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Simon Trim, strategic adviser to the world leaders in tennis pricing 10star, explains how the landscape for the sport will change from 2024.

After more than a decade of supplying tennis data, news recently broke that IMG had been replaced as the official distributor of ATP Tour data by Sportradar.

While the official price tag for the rights to the data hasn’t been revealed, the price will certainly be in the high hundreds of millions for a six-year deal.

Given the importance of tennis to sportsbooks around the globe – and the established nature of the in-play product that this information “live from the umpire’s chair” underpins – the successful bid is great news for Sportradar’s strategy of acquiring more of the premium-level official data that powers top-tier betting content.

But what does it mean for the sportsbooks themselves?

Details of any sub-licensing are yet to appear, but there is a possibility that operators powering their existing tennis product through an IMG or Genius Sports feed will be forced into a technical re-integration exercise.

While this may be a discomfort, it isn’t catastrophic.

But it’s also likely, given the eye-watering size of the deal, that some of the price tag is going to be loaded onto the operators, especially given the recent history of spiralling data rights’ costs being passed on to sportsbooks themselves.

For operators, the prospect of diminishing returns on such a commercially important sport like tennis is a worrying one.

Even the largest operators have a limit to what they will pay for official data, and for the longer tail of operator currently powered by cheaper sub-licences, the increase in cost could be significant.

For those operators that choose to maintain the use of official data it is going to be vital that the in-play prices they generate from it can maximise their hold on turnover.

Unfortunately, for many, their existing pricing solutions are not capable of this.

The original deal IMG struck with the ATP for data back in 2014 was in many respects the seminal “official data rights deal” and many of the operators that signed up then will have been taking a price feed from the same third party supplier ever since.

However, much has changed in the industry over the last decade to squeeze margins – escalating cost of operations, expensive market access deals, heightened social responsibility measures alongside tougher macro-economic conditions – but the quality of prices being offered by the existing B2B supply chain hasn’t kept pace. 

Given a re-integration of a new feed might be on the cards for many operators, now is also a good time to review how good the pricing service they currently receive is.

To help with this, 10star have recently released a range of SaaS analytic tools and services, called neural, that assess all aspects of a sportsbook’s business from an anonymised data set – including customer skill, market performance and model weaknesses – that can help improve existing performance and identify if a change in provider would yield meaningful improvements. 

10star are the world leaders in tennis pricing, trading and risk management, formed in 2020 following Magnus Hedman’s acquisition of specialist tennis market maker Jasis.

As well as being the primary liquidity provider for betting exchanges, Jasis has also been supplying the world-renowned Pinnacle sportsbook with tennis pricing, trading and risk management services since 2016. 

Given the tendency of the B2B supply chain to copy its prices from both Pinnacle and Betfair it could be argued that 10star is already driving the world market when it comes to tennis trading. 

However, there is a huge difference between taking a service supplied directly by the experts and paying fees to a supplier for an offering that is based on copying those prices. While Pinnacle’s tennis prices are visible to the industry, the underlying 10star probabilities that power these odds and the liquidity they generate are not.

The outcome is that the industry is blindly following a “black box” with no understanding of how the odds are generated and, crucially, no capability to risk manage in-play.

Given that approximately 90% of pretty much every sportsbook’s action on tennis occurs after the game has started, handing over responsibility for this revenue to a supplier that can’t manage it won’t do anything to reverse margin decline. 

Herein lies one of the key problems that the betting industry currently faces. 

Although unbelievable now, in-play was a “new kid on the block” only 15 years ago, with many sports betting operators having little or no in-play product available.

The outcome was that in-play brought them a whole new revenue stream, made more accessible by a shift in consumer behaviour to online from retail, traded from low tax jurisdictions and powered by cheap data.

The result? No need for price differentiation and no need to manage risk – why bother with the expense of an expert trading function when treating betting odds as basic content offered the chance of huge cost savings from buying in lines from suppliers that aggregated market prices. 

That’s largely the supply chain that exists to this day, even though the industry it supplies is a much tougher place.

This is where 10star is different.

Not only have we developed best-of-breed tennis models, we use the liabilities that are generated by the wagers themselves as inputs into the prices we produce, rather than risk manage as an after-thought or ignore it altogether.

Moreover, our tennis model – and all our models – are fully correlated, meaning that if there is a change in the price of a player to win the match caused by liabilities that have been generated on that market, the change flows down through all the related derivative markets automatically. 

Similarly, exposure in derivative markets such as next point or game winner flows back up the model in the same way. 

Using automated risk correlation as the framework of the 10star model makes our models unique in their capability to manage liabilities that are generated in play, ensuring that our partners are optimally positioned in the market to maximise their revenue, right until the last point is played.

All prices move in unison, ensuring operators can’t be “picked off” by markets that haven’t been updated.

Any information from “sharp bettors” is automatically accounted for by the price changes the model makes, overseen by a team of expert traders.  

Furthermore, a decade of managing liquidity generated from the betting exchanges (where the counterparts are anonymous) means we can manage all types of betting turnover from all types of customers, giving our partners the confidence to stand larger positions and lay bets to more skilled or retail customers that are otherwise turned away.

Lastly, our market-leading multiples/combination risk management algorithms mean that we deliver market-leading returns on turnover across all forms of betting, pre-match as well as in-play. 

10star’s expertise in tennis and our ability to provide expert pricing alongside efficiently correlated risk management provides a solution for operators that are trying to pull their businesses out from the industry black hole they have been sucked into, either by following a business model that is no longer fit for purpose or being dragged back by existing suppliers that can’t keep up. 

On the surface, a change to an official data rights provider isn’t particularly important but if operators also use it as the catalyst to pivot from a failing business model then it could present them with a game-winning second serve.

10star is a new, world-leading pricing, trading and risk management service for sportsbooks, gaming and lottery operators.

10star won’t be following the market; it will make it.

A fully integrated solution that provides operators with made-to-measure risk management on top of market-leading pricing and trading, 10star brings the discipline and innovation of financial markets to the betting industry to help generate “alpha” on everything from a single esports title to a fully managed trading service—that means higher returns, lower volatility, operational efficiency and bottom-line uplift.

From the same owner of industry-leading operator, Pinnacle, 10star is launching to enable operators to outperform in increasingly challenging markets.

For more information, visit 10star.com

Simon Trim has over 25 years’ experience in the betting industry, including 15+ at board level. A driving force in bringing the sophistication of spread betting to power the growth in the B2B fixed odds market, he is now strategic consultant to premium market-making and risk management service 10star. 

Recently launched by the same owners as Pinnacle, 10star is looking to utilise this heritage to modernise the sports betting industry by bringing some of the data innovations and risk management techniques of the financial markets to improve the bottom line for sportsbook operators.

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