Rise of legal sports betting heightens role of statistical gatekeepers

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The legalization of sports betting in the United States is driving new demand for player, game, team, and performance statistics. A pair of sports data companies have installed themselves as a gatekeeper to this mountain of information.

Sportradar Group and Genius Sports provide licensing data for hundreds of professional sports competitions such as the NFL, Major League Baseball, the English Premier League and the PGA Tour. They package it and sell it to betting platforms and media companies, who use it to offer bets and create graphics and scoreboards on the air.

The two companies sought to take advantage of the growing economic interests associated with sports data. Each version has been around since the turn of the century, but business has accelerated since the US Supreme Court withdrew the federal ban on sports betting in 2018.

Switzerland-based Sportradar It is listed Market capitalization of $ 8 billion * on the Nasdaq stock market on Tuesday. London-based Genius was unveiled in April after a reverse listing with a special-purpose acquisition company and is currently worth $ 3.8 billion.

According to the American Gaming Association, Americans have made more than $ 27 billion in sports betting in the first seven months of the year. Tax revenue Over $ 2 billion in US states. July tax revenue was six times higher than in July 2019.

Data is becoming an increasingly valuable commodity in all types of financial risk taking. Sports betting For stock trading. Currently, the Financial Exchange Group considers the data generated through trading to be an important source of income.

Both Sportradar and Genius have negotiated a new deal on license statistics from the top leagues. Although they dominate the sports data industry, they have little bargaining power with suppliers, analysts say. Genius deprived Sportradar of exclusive data rights to the NFL, the most popular US sport, in April. $ 120 million annually..

In an interview this week, Sportradar founder and CEO Carsten Koerl said his group would not participate in the data bidding war.

“If a transaction does not make commercial sense to us, or if it is done commercially at a level we think we cannot do it, then not all transactions can be closed. “He said.

Last week the genius announced transaction In collaboration with gambling company Penn National Gaming, we provided official data and “fan engagement solutions” for sports books from nine US states.

A Genius spokesman said his role as a gatekeeper in league data helped maintain the integrity of legal sports betting.

“Our official data strategy ensures that sports control the capture and distribution of their own data, providing the most attractive and competitive products available to sports fans across bets and media. With official data, everyone wins, “he said.

Genius robs Sportradar of exclusive data rights to NFL, the most popular sport in the United States, and pays reported $ 120 million annually © Eve Edelheit / Reuters

Sportradar will use the league-licensed data to invent its own products, such as the “integrity service,” to prevent the match from being modified or tampered with, according to the service description in the regulatory filings. I am doing it.

“Data is part of that,” says Koerl. “We are creating value-added services in addition to data. This is very important to us. We are creating probabilities, we are creating trading services, management services and platforms. Is [and] Advertising product. ”

Jed Kelly, senior equity analyst at Oppenheimer, said some of what investors saw at Genius and Sportradar was the ability to provide real-time data to betting platforms and media companies while the game was in progress. “The place where you make money is live betting,” he said.

So far, this sector has attracted attention from some of the top sports companies. Sportradar’s minority investors include Dallas Mavericks owner Mark Cuban and basketball legend Michael Jordan, who was on hand to ring the Nasdaq opening bell on Tuesday.

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Koerl struggles to convey a neutral atmosphere in the highly passionate world of sports fandom. During this week’s investor conference in Manhattan, he said he noticed that he was discussing the topic of the best basketball player of all time with a taxi driver.

A German-born entrepreneur mentioned his relationship with Jordan, and drivers claimed that Los Angeles Lakers star LeBron James was better, calling him a more complete player.

Koerl said he preferred to let his peers make qualitative sports decisions. “I think so [NBA] The commissioner knows it better, and if the commissioner says he’s the best player in the sport, I’ll follow his opinion, “he said.

The first decision on his company on Wall Street wasn’t enthusiastic. Sportradar shares fell 7% on Tuesday.

*This article has been updated to correct Sportradar’s initial market capitalization

Rise of legal sports betting heightens role of statistical gatekeepers Source link Rise of legal sports betting heightens role of statistical gatekeepers

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