Pinnacle claims success in esports betting where others have failed thus far
Esports Betting Report

Esports Betting: Profit Center Or More Catnip For Millennials?

Esports millennial catnip
For all the excitement about the potential for betting on esports, there are few signs as yet that it has truly taken off as a product and likely remains a small niche with most traditional bookmakers.

Such would be the conclusion when looking across the spectrum of European-facing bookmakers where esports offerings are somewhat few and far between, despite the hype attending the emergence of esports as a meaningful betting product in the last few years.

A quick scan of offerings across the industry shows that a handful of traditional bookmakers now offer esports, including William Hill. According to spokesperson Joe Crilly, WH sees turnover annually in the UK of about £1m ($1.3m) a year on its esports offering.

To put that in perspective, this was equivalent to the same amount William Hill takes on a non-Wimbledon tennis major such as the US Open or the French Open.

“Another way of looking at it is that we take more than twice as much from one middling English Premier League game – which for a game such as, say, Newcastle United versus Stoke City is about £2.5m– than we do in one year from esports,” he adds.

Still, others involved in the market are clearly taking a more concerted approach to esports. One such is Pinnacle, which has been offering esports as a product since 2010. Its marketing director, Harry Lang, says that the company’s esports offering is on its way to taking in its 10 millionth bet by the end of the year.

This compares with the five-million mark reached earlier this year. It is a trajectory which now makes esports the fifth most popular sport in Pinnacle’s offering.

“That should give you a pretty good indication of the growth curve,” he says. “We are over the steepest part of the learning curve for trading esports and now enjoying the benefits in terms of profitability.”

‘We’re in the ten percent’

As Esports Betting Report reported last month, at a recent conference it was claimed by the panelists at one session that up to 90 percent of esports offerings from traditional bookmakers are failing to make a profit.

Lang is adamant that Pinnacle is one of the ten percent for whom esports is more than just a loss leader.

“Many of our traders come from an esports background and they put a huge effort into learning how to make it profitable so I’m happy to say we’re in the 10 percent who are having a bit more success with esports.”

This likely isn’t the case elsewhere. Crilly at William Hill admits his firm’s offering is a “bit more basic” compared with others in the sector such as Pinnacle or Betway.

“Because of the way we have gone about our esports offering, with just head-to-head betting, it is likely that there are people out there in the market who know much more about the sports than we do.”

In effect, he admits that esports doesn’t as yet make enough money for William Hill to dedicate a specialist to the offering. It leaves the odds-making to those on the trading desk with a passing interest.

The youth vote on esports

What is attractive about esports for the traditional bookmakers that do offer the product is the demographic it attracts. In short, esports customers over-index on under-25s, those almost mythical millennials.

“The average esports punter is a lot younger than with traditional sports,” says Crilly. “They may not have been attracted initially by our sports and gaming offerings, but once they are through the door we have a chance to cross-sell.”

It is a similar strategy to that employed with novelty or exotic markets such as X-Factor and other reality TV betting.

“The people attracted to bet with us via X-Factor might not have been aware of the full complement of betting and gaming products. It is the same pattern with esports. We see a lot of account openings.”

The appeal of such a strategy is easy to understand, suggests Lang, but he adds that it is unlikely to pay dividends in the long term.

“While we do see a small percentage cross migrating to sports, our esports customers tend to bet on their favorite game and stay there.”

Toe in the water for esports betting

Lang agrees there is also an element of ‘Will this do?’ about many traditional bookie offerings.

“Esports is still in its infancy, betting wise, so many operators have only dipped the tip of a toe in, and I expect seen very little action as a result, or been badly burned by customers who know more than their traders.”

He adds: “If you’re going to do esports betting, you need to do it properly.”

Such was the message last month at Betting on Sports in September when Unikrn CEO Rahul Sood made the case for the esports-only brands as being the likely winners in the space.

Lang certainly feels that there are aspects of esports provision that differ from that of traditional sports.

“One thing I’ve asserted repeatedly since I joined Pinnacle and started learning more about esports is that esports fans act in a very different way to traditional sports bettors,” he says.

“As such you need an offering that speaks to them in their language. The jury is still out on whether an independent brand or an offering within an operator’s website is the best way to achieve this.

“For Pinnacle, our new esports hub is what we feel is the best of both worlds – the best value we can offer, the player favorite games and markets and educational environment that can improve a new esports bettors’ performance.”

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Scott Longley
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Scott Longley has been a journalist since the early noughties covering personal finance, sport and gambling. He has worked for a number of publications including Investor’s Week, Bloomberg Money, Football First, eGaming Review and Gambling Compliance. He now runs his own editorial consultancy Clear Concise Media and writes for a number of online and print titles.