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IMG Arena bets that golf is a ‘sleeping giant’ for sportsbooks

(Stuart Franklin/Getty Images)

  • Lack of in-play betting markets on golf blamed on difficulty of data collection
  • IMG Arena to employ between 75 and 80 data scouts for European Tour events
  • Data distributor to bundle streaming rights to two par-3 holes per round into data product

Side bets on the longest drive or the player nearest the pin might be standard fare in the average club fourball or corporate golf day, but until now the ability to wager on professional golf has been a lot more limited.

Sportsbook operators have tended to offer customers the chance to place pre-event bets on outcomes like the outright winner of the biggest tournaments but have generally stopped short of offering more detailed in-play markets. Analysis by H2 Gambling Capital and IMG Arena suggests 95 per cent of the gross win [sportsbook revenues before operating expenses] on golf is derived from pre-event betting – a figure that compares unfavourably with tennis and football.

The greatest impediment to a wider array of gambling opportunities in golf has always been the complexity and expense of capturing the enhanced data on which bookmakers depend to price their live markets.

“Unlike a basketball court, or a tennis court or indeed a soccer pitch, which are all environments that are relatively standardised between the different venues and are all environments which are reasonably easy to control in terms of the variables, every [golfing] venue you visit will be different,” says Max Wright, senior vice-president, commercial, IMG Arena.

The recently-launched sports betting content division of IMG Media, formerly known as IMG Gaming, is taking a calculated gamble that it can change this, having acquired the worldwide data rights to the both the PGA Tour and European Tour earlier this year. For it to succeed in commercialising them, it will have to develop a data capture system for the 40-plus events on each calendar that will be sufficiently streamlined to keep costs low, while simultaneously satisfying the demand from bookmakers for fast and accurate data. Sportsbook operators will in turn have to trust that they will be able to create enough demand for in-play markets on golf to justify buying the data in the first place.

IMG Arena will provide bookmakers with detailed information about ball lies and on course conditions to help bookmakers price in-play markets. (Photo by Patrick Smith/Getty Images)

Volume and a shot-by-shot format

The number of tournaments and the duration of play in golf is both a strength and a weakness for a data distributor like IMG Arena. Betting companies are known to favour sports with high volumes of content in which multiple match actions are taking place simultaneously because they offer the opportunity to create a larger range of instant betting markets. The most successful exemplar is tennis, which provides a huge number of matches to bet on year-round and a shot-by-shot format that is appealing to sportsbooks.

“When you compare the suitability of certain sports to a live betting format, golf stacks up incredibly well,” argues Wright.

“Sports like tennis have proved themselves hugely popular for live betting because every time a point is contested it throws off the rapid creation and settlement of a fresh batch of betting markets and customers can have their bet settled and their stakes returned to them almost instantly. This has led to a huge growth in the contribution of sports like tennis to the overall sportsbook revenue make-up.”

But whereas data capture is the job of one or two data scouts at most tennis events (often the umpire acts as the scout, inputting match information into a tablet), many more staff will be required to collect information in golf – at least where European Tour events are concerned.

Although Wright says IMG Arena is still in ‘an R&D phase’ to create an efficient data capture system for the latter tour, he estimates around 75-to-80 data scouts, operation and management staff will typically be required at each tournament on the European calendar.

“Every hole needs to have a number of scorers who are placed strategically to ensure that we’ve covered every possible scenario,” he says. “If you take a par-4 hole, we will have a data scout behind the tee box, we will have another data scout in the landing zone where the majority of the drives will end up, and we will also have another data scout behind the green.”

For the PGA Tour, the company plans to reduce data collection overheads by upgrading the tour’s pre-existing ShotLink system. This a proprietary data capture solution powered by cloud computing solutions provider CDW that has been providing media outlets with data about shots that have taken place, live conditions and distances for upwards of 20 years.

“ShotLink is fantastic but it hasn’t been at the levels of speed required for the sports betting sector,” says Wright. “One of the things we’ve been doing with the PGA Tour since we signed our agreement last year is working with them in ensuring their processes are as efficient as possible, working with them on things like workflow and at what point their scouts will enter in different pieces of data, helping them with ideas around the design of the software and use for that data capture, positioning of scouts on certain holes to ensure they are in a position to be able to deliver against certain service levels that a sportsbook would expect from a live data service.”

For both tours, IMG Arena will supplement manual data collection with GPS technology and greenside cameras to provide an additional layer of data capture. Wright says the greenside cameras digitally plot the area of the green and are able to pick up incoming golf balls and then track their movement around the green in real time. Providing distances which are accurate to less than the width of a golf ball, they are designed to track and measure all activity on the green and provide that information instantly within the scoring feeds to facilitate live betting on putts. He stresses that data scouts located alongside the greens will provide an extra layer of scrutiny on the data points created by the additional technology.

Expense

Add the travel, subsistence and accommodation expenses for each member of staff to the technology overheads, and the costs in providing a data service for golf increase rapidly in comparison with sports like tennis and football. This is especially the case for the European Tour, where no data-gathering infrastructure currently exists. The question for IMG Arena is whether it can encourage enough bookmakers to invest in its golf data to justify its outlay on the data rights and data gathering operation.

The company was not willing to reveal how much it paid for either set of data rights, but one data-rights expert contacted by SportBusiness gave a qualified guess that the fee for the PGA Tour’s betting data would not have been significant. IMG already has a broad, ongoing relationship with the PGA Tour and the person in question thought the data deal ought to be viewed as the two companies exploiting an additional niche in their cooperation rather than as a sizeable deal in its own right.

(Mike Ehrmann/Getty Images)

The default pricing mechanism for selling betting data to sportsbooks is a rate card concept based on the cost of collecting the information. If IMG is using the same mechanism for golf, that means some of its overheads would inevitably have to be passed on to bookmakers. An additional assumption is that the price a bookmaker would pay for the data would be based on the scope of exploitation, so a pan-territory or global operator would pay more for the data than one operating in a single territory. Bookmakers that have pre-existing deals with IMG Arena might also expect to be offered a discount.

Wright is also reluctant to discuss the price point for its golf data, saying only that all of its agreements with betting operators will be “structured in such a way as to incentivise all parties to grow the reach and appeal of golf as a betting sport”.

He adds that the company is still in the process of developing its golf data collection service with plans for the first relationships with betting operators to go live in 2020. In the interim, the company is engaging in discussions with sportsbooks to help them understand its offering.

One sportsbook contacted by SportBusiness said it had held early conversations with the company about the service but was yet to discuss the pricing of any deal. The operator said IMG’s status as trusted data distributor in tennis and the sophistication and investment it had made in the golf data service meant there was ‘every opportunity’ for the product to succeed.

Another data rights specialist said an “aggressive” price point and the absence of the data rights to the four golf majors had so far deterred any bookmakers from purchasing it. He thought the ability to offer in-play markets on these leading tournaments would be appealing to sportsbooks because of their proven ability to attract casual bettors.

When asked if IMG Arena was planning to add the majors to its golf data offering, Wright said: “We have been talking with all of the major championships about bringing their rights into the solution we have created.

“We think the major championships would benefit hugely because they would not only be able to drive incremental revenues through the distribution of this content but also be able to have an improved level of integrity management and visibility included into how the sports betting sector was using their IP and presenting their data.”

Rory McIlroy of Northern Ireland celebrates with the trophy after winning The Players Championship. The tournament is included in the PGA Tour data rights package. (Gregory Shamus/Getty Images)

Streaming

To further encourage betting companies to buy the product, IMG Arena will bundle the streaming rights to two selected Par 3 holes per week into the data package it makes available to betting companies for both tours.

“When we think about delivering a sophisticated sports betting product for golf, that needs to contain elements of audio-visual streaming as well to generate that similar level of excitement and the easiest way to do that is by streaming the par 3s,” says Wright.

“You have a smaller requirement in terms of the number of cameras on any hole and it also translates incredibly well for consumers who might not necessarily be so fluent in the world of golf. They can watch a par 3 and instantly make a judgement about whether a player is more likely to hit their ball nearest the pin.”

The coverage will be hosted on the IMG Arena’s Golf Event Centre, a front-end digital environment which can be white labelled by each betting operator to curate the fan betting experience. This will offer digital graphical rendering of each of the holes at every event and the ability to favourite specific players, follow specific groups or watch a particular hole as different groups of players come through.

One of the bookmakers contacted by SportBusiness said the speed and accuracy of the IMG data would be the primary concern for betting operators, but the value-added features of the event centre were a compelling addition. He thought bookmakers would most likely integrate this product into their own apps to give a trusted and seamless experience.

As with the legalisation of betting in certain US states, the consensus is that the creation of more in-play markets will help to increase fan engagement around PGA and European Tour events and give fans and non-fans a greater incentive to watch more holes.

“The idea is to generate interesting markets that provide golf fans with a new way to engage with PGA Tour events,” says David Miller, vice-president & assistant general counsel at the PGA Tour. “We expect to see live betting markets for every shot in PGA Tour competition.”

Marcus Kinhult of Sweden poses with the trophy following his victory during day four of the Betfred British Masters at Hillside Golf Club in Southport, United Kingdom. Betfred’s sponsorship of the tournament shows its appetite to encourage more betting on the sport. (Andrew Redington/Getty Images)

Integrity

Miller estimates the illegal market for betting on golf to be in the range of $1bn to $2bn a year in the US. The hope for the relationship with IMG is that those revenues can be directed back to the sport.

To protect the value of its data rights, and help IMG’s ability to monetise them, the organisation continues to lobby for bookmakers in the US to be required to purchase official data as sports betting is legalised in certain states.

But even without such legislation, Wright thinks the complexity and size of the operation needed to gather data at golf tournaments will dissuade unauthorised data scouts from trying to provide a cheaper data product to bookmakers.

“There are pieces of information that we are able to deliver that you simply cannot get without that inside-the-ropes access of the data scouts,” he says. “As the players are walking up to their balls, our landing zone scorer is able to find the ball for each of the players and plot an accurate GPS coordinate of where it is but also to note down incredibly detailed lie positions and that information is incredibly valuable from the betting operators’ point of view.

“That’s just information that you wouldn’t be able to get – either from the broadcast or an unofficial data service – where you have people standing outside of the ropes trying to second guess.”

In spite of these difficulties, Miller says that the PGA Tour has already caught unofficial ‘scouts’ gathering data at its events and that its on-site security teams have been briefed to monitor this type of activity.

“It’s a violation of our on-site policies, and potentially a criminal activity depending on the jurisdiction, so we remove the individual from the premises, investigate and coordinate with the local authorities,” he says.

IMG Arena’s experience of operating data products in tennis will also alert it to the threat of ‘courtsiding’, a phenomenon which has regularly reared its head in the sport, particularly in lower-tier tournaments. This is where a spectator sat courtside passes on, or uses, information which leads to bets being placed on in-game markets before the bookmakers receive information from the official data scout and has the opportunity to change the odds due to the in-play happening. In some instances, courtsiders have bribed umpires to delay inputting scoring data long enough for them to place a bet on a point that has already taken place.

Another imperative will be to prevent match-fixing by players. To defend against this, the European Tour and PGA Tour will both use Genius Sports’ bet monitoring system which coordinates with bookmakers and regulators to identify irregular betting activity. The system compares real-time odds movements from global betting markets with predictive algorithms, providing automatic alerts for any irregular activity.

The PGA Tour’s deal with Genius stretches back to 2017 and has included a full-scale review of the tour’s rules around betting and the development of a digital education module that tour professionals and caddies have to take. Genius Sports’ relationship with the European Tour is more recent and does not include such a significant player education component because the European Tour’s Golf Integrity Unit is taking the lead on this element.

“Our primary responsibility is to our players. We will educate and support all professionals to ensure they have the right guidance and understand the latest golf betting regulations,” said European Tour chief operating officer Keith Waters when the deal with IMG Arena was announced.

The likelihood of a match-fixing scandal is reduced by the fact that lower-tier golf events are not included in the scope of IMG’s data deals with either tour. An Independent Review of Integrity in Tennis published last year indicated that betting issues were much more common in the development base tier of the ITF World Tennis Tour, where the lower prize money makes it easier to corrupt players.

Tiger Woods of the United States speaks to the media during a press conference prior to the 2019 PGA Championship at the Bethpage Black course in New York. None of the four golf majors are included in IMG Arena’s data packages. (Mike Ehrmann/Getty Images)

Margin

There are other respects, however, in which golf might want to follow the path created by tennis. After initial scepticism, in-play betting on the sport has grown to the point where it provides the third most lucrative live market for bookmakers after football and basketball. Sportradar’s five-year deal with the International Tennis Federation, from 2017 to 2021, worth about $14m per year, offers a potential benchmark for the European and PGA Tour’s ambitions. The endpoint for golf will be to build the appetite for in-play betting and increase the value of its data rights to the point where it can command similar fees.

“We’ve been calling golf the ‘sleeping giant’ of sportsbook products and when you consider all of these characteristics it’s easy to see why,” says Wright.

“In the coming years, having this market-leading solution for golf will be a major factor for sportsbooks in sustaining customer interest and we fully expect the product to more than pull its weight as a customer acquisition and retention tool.”

 

*David Miller, vice-president & assistant general counsel at the PGA Tour spoke to SportBusiness courtesy of Betting on Sports America, the largest dedicated sports betting trade show in the US. For more information, click here.

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