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Odds on: Unlocking the potential of AI for esports betting
Jordan Peltier, Chief Data Officer at PandaScore, says that humans and machines must work together if businesses are to maximise the potential of AI when it comes to esports betting odds.
Artificial intelligence has been one of the most discussed industry topics over the past 12 months and it’s easy to see why. AI can be transformative for operators, suppliers and bettors, and while there are concerns around adversarial AI, when used in the right way, it’s a game-changer.
At PandaScore, AI plays a crucial role in the odds we deliver esports betting operators. This is because it is incredibly effective at handling complex, high-dimensional and unstructured data and finding patterns within it – these patterns are needed to predict the outcome of events.
This, of course, is the foundation needed for determining the odds for each market that we offer. But the power of AI goes beyond this.
It can adapt dynamically to new data which is just not possible with old statistical models like parametric distributions as they struggle to capture the non-linear relationship between variables so require additional manual engineering which takes time and resource.
But does this mean the AI machine is taking over from human trading teams? Absolutely not.
Leveraging the capabilities of AI and combining it with specialist human traders is the optimal approach because you have models that can capture the complexity of esports supported by human traders with a deep understanding of each discipline.
Odds should always be based on true probabilities and while there have been significant breakthroughs in AI – I’m talking about transformer-based models such as Large Language Models – it is still prone to making errors, especially when it comes to forecasting.
Let me explain by way of percentages. AI alone can get you 90% of the way to determining the true probability of an outcome but you need the human specialist trader to get you the final 10% of the way to perfection. And perfection is a must when it comes to odds.
Ultimately, this is what allows operators to offer high-value odds to their customers while ensuring a strong and stable margin from their esportsbook. What’s more, it only takes one small error for sharp, savvy bettors to exploit a mistake and that’s not what operators expect from their data partners.
It must be remembered that AI models are only as good as the data they feed from and still require training. Human traders help in this regard, providing a layer of security for core actions like settlement and odds checking when the model goes off market.
In some instances, the trader will have access to data the model doesn’t see of wasn’t trained on – things like a last-minute change to the player roster.
This is why our human traders are responsible for picking the tournament and market coverage that will most appeal to our operator partners, and our traders are on hand 24/7/365 to support operators in their efforts to offer a top esports betting experience to their players.
The training of AI models is crucial and again sees our trading and data science teams work together during the entire lifecycle of each AI model we build from designing the model to testing and interacting with models in production to ensure they are performing.
This is a virtuous cycle with our data scientists training the most optimal models that prove to be the easiest for our traders to manipulate. Traders also give a ton of deep and detailed feedback which our data scientists can use to improve the models.
The idea here is that the trading team has little input once the model is rolled out and often only make one input per match with the AI model then calculating all of the odds and markets. This ultimate is what powers our BetBuilder and PropBet products.
Having specialist traders for each esports discipline is also important. Each video game is like its own sport and while there are some similarities between some titles, the differences have an impact on the markets and odds offered and that’s exactly why specialist traders are a must.
Take shooter-round based game like CS2 and Valorant and MOBA games like Dota2 and LoL. With the former, there’s a lot of repetition in the gameplay which takes place round after round. This means betting markets are focus on rounds and kills for teams and players.
With MOBA games, there are objectives within the game that have a direct influence on who wins the match – things like kills, towers, nashors, inhibitors and dragons. This is complex – and doesn’t exist in traditional sports betting – and is why pricing teams must master in-game dynamics.
Again, this is something that AI can’t do on its own right now.
AI is a key pillar of our business, and we are incredibly proud of how we have used it in collaboration with our data scientists and traders to create models that deliver top odds for our operator partners and their players.
But working with AI is all about staying ahead of the game and our work is never done. This is why we continue to test, iterate, innovate and do all we can top perfect our models. This would not be possible without our incredible team which stands as a testament as to how machines and humans can work together in harmony.
The post Odds on: Unlocking the potential of AI for esports betting appeared first on European Gaming Industry News.
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Sportradar Reports Fourth Quarter and Full Year 2024 Results and Announces Agreement to Acquire IMG Arena and Its Strategic Portfolio of Global Sports Betting Rights
Sportradar Group AG (NASDAQ: SRAD) (“Sportradar” or the “Company”), a leading global sports technology company focused on creating immersive experiences for sports fans and bettors, today announced financial results for its fourth quarter ended December 31, 2024.
Carsten Koerl, Chief Executive Officer of Sportradar, said: “We are pleased with our strong execution in 2024, achieving record revenue, operating margins and free cash flow generation. Importantly, we continued to build on our key competitive advantages including enhancing the depth and breadth of our content portfolio and further innovating on our product offerings. On the content front, with the extension and expansion of our Major League Baseball partnership, we now have all our existing major rights locked in for an average of six years, providing us with great cost visibility. And with the announced agreement to acquire IMG ARENA’s sports rights portfolio, we will further enhance our sports coverage in some of the most bet on sports globally. This past year we also grew our product offering, launching a number of award-winning products that expand our best-in class product suite and bring fans closer to their favorite sports. Importantly, as we grow our topline, we are at an inflection point for multi-year margin expansion and increasing cash flow, positioning us to deliver meaningful shareholder value for years to come.”
FOURTH QUARTER AND FULL YEAR REVENUE BY PRODUCT GROUP
Revenue
| Three-Month Period Ended December 31, |
Year Ended December 31, |
||||||||||||||||||
| in € thousands (unaudited) | 2024 | 2023 | Change | % | 2024 | 2023 | Change | % | |||||||||||
| Revenue by product | |||||||||||||||||||
| Betting & Gaming Content | 191,783 | 147,747 | 44,036 | 30 | % | 707,119 | 530,099 | 177,020 | 33 | % | |||||||||
| Managed Betting Services | 55,145 | 55,870 | (725 | ) | (1 | )% | 199,871 | 173,391 | 26,480 | 15 | % | ||||||||
| Betting Technology & Solutions | 246,928 | 203,617 | 43,311 | 21 | % | 906,990 | 703,490 | 203,500 | 29 | % | |||||||||
| Marketing & Media Services | 44,282 | 36,445 | 7,837 | 22 | % | 146,919 | 126,629 | 20,290 | 16 | % | |||||||||
| Sports Performance | 11,051 | 10,608 | 443 | 4 | % | 40,366 | 39,758 | 608 | 2 | % | |||||||||
| Integrity Services | 4,809 | 1,916 | 2,893 | 151 | % | 12,281 | 7,744 | 4,537 | 59 | % | |||||||||
| Sports Content, Technology & Services | 60,142 | 48,969 | 11,173 | 23 | % | 199,566 | 174,131 | 25,435 | 15 | % | |||||||||
| Total Revenue | 307,070 | 252,586 | 54,484 | 22 | % | 1,106,556 | 877,621 | 228,935 | 26 | % | |||||||||
| Revenue by geography | |||||||||||||||||||
| Rest of World | 232,298 | 199,738 | 32,560 | 16 | % | 843,791 | 711,613 | 132,178 | 19 | % | |||||||||
| United States | 74,772 | 52,848 | 21,924 | 41 | % | 262,765 | 166,008 | 96,757 | 58 | % | |||||||||
| Total Revenue | 307,070 | 252,586 | 1,106,556 | 877,621 | |||||||||||||||
FULL YEAR FINANCIAL RESULTS
Revenue
Total revenue for the full year was €1,107 million, up €229 million, or 26% year-over-year driven by 29% growth in Betting Technology & Solutions and 15% growth in Sports Content, Technology & Services.
Betting Technology & Solutions revenues of €907 million were up 29% year-over-year primarily driven by a 33% increase in Betting & Gaming Content benefiting from existing and new customer uptake of products and premium pricing from NBA and new ATP product offerings, as well as from overall strong U.S. market growth. Managed Betting Services of €200 million were up 15% driven by strong growth in Managed Trading Services from higher trading margins and increased betting activity from existing and new clients.
Sports Content, Technology & Services revenues of €200 million increased 15% year-over-year primarily driven by 16% growth in Marketing & Media Services with strength in both European and North American ad:s revenue, with a variety of sportsbooks investing in marketing campaigns during the year.
The Company generated strong revenue growth globally with Rest of World up 19% and the United States up 58%. As a percentage of total Company revenues, United States revenue represented 24% of total Company revenue for the full year as compared to 19% in the prior year due to continued market growth, additional customer uptake of our products and premium pricing.
Profit for the period
Profit for the full year was €34 million, in line with the prior year. The strong operating results were primarily offset by a foreign currency loss of €38 million for the full year compared to a €23 million gain last year, due to unrealized currency fluctuations associated with the U.S. dollar-denominated sport rights. The current year also included higher financing costs due primarily to our new ATP, NBA and Bundesliga partnership deals, as well as an income tax benefit of €11 million driven primarily by the recognition of deferred tax assets.
Adjusted EBITDA
Full year Adjusted EBITDA was €222 million, up €56 million, or 33% compared to €167 million in the prior year. The increase was largely driven by the 26% revenue growth, partially offset by increased sport rights costs primarily related to the NBA and ATP partnership deals, higher purchased services driven by investments in developing our product portfolio and increased personnel expenses primarily due to headcount growth and a higher bonus accrual in the current year.
FOURTH QUARTER FINANCIAL RESULTS
Revenue
Total revenue for the fourth quarter was €307 million, up €54 million, or 22% year-over-year driven by 21% growth in Betting Technology & Solutions and 23% growth in Sports Content, Technology & Services.
Betting Technology & Solutions revenues of €247 million were up 21% year-over-year primarily driven by a 30% increase in Betting & Gaming Content benefiting from existing and new customer uptake of our products and premium pricing, led by the addition of new ATP content, as well as from overall strong U.S. market growth. Managed Betting Services revenues of €55 million were down 1% as strong growth in Managed Trading Services from higher trading margins and increased betting activity from existing and new clients was more than offset by the impact a year ago from the one-time initial setup revenues related to hardware deliveries for the new Taiwan Lottery deal.
Sports Content, Technology & Services revenues of €60 million increased 23% year-over-year primarily driven by 22% growth in Marketing & Media Services with strength in both European and North American ad:s revenue as several sportsbooks invested in marketing campaigns during the quarter.
The Company generated strong revenue growth globally with Rest of World up 16% and the United States up 41%. As a percentage of total Company revenues, United States revenue represented 24% of total Company revenue in the fourth quarter as compared to 21% in the prior year quarter due to continued market growth, additional customer uptake of our products and premium pricing.
Customer Net Retention Rate of 127% increased sequentially and from prior year demonstrating our ability to cross sell and up sell to our clients, as well as the market growth in the United States.
Loss for the period
Loss for the period was €1 million, down €24 million, compared to profit of €23 million in the same quarter a year ago, as the strong operating results were more than offset primarily by a foreign currency loss of €38 million in the quarter as compared to a €27 million gain last year, due to unrealized currency fluctuations mainly associated with the U.S. dollar-denominated sport rights. The current quarter also included higher financing costs due primarily to our new ATP and Bundesliga partnership deals, as well as an income tax benefit of €20 million driven primarily by the recognition of deferred tax assets.
Adjusted EBITDA
Fourth quarter Adjusted EBITDA was €61 million, up €21 million, or 53% compared to €40 million in the same quarter a year ago. The increase was largely driven by the 22% revenue growth, partially offset by increased sport rights costs primarily related to the ATP partnership deal, higher purchased services driven by investments in developing our product portfolio and increased personnel expenses primarily due to headcount growth and a higher bonus accrual in the current year.
Additional Business Highlights
- Announced the extension and expansion of our partnership with Major League Baseball (“MLB”) for 8 years, beginning with the 2025 season. Sportradar will exclusively distribute ultra-low latency official MLB data, media content, including MLB Statcast Data, and audiovisual content across our global client network. Additionally, Sportradar and MLB will collaborate on the creation of AI-driven products powered by player tracking data to create immersive, hyper-personalized fan experiences.
- Announced the extension and expansion of our partnership with UEFA covering all UEFA Club and National team competitions, which includes over 900 high-profile matches, a 33% increase from the previous agreement.
- Announced a new long-term partnership with UTR Sports for the UTR Pro Tennis tour, the top tennis tour for rising professionals. Tennis is the second most bet on sport and UTR provides Sportradar with a consistently high volume of tennis matches throughout the year.
- In partnership with the NBA, launched a suite of next generation products and solutions for the 2024 – 2025 season including 4Sight Streaming, emBET, Live Match Tracker and advanced visualizations.
- Introduced micro markets for ATP tennis and basketball, expanding this cutting-edge product to tennis from other popular sports such as soccer and table tennis.
- Enhanced ad:s marketing services providing the most comprehensive 360 degree solution for customers with the launches of new channels including paid search and audio, and the addition of affiliate marketing capabilities through XLMedia.
- Opened an office in São Paulo, Brazil, marking a major milestone in Sportradar’s strategic expansion into that country and across Latin America.
Balance Sheet and Liquidity
The Company’s cash and cash equivalents were €348 million as of December 31, 2024 as compared with €277 million as of December 31, 2023. The increase was primarily driven by net cash generated from operating activities of €353 million due to strong operating performance, partially offset by net cash used in investing activities of €255 million, primarily from the acquisition of additional sport rights, most notably its new NBA and ATP deals, and the acquisition of assets of XLMedia, and from net cash used in financing activities of €37 million, due primarily to share repurchases. Free cash flow for the year ended December 31, 2024 was €118 million, an increase of €67 million from €50 million in the same period a year ago.
Including its undrawn credit facility, the Company had total liquidity of €568 million at December 31, 2024 as compared to €497 million as of December 31, 2023, and no debt outstanding.
2025 Annual Financial Outlook
Sportradar is targeting fiscal 2025 outlook as follows:
- Revenue of at least €1,273 million, representing year-on-year growth of at least 15%
- Adjusted EBITDA of at least €281 million, representing year-on-year growth of at least 26%
- Adjusted EBITDA margin expansion of at least 200 basis points
- Free cash flow conversion1 rate above the 2024 level of 53%
The 2025 guidance does not include any impact from the pending acquisition of IMG ARENA given the uncertainty around the timing of close. Guidance will be updated to incorporate the uplift resulting from this acquisition upon closing.
Share Repurchase Plan
In March 2024, the Board of Directors approved a $200 million share repurchase plan and commenced purchases during the second quarter. During the quarter ended December 31, 2024, the Company repurchased approximately 467 thousand shares for a total of $5.7 million. For the full year 2024, the Company repurchased 1.8 million shares under the plan for a total of approximately $20.3 million.
Subsequent Event
This morning, Sportradar announced it has entered into a definitive agreement with Endeavor Group Holdings, Inc. to acquire IMG ARENA and its global sports betting rights portfolio. IMG ARENA’s portfolio will enhance Sportradar’s content and product offering and further strengthen its strategic position as a leading content provider in the most bet upon global sports, including tennis, soccer and basketball. Under terms of the agreement, IMG ARENA will provide financial consideration totaling $225 million (subject to customary purchase price adjustments), comprised of $125 million cash paid to Sportradar and up to $100 million cash prepayments made to certain of the sports rightsholders. Sportradar will not be required to pay any financial consideration to the Endeavor Group.
With its highly scalable technology platform and extensive client network, Sportradar will seamlessly integrate and monetize these rights, driving incremental value for clients, partners and shareholders. This addition will further accelerate Sportradar’s robust revenue, adjusted EBITDA and free cash flow growth and will be immediately accretive to adjusted EBITDA margins.
IMG’s portfolio of global betting rights comprises strategic relationships with over 70 rightsholders covering approximately 39,000 official data events and 30,000 streaming events across 14 global sports on six continents. Prominent properties include Wimbledon, U.S. Open, Roland-Garros, Major League Soccer, EuroLeague basketball, and PGA Tour, amongst others.
The transaction is subject to customary closing conditions, including regulatory approvals, and is currently expected to close in the fourth quarter of 2025.
Conference Call and Webcast Information
Sportradar will host a conference call to discuss the fourth quarter and full year 2024 results today, March 19, 2025, at 8:30 a.m. Eastern Time. Those wishing to participate via webcast should access the earnings call through Sportradar’s Investor Relations website. An archived webcast with the accompanying slides will be available at the Company’s Investor Relations website for one year after the conclusion of the live event.
The post Sportradar Reports Fourth Quarter and Full Year 2024 Results and Announces Agreement to Acquire IMG Arena and Its Strategic Portfolio of Global Sports Betting Rights appeared first on European Gaming Industry News.
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