organization to delve into esports:

"In Pinnacle, it is esports by esports people which is part of the success," she explained. "You hear a lot of companies that say they don't think esports is going to take off and clearly they don't have an advocate within the organization that gives them the data that all of us are getting from the people that have true, genuine passion." Pinnacle Solution was one of the first companies to explore the esports betting space.

Pavol Krasnovsky, who also took part in the panel discussion, is the Founder and CEO of RTSmunity, a market maker for esports on the Betfair exchange, and odds supplier. 

Addressing the impact the pandemic has had on esports turnover, he explained that all major traditional sporting events have been postponed, and esports was able to adapt to the new situation very quickly: "We observe growth in turnover of more than ten times if compared with the same period (the last five weeks) last year," he said. "We also see a huge increase in turnover on the Betfair exchange platform, as trading companies who usually trade tennis, football, or other traditional games, have a new free capacity so they started to trade esports."

"The volume has gone up, the number of partners, the number of players and the number of bets have gone up," Smith added. "That might be systemic of the fact that people are home a lot, but I think we are going to keep the players."

Smith said that Pinnacle has also taken the opportunity to increase the quality and amount of their product, and also tighten up on integrity.

Picking up on this issue, Krasnovsky explained that in traditional sports like soccer, 60% of team revenue comes from media rights, while in the case of esports, this figure is less than 5% as most of their revenue comes from marketing. "Marketing means that the organization needs to be super great in terms of integrity because if you have integrity, revenue immediately rises from your sponsors."

Portnov placed a special focus on the fact that, according to him, esports today cannot carry success on their own.

"Standalone esports brands can never compete with big guys that blend with one big ecosystem in terms of revenue," he explained. "Maybe a time will come when esports can be fully independent but from what I see in Parimatch, I still believe esports should be part of a vast portfolio which includes traditional sports."

Agreeing with Portnov, Smith commented:

"It is interesting how the only-esports companies say that competitors who have traditional sports are unable to provide a true experience," she said. "I think that the objective of a company that has traditional sports is to utilize their infrastructure and scaling to be able to provide a proper esports product." 

When discussing which sports titles were the most popular, the panelists draw a distinction between games that are successful among players and those which are the bettors' favorites:

"Counter-Strike is very very popular, but it is interesting how tendencies do shift a bit. DOTA was more popular at one stage and now it is shifting a little bit to League of Legends," Smith said. "What it is important to understand is that not every esports game is a good betting option."

"Many punters like to place bets on Counter-Strike because it is very simple to understand," Krasnovsky added. "But in the case of DOTA and League of Legends, even some esports-oriented punters sometimes have trouble to understand these games, so they usually attract more esports hardcore fans."

According to Portnov, there is also a group of players who are literary indifferent towards what they bet on: "All they want is a game with official results," he explained. "The real thing that will make a difference is when we invite real sports players to play, for example, Counter-Strike or FIFA against themselves (star vs. star), because people don't trust brands as much as they trust individuals; that is why at Parimach we are investing heavily in this: we want influencers to influence the audience," he added.

By the end of the discussion, the panelists focused on the importance of engaging millennials to succeed in the esports arena:

"Approaching esports from a traditional perspective has worked for us, but we have focused on product and not how the product is viewed; we are shifting that significantly," Smith said and echoing Portnov, added that millennials love influencers.

"If someone wants to build a comprehensive product they have to look beyond esports; they have to look at Millenials and build a product for them," Portnov said.

"If an old school bookmaker with a high reputation such as William Hill decided to become an esports company, they would fail big time because their brand is just as distant as it can be from esports," he added. "Esports punters want bold, aggressive, open, transparent, communication where you can swear. You have to become bold and talk like they do because right now they see the betting world as something fake."

"If you want to truly engage millennials yo need to push sports betting to a new level, a more transparent level, and share your information with punters; what is really missing to engage Millenials is transparency," Krasnovsky commented.

"For Pinnacle in particular, the pandemic has just given us focus and clarity as to what we have to do: to be able to speak more clearly, more directly, and more transparently with our clients," Smith concluded.