Market make-up: German bookmakers' overround and margins
Propus Partners analyses .de markets, Sorare, DAZN results, GIG-KaFe Rocks &Co
Hello, on Gaming & Co today:
Germany market make up: dot de bookmakers conform but their offers are more varied than France.
Sorare CEO: Fantasy operator never threatened to leave France during web3-JONUM debates.
50-50: DAZN cuts 2022 losses by half.
Gaming Innovation Group completes KaFe Rocks buyout & news in brief.
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Market make-up: German books conform but offer variety
As part of its ongoing series of reports examining European betting markets, Propus Partners gathered data from German bookmakers for week 6 of the 2023-24 UEFA Champions League.
The list of operators was chosen to represent the market leaders and the data has been analysed to provide a high-level overview of how German bookmakers offer Tier 1 football events.
Here are some key takeaways:
There is a high amount of conformity within the market on margins.
Winamax, one of the most recent entrants to the German market, is the most aggressive on margin, especially on the 1X2 (match winner) market.
The number of betting markets on offer vary greatly across the different operators.
Most operators analysed have their own technology and teams, which enables them to offer unique betting markets.
Most operators offer bet builder, at least on pre-match.
Explainer: overround and expected hold margin
European sportsbooks use 'overrounds' or 'expected hold margin' as measures of margin application:
Overrounds are calculated by summing up the 'implied probabilities' of all selections in a market. For example, a 1.909 vs. 1.909, would have an overround of: 100 / 1.909 + 100 / 1.909 = 104.76. The overround is a measure of how much a bookmaker would expect to take in order to expect to pay out 100
Expected hold margin is calculated by 1-100 / overround. In the example: 1 - 100 / 104.76 = 4.55% (or 0.0455)
Margin comparison
The chart below shows the average overrounds applied to match result, total goals and Asian Handicap markets, for both pre-match and in-play, during matchday 6 of this season's UEFA Champions League. The data was collected within two hours of kick-off of each match.
The most aggressive operator from this sample is bet365, which maintains the same margins for other regions as well as Germany, many of which are highly competitive in terms of margins (this includes 102% on Asian Handicap, which brings the average down considerably).
Winamax actually offers the lowest match result margin of 103%, which is likely due to the fact they are a new entrant trying to win market share.
Pre-match 1X2 (match winner) markets are those with the lowest average margin applied. This is no surprise given this market is the most visible and commonly comparable.
The total goals market sees a lowest pre-match overround of 105% from bet365 and the same for in-play. DAZNBet also offers 105% across the three markets analysed for in-play. As with Winamax, this is likely a marketing tactic by DAZN as a new operator in the market.
Across the whole sample (all operators and market types), an average pre-match overround of 106.2 is applied, with 107.3 taken in-play.
Markets per event
The chart below shows the average number of markets available for each event within the sample. Note, each bookmaker groups markets in different ways, so we have used a standardised approach for a fair comparison.
We don't necessarily believe that more markets is always a good thing, the range and different types of markets, their uniqueness, and how they are presented, is often more important, however it is still an interesting measure of what is being offered to customers.
The number of pre-match markets varies a lot across German operators, with one group within the cohort (888, bet-at-home, bet365, Interwetten and Tipico) offering over 120, while the rest typically offer around 90 markets.
888, bet-at-home, bet365, Interwetten and Tipico across pre-match and in-play, are the operators offering the most betting markets. All, except for bet-at-home, have multiple suppliers and in-house technology.
BetVictor seems very conservative in approach with the lowest pre-match selection and on the lower end of the in-play offering too.
Unique markets & bet builders
The German market has a number of operators that have their own technology, trading and risk management teams. What this allows, in theory, is for them to differentiate as they control their own product:
The majority of operators analysed offer unique content to their customers. This will drive the overall market and make it difficult for those other operators without this ability
The German market sees most operators offering, at least, a build-your-own bet builder product, not merely a set of pre-canned selections. We would say this is standard in a mature European market
We see more variation than in France, with operators that are active in both markets offering different products to their customers. This likely shows the restrictions placed on operators in France by regulation, in comparison to Germany’s slightly less restrictive regulations with regard to markets benign allowed and payout ratios.
Propus Partners is a consultancy specialising in sports betting with a specific focus on trading, trading technology, product, operations and the supplier marketplace. Propus works with operators, platforms, feed providers, regulators, data rights holders and sporting organisations.
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Sorare outlines vision for 2024
Nicolas Julia (on the right of the picture) also denied threatening to leave France during heated web3-JONUM debates.
Sorare’s founder and CEO Nicolas Julia spoke to the French web3 media outlet The Big Whale and said the company would focus on product, gameplay and adapting its offer to US sports fans as it eyes North American progress as a key objective in 2024.
As a French tech unicorn, Sorare is widely seen as the main beneficiary of the web3-JONUM regulations that were passed as part of France’s online digital bill in October.
Hot under the collar: Asked if Sorare (or its lobbyists) really had threatened to leave France during the heated parliamentary dealings that led to the law being passed, Julia said Sorare “never threatened anyone with anything, that would not be (an) intelligent” thing to do.
He added that Sorare has always wanted “clarity and to protect our community”.
“We’ve always been defenders of having a (regulatory) framework, but one that is balanced, and we are lucky to have a government that wants to see tomorrow’s (business) champions develop on French territory”.
Julia acknowledged that Sorare’s NFT-virtual cards fantasy league product comes “with a typology of risk that is very different to other products on the market”.
Further viewing: The full interview can be viewed here (in French).
DAZN cuts losses in 2022
50-50: Streaming specialist DAZN almost halved its losses to -$1.2bn in the 12-month period to the end of December 2022. The figures compared with losses of -$2.2bn in 2021 as the company attempts to balance acquiring costly sports rights and driving subscription revenues to its platform.
The cost of acquiring sports rights rose by more than 20% to $2.4bn as revenues increased 41% to $2.2bn, the vast majority of which came from the group’s direct-to-consumer activities.
Break time: They would have been higher but for the break that followed the Qatar World Cup and currency fluctuations from mainly euro revenues being reported in US dollars.
Quids in: Broadcast partnership revenues were down c20% to $75m and the group said 29 “key management personnel” had shared a salary pot of £31m.
Owner Len Blavatnik’s investment in DAZN through Access Industries dropped from $730m to $240m.
A recent report by Enders Analysis said DAZN was on a more sustainable financial footing and “should reach break-even next year and move into profitability thereafter, with additional upside from betting and retailing third-party sports services”.
DAZN recently offered some of its football content free to German viewers and could do the same in France and other markets.
Gaming Innovation Group completes KaFe Rocks acquisition
Get your rocks off: GIG has completed its €35m acquisition of the affiliate group KaFe Rocks. The deal was announced in November and GIG said it enabled it to become the “dominant force in online casino affiliation” and reinforced its foothold in North America.
The group will pay €15m in cash and €20m in four six-monthly payments over the next two years.
GiG Media acquired AskGamblers from Catena Media for €45m a year ago and said that transaction was “poised to drive substantial growth for KaFe Rocks assets post-acquisition, leveraging its proprietary media and marketing technology”.
The group expects revenue synergies from AskGamblers and KaFe Rocks to reach €23m in 2024 and EBITDA margins of more than 45%.
News in brief
The Quebec Online Gambling Coalition has renewed its call to regulate the sector in the province. In an interview with CDC Gaming Reports, spokeswoman Nathalie Bergeron said the online gambling habits of Québec residents revealed by a recent survey only confirmed what most industry executives already suspected.
The Culture, Media and Sports parliamentary committee has called for Premier League football clubs to commit to reducing the number of gambling advertisements in stadiums to minimise youngsters’ exposure to marketing from gambling sites.
Calendar
18 Jan: Flutter Entertainment
6-8 Feb: ICE London
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