COMMODITISED
PRICING
With B2C traders now reliant upon
third-party pricing providers or the
direction given from the exchanges and
Asia, the industry faces the prospect
of pricing becoming commoditised
and offering little in the way of price
differentiation.
“It will be sad for the punter when
it gets to the likes of the Cheltenham
Festivals and World Cups when
operators will be, for instance, 7/2 or
4/1 Brazil across the piece and they’ll
be very little variance in price and
no opinion taken by any particular
company,” Boylesports' Wright says.
Although, according to some, the
opportunity to stick the head above the
parapet will still be available but there is
now greater consideration about when is
the right time to implement this strategy
and when this happens it will often be
part of an overall marketing ploy.
“Competitive pricing, to be at its
most effective, must be part of a holistic
strategy that includes many other
“ALGORITHMS
CAN’T TELL YOU
WHEN IT BECOMES
OVERCAST AT THE
OVAL AND THE BALL
STARTS TO SWING BUT TRADERS
CAN DO THAT.”
Simon Trim, managing director, Sporting Solutions
www.egrmagazine.com
facets such as marketing, customer
communications, and technology
to name a few,” a William Hill
spokesperson says.
“Obviously, it’s important for us to
standout when the nation is looking
to bet, but this is not a sustainable
marketing policy so we are selective
when we chose to evoke this strategy
so that it holds the greatest resonance
with customers,” the spokesperson
adds.
A new tool used by operators is
that of enhanced multiples – the
rolling up a number of selections into
an accumulator that pays out slightly
more than the accumulated odds of
the respective singles. This is a clever
trick as with each selection added; the
greater the margin the bookmaker is
working to.
Even with commoditised prices,
operators are able to offer such specials
at what may seem like favourable odds
to the punter. “For instance, take an
Arsenal, Liverpool, Chelsea and Man
City four-fold,” Wright says. “People
will package that so if it comes to say
3/1, operators will say ‘come to us
and you can have 7/2’ – that’s quite
clever packaging as you know with
the multiple business you have got the
theoretical margin inside.”
CUSTOMER LOYALTY
Oddschecker managing director
Toby Bentall says data from his price
comparison site shows that that 45% of
its users aren’t price sensitive and tend
to remain loyal to a very select group
of firms rather than take a bigger price
on offer elsewhere.
Bearing in mind this is taken from a
pool of people using a website which
compares odds between a large
number of sportsbooks, this is appears
a surprisingly large percentage and
one which would be expected to grow
bigger still when surveying a wider
demographic.
Perhaps this partly explains why the
move to marketing and improving the
customer experience in order to gain
custom continues to gather pace. This
is especially relevant to in-play betting
where operators can engage customers
by adding a raft of different features.
“The movement of every firm’s
business now is to in-play and we
are 60/40 in-play,” says Wright. “It’s
about how you package the business,
how you sell it to the customer and
improve their experience - whether
you accompany it with streaming, with
live statistics, with free bets – the full
package. Customers aren’t necessarily
price driven so they’ll soon be a
standardised price across the industry.”
POC IMPACT
One development on the horizon
which is expected to impact
pricing strategy is the UK Point of
Consumption (PoC) tax, which is
planned to be introduced 12 months
from now. With operators set to give
up around 15% of their profits, talk has
emerged of margins being raised or
reduced to absorb the hit.
“I can’t see [margins increasing],”
says Proctor. “Online customers have
expectations which operators will have
to deliver on and it’s only going to get
more competitive.”
For others, however, betting margins
may well have to be increased in order
to keep heads above water. Wright
argues that the PoC tax will only benefit
the “bigger pocket” operators able to
maintain margins while paying the tax,
while smaller competitors will become
priced out of the market.
“If you are betting football matches
to 3-4% and you have to pay a large
percentage of PoC tax – it’s not really
viable so it’s going to be difficult for the
smaller firms while the bigger ones wi