In the dynamic world of sports betting, traders aim for the north star of risk management – maximizing long-term profitability. The pressure of providing 24/7 betting content and the trend of outsourcing pricing has cornered many operators into using risk management as a damage control tool, predominantly to curtail losses by imposing limits and profiling players.
As a result of separate management of pricing and liabilities, sportsbook operators find themselves without the nimbleness required to adapt pricing in line with real-time betting activity. It’s a cumbersome task; consider the sheer volume of events – a regular European sportsbook deals with hundreds of fixtures on a weekday and even more as Saturday rolls in. To manually analyze each game, market, and betting option for optimized pricing is not just cost-prohibitive but demands resources that are beyond the scope of most companies.
Nevertheless, the target of bolstering profits remains intact. The critical query is: how can traders synergize liabilities, pricing, and customer management to reap the financial benefits? Enter the era of automation and machine learning – the solution that makes this possible.
In the past, pricing liabilities were inherently connected – this was manageable given the more contained sportsbook content. However, in today’s climate, the vast scale of daily events demands a shift towards focusing on customer management.
When unable to act on the diverse liabilities across the vast expanse of the sportsbook – which now includes betbuilder products with multifaceted liabilities – operators miss out on optimizing potential margins for each event and type of market, thus leaving profits untapped.
Fortunately, automation emerges as the game-changer, sweeping away the traditional barriers. Advanced technologies are now available that not only enable adjustments in odds driven by liabilities but also foster decisions that are predictive and correlated across all market types and outcomes.
What is the implication here? Through automation, operators can dynamically adjust margins for each bet selection by considering the volume of wagers, current and past liabilities, and real-time probabilities, thereby enhancing profits at an unprecedented scale.
Overall content and market offerings will witness significant financial benefits. Previously, the inability to make these adjustments meant traders would either reject bets or impose restrictions on players rather than accept them to boost revenue. This repressive strategy has left a wealth of funds unclaimed, leading to the rejection of potentially good bets and customers seeking more favorable limits elsewhere.
By bridging the gap between third-party odds, liabilities, and customer management preferences, automation fosters a thriving and profitable sportsbook. When our automated risk management tools were implemented for our clients, we observed a consistent gross profit margin increase upwards of 10% for small-to-medium sized operators.
Proactive, comprehensive liability-driven risk management not only supports a brand’s experience by enhancing retention and turnover but also by setting your brand apart. With automated connections between pricing and liabilities, traders can confidently reduce the frequency of bet rejections and suspensions.
Automated systems guarantee that all betting activities are considered, allowing operators to permit wagers on any market type without restrictions. Selections with a high volume of bets and undesirable liabilities have higher margins applied, while less popular outcomes boast more attractive odds, thereby inviting increased turnover.
The deployment of this technology isn’t trivial; that’s why manual trading at such a scale is impractical. Real-time updates to liabilities and prices, considering every bet placed, the state of the match and myriad trading parameters, can only be efficiently achieved through automation.
The bespoke data from your sportsbook is crucial, informing operators about the likely betting patterns of customers and how to adjust odds to maximize revenue. Plus, predictive, liability-driven automated tools alleviate the manual burden, avoid human error, save costs, and free up resources for more strategic tasks. They also streamline time-consuming and often reactionary customer management activities.
The increase in perpetual sportsbook content over the past decade has been a significant step forward, driving customer engagement and turnovers. Thanks to automation technologies, risk management is poised to evolve in tandem, ensuring even greater consistency, stability, and predictability in what is an inherently uncertain industry. This modern approach will ensure larger profits on good days and minimize losses when luck isn’t on your side.
