According to Mark Locke, co-founder and CEO of Genius Sports (NYSE: GENI), the US's move toward increased in-game betting may be a major source of expansion and revenue for the business.
Speaking Monday at the Goldman Sachs Communicopia + Technology Conference in New York, Locke pointed out that live sports betting is not as popular in the US as it is in the UK, suggesting that there is still room for expansion.
"The opportunity is absolutely massive,” said Locke during a conversation with analyst Benjamin Miller. “So I mean, if you look at Europe, you look at the U.K., for example, somewhere between 60% and 80% of all bets are made in play. And on top of that, the margins on them are much higher. In the U.S., you choose your number, but call it 30%, 35% of those bets that are made in play.”
The sports wagering industry's longer-term investment thesis, which includes Genius and rival Sportradar (NASDAQ: SRAD), may benefit from the evident demand for live betting offerings, which are expanding to include microbetting. The leading data suppliers are Genius and its rival, who supply data that sportsbooks need to increase in-game wagers for its customers.
Profitable in-game betting for Genius
The fact that there are numerous established sports betting markets in Europe is evidence of the popularity of in-game betting among bettors. Although the slower play speeds of many of the more popular sports, like soccer, make them suitable for live betting, they also present opportunities for margin-accretive wagering.
According to Locke, in-play betting drives larger margins in Europe, and although it's still relatively new in the US, it's becoming more popular. The fact that live betting data is more valuable than beforehand data is noteworthy to Genius investors.
“From our point of view, we also get paid roughly 3x the amount because the data is more valuable on those in-play games,” said Locke at the Goldman conference. “So we have a compounding effect in our deals with the sportsbooks whereas you move to in-play betting, not only do the margins go up but you also have — we also get paid roughly 3x the price on them.”
Because in-game gamblers tend to spend more than their pregame odds-focused colleagues, sportsbook owners are forced to invest in the live data that Genius provides.
BetVision: An Additional Genius Growth Valve
Locke also talked about Genius's BetVision product, a streaming platform that allows bettors to gamble. For instance, BetVision enables a DraftKings or FanDuel customer to view and wager live on an NFL game that is streaming on their mobile device.
Another key component of Genius's enlarged collaboration with Hard Rock Bet Sportsbook is BetVision. The two businesses have collaborated since 2021, and as part of the Monday expansion, Hard Rock Bet will have access to BetVision.
“(BetVision) becomes the interface for the sports fan to engage with that game and engage with Hard Rock on these events. And so what they’re doing there is they’re going in, they’ll be placing bets. They’ll be watching the game, they’ll be seeing adverts. There’ll be — it’s a full user experience,” added Locke.