Taking On The Betting Exchange Market

Mark Brosnan, CEO at Matchbook, speaks to Sport Industry Group about taking on the sport betting exchange big players and how the market needs to continue to adapt in order to survive…

Many other betting exchanges have tried to take on Betfair’s dominance of the sport betting exchange market, what lessons can you take from others who have tried and failed in the past? 

The fundamental aspect of an exchange, be it a financial exchange or a sports betting exchange, is making sure that you have the liquidity across all key sports, markets and events. A lot of the other exchanges have come and gone – I count up to 34 – all of those were trying to compete with Betfair, or mimic them, in terms of the platform itself and didn’t necessarily have the liquidity to back it up. Our focus on liquidity has been key. Our approach has been to offer a market thoroughly before we add further markets. We never want to add a market that has less liquidity than the next best out there. So when we added football, we made sure it was as good as, if not better, than the nearest competitor.

We have taken a very slow and disciplined approach around building liquidity which is why we only added horse racing in 2016, but we did so when horse racing was as strong as any of our competitors. We are now in a scenario where the product offering on Matchbook is very consistent: its deep liquidity and it is operating on a very low margin. Apart from Betfair, we are the only other betting exchange that has a really strong offering across all of the top ten sports. While Betfair has strong horse racing and soccer markets, we do as well, plus very strong markets for American sports (NFL, NBA, NHL and MLB). Our core difference has been the concentration, focus and discipline around building that liquidity – we have a liquidity first strategy, but now we are at a point where we are building technology to make it an attractive product for users.

Matchbook has also invested heavily in horse racing, particularly through its partnerships with the likes of Glorious Goodwood and Hayley Turner. Do you expect this investment to be mirrored across all of your new markets as you continue to grow?

Yes, we absolutely do. Now that we have a complete product and a new technology stack, we’re seeing a lot of value from our sponsor partnerships with Goodwood and The Jockey Club. At the moment we are exploring more opportunities in horse racing, but across other sports as well. Moving forward, we must ensure that we select the right type of partnerships and sponsorships to drive an awareness around the ever-growing Matchbook brand.

You are making a very conscious effort to take your growth one market at a time, why is that? 

It has been a crucial part of our business to take it one market at a time. The level of focus that it takes to build a market that provides low margin liquidity is huge. Taking it one market at a time has allowed us to confidently deliver a consistently strong product that customers can rely on.

Fortunately, we’re at about 90% of the target we set out for our core sports liquidity. And so far it’s yielded a lot of benefit. We now have very deep operational and domain expertise across each sporting market, that we feel can be maintained.

What does the future hold for betting exchange markets? 

Betting exchange markets are going to grow, although I think they need to adapt quite significantly. Betting exchanges are coming to realise that they have the same offering as a sportsbook but have a far greater functionality. Exchanges are far better placed to help build a new generation of e-commerce platforms with personalisation, simply because anyone that owns a betting exchange, owns their own technology as well as their own data. I think anyone that is building a betting exchange has a lot of technical ability, and that technical ability will allow them to build a whole new generation of betting platform overall.

This year you have put significant investment into your Matchbook Traders Conference, which took place earlier this month, how do you see the day as something that will grow your brand?

We are big believers that if you build a strong product, a lot of the marketing will be done by your customers. Coming back to our liquidity pool, a key element to ensuring you have good liquidity and good vibrant markets is making sure that you have people in there that understand how to trade. The trader segment gets a lot of focus from us because we can deliver a lot of value in terms of liquidity, low-pricing and strong technology. Having a forum for those traders to come together and learn new techniques and a new strategy is very important for our eco-system. It serves to yield a more educated and vibrant traders community which will lead to more liquidity in our markets and ultimately a better user experience for our customers.