Rise of a Phenomenon

Esports are rapidly approaching the same cultural status as traditional sports. People are starting to play esports games in their daily lives more often than they do traditional sports, tournaments attract thousands of spectators, and the most talented players can go entirely professional and even join teams and earn sponsorships. Given its incredible popularity, it’s no wonder that operators are turning their attention towards building esportsbooks.

The Numbers

Professional esports athletes have high goals to shoot for. The International 2018, the culmination of the Defense of the Ancients 2 (Dotа 2) pro circuit, had a prize pool of over $25 million. It’s important to note that the base prize pool was only $1.6 million, and over $23 million was provided by fans through crowdfunding. The level of devotion exhibited by the community of esports enthusiasts is a theme that operators will encounter again and again when building an esportsbook. As with traditional sports, the match had pre-game and post-game analysis delivered by a panel of experts, as well as play-by-play and color commentary throughout the match. Dota 2 and Counter-Strike: Global Offense take up roughly 60% of the world’s esports betting market, and a few other games like League of Legends and Overwatch dominate the global esports scene.

That’s one of a number of different figures that show the incredible growth of the esports phenomenon. Total yearly esports turnover is expected to hit $8 billion by the end of 2019, and $12.9 billion by 2020. Globally, predictions indicate that esports betting revenues would hit roughly $560 million by the end of 2019. The numbers indicate what is already visible in the culture: esports are experiencing an explosion in popularity that is not going to end anytime soon.

Esports vs. Traditional Sports

Passion

Fans of traditional sports are famously passionate. Shared support of a football team, for example, can become the basis of a very powerful feeling of community among fans. Esports fans are no different. They have an astonishing level of devotion to their favorite disciplines, spending hours every day following and playing games like CS:GO, League of Legends, and Dota 2. Also, as mentioned above, fans are so committed to their favorite discipline that they will participate in crowdfunding for tournament prize pools.

Organization

Unlike traditional sports, which have centralized authorities and communication channels to establish rules and publicize results, esports are more decentralized, without a single worldwide authority to enforce integrity measures. The lack of centralized authority can sometimes create instability in esports leagues. It’s not uncommon for players to jump teams in the middle of a season, unlike in traditional sports, which often have a trading deadline.

Also, cheating, match fixing, and performance-enhancing drugs are prevalent throughout the esports world, with no single governing body to enforce rules and punish infractions. However, several organizations have emerged that are at the forefront of an effort to provide organization and regulation. The Esports Integrity Commission, for example, aims to combat cheating and corruption in esports. Game publishers and leagues establish their own systems of regulations and punishments for combating doping and match-fixing.

Data

Data rights are held by the game publishers. Third party distributors like GRID and Bayes acquire rights to aggregate esports data feeds in APIs and resell the feeds to sportsbook operators. However, some sources provide stolen data feeds which aren’t acquired through official channels but through illicit streaming or other methods.

Olympics

Despite fast-growing, worldwide popularity, esports did not make the cut for the Tokyo 2020 Olympics, to the frustration of millions of fans. However, Intel will be hosting an Olympics-style tournament called the Intel World Open in Japan in the run-up to the official Olympics. Teams representing their countries will compete for $250,000 prizes in Street Fighter V and Rocket League.

Variation

There are a wide variety of bets that can be made on traditional sports like football. Sportsbooks can assume that while the format, terminology, and odds system might vary from culture to culture and market to market, there is always clarity as far as the rules of the game are concerned. With esports, however, games can undergo structural changes, like different modes of play, head-to-head vs. tournament mode, game updates, and roster changes. These structural changes can present a challenge when it comes to designing a viable betting product, especially for bookmakers who aren’t intimately familiar with esports.

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Bets on “First Blood” (who makes the first kill) and first to 10 kills are already commonly offered.

Esports also present an opportunity for innovative operators to devise new types of betting, such as which player will have the most or fewest respawns or kills, as well as bets based on other statistics that are particular to each game.

Customer Profile

Esports enthusiasts are an entirely new breed of player. The challenge of attracting them to betting platforms requires a significant amount of reinvention and reevaluation of approaches to sportsbook organization and marketing. Whereas traditional sportsbooks try and peel bettors away from each other, the challenge in the esports arena is getting esports enthusiasts to start betting in the first place.

Operators who have integrated esports betting into their portfolio have found that while traditional bettors will bet on esports, esports enthusiasts will not bet on traditional sports. Furthermore, esports bettors resent being lumped in with traditional sports bettors, and will be alienated from a betting platform where their favorite esport is included in a long list of traditional sports options that disinterest them.

Esports fans are very community-oriented, and often get data from sites established by esports enthusiasts themselves. Websites where data is available and tournaments are streamed are set up by fans who do so purely for the love of the game. Perhaps due to this sense of community, esports fans have a nose for “inauthenticity”, or the idea of an “outsider” getting involved in esports purely for the money. For this reason, some operators have found that in order to build an effective esportsbook, it’s essential to recruit esports enthusiasts to offer guidance when it comes to marketing and even the layout and design of the esportsbook.

Marketing

Advertising

Traditional marketing methods are very ineffective. Esports enthusiasts simply don’t spend very much time on communication channels where they would encounter traditional advertising, like television, radio, and even online news. Guerilla advertising, on the other hand, holds more potential - one example being when Epic Games temporarily removed the popular online game Fortnite, a move that temporarily distressed players but created a media storm.

Sponsorships

Similar to traditional sports, sponsorships of professional esports teams have proven to be effective. For example, Betway sponsors the Blast Pro Series, which is the championship series for CS:GO. Interestingly, some major football clubs have begun sponsoring esports teams with the goal of accessing the next generation of fans, most of whom will find esports before they find traditional sports.

Layout

Operators of successful esportsbooks have found that one of the most effective layouts are standalone sites or landing pages. The companies that have found the most success have kept the esports products as separate as possible from the traditional sports betting products. Esports enthusiasts are incredibly unlikely to rifle through a list of sports on a traditional sportsbook to find their favorite esport. Companies should keep their esportsbook product offerings and marketing campaigns separate from the rest of their sportsbook.

Streaming and Influencers

Whereas traditional sports bettors get scores and other data from TV, news outlets, and other sources, esports enthusiasts want all of their content in the same place, from data to livestreaming. They often get their information from YouTube, Twitch, Reddit, Mixer, and Facebook, and effective marketers will go there to meet them. Esports community members place a tremendous amount of trust in streamers and professional players. For this reason, influencer marketing is widely used by endemic and non-endemic brands.

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Analysis and Recommendations

Building an esportsbook is looking more and more to be a great idea for operators seeking to capitalize on an international phenomenon that’s only growing in popularity. But there are several important takeaways. While it might sound simpler to integrate esports into your already-established sportsbook, esportsbooks should be specialized and dedicated. They should absolutely not be treated as if they were simply another page in a broader sportsbook, as the target market will never find them there. This is a new, different demographic that needs to be treated as such.

It’s very important to note that cross-selling only works in one direction. Traditional sports bettors might bet on esports, but esports bettors will not necessarily bet on traditional sports. Due to the esports community’s highly-tuned sense of authenticity, operators seeking to open an esportsbook would do well to include esports insiders in their effort. Traditional approaches to advertising, marketing, and even product offerings will be met with indifference and perhaps even scorn, but those that are properly tailored to their audience have tremendous revenue potential.