The World Cup is back (but leave the vuvuzela at home). In the coming weeks, 32 teams will clash for global sports’ biggest prize, cheered on by billions of fans.
But there’ll be more at stake than national pride. When sports fans gather, wagers follow. And we’re not talking rookie numbers: the global sports betting market was valued at USD 61.5 billion in 2021. With a projected compound annual growth rate of over 9%, this is expected to reach USD 114.4 billion by 2028.
The ways fans stake their money are changing almost as fast as the volumes being laid down. It’s a long time since the typical sports bet involved heading down to a local bookmaker for a flutter. These days, the biggest values are traded on online sports exchanges like Betfair in the UK or BetMGM in the US.
As player habits shift online, a new digital infrastructure is evolving to handle their money. Financial technology (FinTech) is a fast growing industry. As next-gen payment processing methods become more advanced, they change the customer experience of betting. Wagers have become more adjustable, while speedy pay-outs add a gratifying immediacy to proceedings.
But a quicksilver betting market requires nimble regulators. Sports betting’s customer experience is being shaped by the symbiotic relationship between FinTech’s giddy pace of innovation and the onus it puts on markets to stay compliant with laws across geographies. Let’s take a SitRep of the state of that user experience as it stands.
HOW CAN HARRY KANE MAKE ME RICH?
Before we get into the reeds of regulation’s interactions with tech, let’s look at the optimal sports betting customer journey for World Cup 2022.
1. Seamless onboarding
Much sports betting activity is not pre-meditated. At the outset of a match, an England fan may take stock of which players Gareth Southgate is fielding and construct an idea of how the first half might pan out. This educated premonition might lead her to reach for her phone and place her stake on an England goal within 45 minutes.
To keep her custom, her chosen betting app needs to make the journey from launch to wager as fast and frictionless as possible. This means a speedy sign-up and onboarding process, with the bare minimum of forms to fill out.
Time is of the essence in placing the bet. In practice, this means allowing mobile payment methods like Apple Pay. Today’s bettors have been given a vision of a world free from typing in their card details, and they like it. With just a press of a button and a quick glance at her iPhone’s facial recognition sensor, the bet is placed. Now for the match to start and the tension to ratchet up deliciously.
2. Real-time adjustments
Goal! After a fraught 45 minutes of deadlock, England’s number 9 outwits the opposite keeper and hoofs it into the net just before the half-time whistle. Our patriotic punter has seen her bet come good. The question now is whether to cash out, head held high, or parlay her winnings on another lucky prediction for the second half.
While she’s making her decision, the betting app is giving her the latest odds up to the minute. She’s also safe in the knowledge that if she does opt to take another punt, she can pull her bet at the very last moment.
Successful online betting apps allow for a completely dynamic experience, where adjustments can be made at will.
3. Instant pay-outs
Our intrepid football fan opts to take a splash on a 2-1 finish for England. But bliss intermingles with horror when England establish dominance in the second half with another goal in the 47th minute. Seeing a clear path to a 3-0 outcome, she decides to pull her newer bet and cash out on her original win.
All this time, the money has been stored in an e-wallet linked to her Apple Pay account. Almost as soon as she clicks the button to confirm her withdrawal, the money has appeared back in her online banking account. No nerves over funds getting lost, just jubilation at a win for her finances and her country.
WHAT’S GOING ON BEHIND THE SCENES?
A spread of factors has conspired to form this fun, profitable and safe experience. Let’s explore them.
1. Regulatory domain
Our UK-based bettor could enjoy such a smooth journey because she placed her bet in an environment where online gambling is permitted. Online gaming is now a well-established leisure pastime in Europe. This has allowed it to become a highly-structured and well-regulated industry, whose prevailing brands inspire trust and confidence.
That is not the case everywhere. In the United States, many states still prohibit sports gambling outright. Out of those states where it is legal, some only permit bets to be placed in designated physical spaces like casinos. But regulation never stands still in the US and betting companies are monitoring developments closely.
New markets are opening up that will massively increase the size of the industry. Countries like Brazil are reviewing their position on sports betting, with the regulatory details still being thrashed out. When these are complete, a proud footballing nation of over 216 million people will enter the market. Expect bet volumes to skyrocket.
2. Payment ecosystem
Our punter also benefited from a permissive payment ecosystem that allowed her to stake her bet using mobile payment methods. Again, this is not the case universally.
Each nation will place various limitations on how players can pay. In the UK for instance, gambling businesses are prohibited from accepting credit card payments. In Germany, PayPal is banned in the same way.
In the USA, the regulatory landscape is thornier still. While PayPal and major credit cards can generally be used, this is because they have been approved by each state’s government to sell payment solutions to the gambling industry in that jurisdiction. Newer payment and authentication methods will have to go through the same approval process in each location they wish to serve.
As alternative payment methods like Apple Pay achieve market share, players in more regions will benefit from speedier onboarding and pay-out times.
3. Anti-fraud safeguards
Our player could speed through the onboarding process because she was using a well-established service with an inbuilt anti-fraud architecture.
Gambling sites are popular targets for criminal activity. This can range from malicious bot attacks that take over real users’ accounts to money laundering for organised crime.
These sites also suffer from bonus abuse challenges. Some players will attempt to create multiple accounts to access to multiple introductory offers. This can result in significant costs to the business.
The most forward-thinking betting exchanges will have sophisticated software solutions in place that prevent and detect fraudulent use. Payment cards that show signs of suspicious activity can be flagged up and blocked pre-emptively. Automation solutions can algorithmically determine the likelihood of a fraudulent withdrawal request, eliminating the need for providers to review each withdrawal in turn.
By removing the need for players to prove their own legitimacy, sports betting sites can reduce risks while removing friction in the customer journey.
LET’S MAKE BETTING EVEN BETTER
This World Cup is set to accelerate sports betting’s transition from a traditional bookmaker model to a speedier, safer, digital way to play.
Endava has a suite of solutions to improve the whole customer journey. To find out how, get in touch with us today.