Unlocking esports betting’s potential with official data

In a relatively short time frame, esports wagering has evolved considerably. According to the UK Gambling Commission, in 2020 alone, esports betting experienced 2,992% year-over-year growth, with no signs of slowing down. Some experts predict the market will more than double in the next few years, and a large part of what makes the potential for the esports wagering market so appealing is the breadth and accuracy of the data involved; so long as that data is official and carefully monitored.

In-play betting is a preferred choice for both operators and bettors, and a fraction of an inch can make all the difference in some cases, so accuracy is a must. The question then becomes, does there exist a realm of esports betting where data can be reliably trusted in its entirety?

Past and present

From a historical perspective, esports, despite its size, is still a market in its infancy. While video games have been around for decades, it is important to distinguish the difference between professional esports and competitive gaming by amateurs; the former being defined by rigid rosters with players who are contracted to compete full-time for a specific organization, and who compete in tournaments that are sanctioned by game publishers.

How exactly are esports different from video games, and what makes them so popular in the betting world? One common misconception is that esports is a category unto itself, when in reality esports should be thought of no differently than traditional sports. As such, each game title can be seen as its own league, and within those leagues, there exist unique sets of teams and gameplay, as well as betting data. With regards to data, as with any digital medium, both the quality and quantity have improved over time. Today, the accuracy and quality of what is referred to as official data make for a world of potential with regard to esports betting.

What is official data?

As with all sports data, there are several mechanisms that exist for the collection of esports data. Additionally, there are those data that are officially licensed from rights holders, and others that are unofficial. And in the case of esports, unofficial data are less accurate and pose a threat to the integrity of betting structures.

When it comes to unofficial data in esports, we could be talking about superficial data captured from public streams, third-party data systems that are delayed or lacking accuracy, data systems that possess external failure capabilities, or overlay data capture that rely on their own forms of collection and analysis outside of the game architecture. Official data sets in esports are entirely different and more reliable.

According to Moritz Maurer, CEO and Founder of GRID Esports, an official esports data solutions partner, one of the most significant elements that sets official data apart is its accuracy. This is because the data is provided by the rights holder for third-party use. As such, it is delivered almost instantaneously (in under a second) from the game server, and is granular down to the most trivial points, such as the X-Y coordinates of a player, or how many steps have been taken over the course of a match. Understanding the difference, then, between official and unofficial data, it is abundantly clear why, for the integrity and viability of the betting market, particularly in highly regulated markets such as the United States, official data needs to be the only consideration.

Getting in on the action

If you’ve ever played daily (or season-long) fantasy sports, then you know that the excitement of real-time data tracking is one of the most engaging parts of the game. In a close matchup, the daily or weekly stat corrections following official game data review can be hugely stressful.  In the betting world, those corrections can have serious implications. In esports, when official publisher data is used, the room for human or even machine error is negligible or non-existent. What’s more, the scope of data is vast, meaning that all betting props are on the table, and it is entirely up to the operator to choose from among the vast ocean of data points to offer odds in real-time.

Rich Maryyanek, head of global business development at GameCo, said: “Advancing streaming technology has enabled side-by-side video running alongside in-play wagering opportunities within a single app, creating new opportunities to bet and increasing consumers’ time spent on-device. This allows fans to play, interact, and engage with esports in entirely new and unique ways versus traditional sports betting. We believe esports betting is a real gamechanger for the sports betting industry, and it begins with creating compelling esports betting experiences.”

This opens an entirely new option for operators, extending beyond simply offering ‘esports wagering’ into offering esports as a standalone sportsbook, with every game title that offers official data to operators to function as its own sport. The opportunity to open the sportsbook to a unique and highly valuable market segment rests in access to and dissemination of official data for betting purposes, with in-play options extending far further than in virtually any other sport.

Staying above board

It’s easy to take a superficial look at esports betting and suggest that the complexity lies in the inability to accurately collect and analyse real-time gameplay data, but with official data at play, it is clear that is not the case. Some market participants worry about the possibility of cheating as esports wagering proliferates. This is often due to the misconception that there is a lack of professionalism in esports. Once the difference is established between semi-pro and pro play this is remedied fairly easily by thoughtful regulation and the requirement of official data.

Per Moritz: “Official data and the use of official data is incredibly important to integrity. First and foremost, official data means that a deal has been made with a rights holder for specific use cases, one of which is the limitation to regulated markets. The rights holder is aware that their information is being used for the purposes laid out and allows them to take any additional measures including vetting and education that may be needed.

He said: “Unofficial or delayed data can incentivise those on-site at an event to try and game the open market. It is of the utmost importance, especially in real-time wagering, that information is relayed the moment it happens. Gaps in this chain of custody leave gaps of time for actors of which to take advantage.”

The use of official data in esports betting allows for such precision tracking – both in real-time and from a historical context – that any deviations from a standard error would highlight any attempt to game the system. Companies like GRID receive thousands of data points per second directly from the publishers, so integrity can be maintained, and the risk of regulatory violations is divorced from data and technology providers, as with any traditional sport. The key now is continuing to educate legislators and operators that are not currently involved in esports wagering on the market and its potential to engage an entirely new demographic of sports bettors.

Behold the future

With a comprehensive understanding of the power of official data, we can start to look at the existing potential for its use in relation to the sports betting market in the United States. While there are several areas of opportunity, three stand out above the rest. First, there is the flexibility and scope of real-time wagering. Second, there is an unparalleled opportunity with regards to acquiring new players with highly sought-after prop bets and wagering paradigms. Finally, there is the benefit to land-based operators looking to partner with publishers for exclusive marketing opportunities.

Real-time wagering made up a significant portion of sports betting growth in the US, coupled with the increase in state legalization in the past year. Ultimately, traditional sports betting revenue in the US nearly doubled in 2020, despite the fact that so many sports were on hiatus for extended periods. And what did online bookmakers around the world see when those sports were paused? A significant increase (upwards of 60% in the case of some online books) in esports wagering. With official data in the mix securing the integrity and validity of results funneled directly from publishers, the American market can capitalize on this rising trend and continue to feed the growth of the traditional sports betting market by introducing another realm of sports betting with even more props to offer.

This introduces the second major opportunity, which relates to the market betting on esports. A 2020 analysis of esports bettors from Loot.Bet found that while, like traditional sports wagering, the majority of esports bettors are male, over 90% are under the age of 30, and 78% are between the ages of 21 and 25. Alternatively, a study by Morning Consult found that, in traditional sports, the largest demographic of bettors is made up of people aged 30-44. Offering accurate and expansive betting through the use of official data opens up a highly coveted demographic of new, younger bettors in the highly lucrative American market.

Finally, on the marketing front, land-based operators that can partner with publishers or platforms like GRID to access official data can expand their events base with branded tournaments and showcases. While the betting component is certainly crucial to their success, the additional business opportunities that come along with it create an entirely new angle for growth of operators.

While the global market size for traditional sports betting, which purports to be successfully regulated due to the accuracy of the data reported and integrity, stands at roughly $203bn (IBISWorld, 2020) it stands to reason that the opportunity for esports betting, based on those same criteria and the entirely new demographic of bettors, can help increase the size of that market cap significantly in the coming years. Since 2015, the esports betting market has increased from $300m to roughly $18bn (Wholesale Investor, 2020). Regulating and expanding this market through the use of official data can help take these already substantial growth metrics to a new stratosphere.