Risk seems inherent to sports betting, so suppliers promising to underwrite sports betting losses may seem like a unique approach. But interest is piqued among operators. iGB speaks to Richard Thorp, director at RPM Gaming and consultant for Atlas-IAC, and Sergei Efimenko, CEO of Atlas-IAC about their new no-risk sportsbook product.
The claim of a no-risk sportsbook – brought about by a collaboration between RPM Gaming and software provider Atlas-IAC – may raise some eyebrows: after all, sportsbooks are all about risk. But the concept can be explained rather simply.
“The idea is, if you are a casino operator, we will integrate as an iframe into your platform – but we will underwrite all the risk,” says Richard Thorp, director of RPM.
“So the simple pitch is: take the frame, plug it in, and we’ll run a sportsbook as another vertical kind of product.”
In taking away the fear of losses resulting from bad trading, Thorp says the product has a clear appeal to operators who are used to games where the house can’t lose.
“It would mainly be for casino operators, bingo operators, lottery operators – operators who have perhaps got a poker network, but don’t want to lose betting customers to other operators during major sporting events.”
“If you have a losing month or a losing week or losing day, it won’t be on the operator, it’ll be on Atlas-IAC. Atlas will cover those costs,” explains Thorp.
Along with being no-risk, the sportsbook also has the ability to spot integrity issues. This, he says goes hand-in-hand with the underwriting, as a sportsbook that struggles to identify potentially suspicious bets always risks generating large losses.
“So, whatever previous concerns may’ve been – betting just before an event starts, betting at a time where there potentially is a dodgy feed, we know we have the tools to spot that and correct it,” he says.
“As a result, for us, underwriting isn’t really a big challenge, but we are willing to do that on a revenue-share model.”
Eliminating the risk
The product was created partly due to what Thorp describes as a lack of knowledge about the betting sector, which he says has permeated the industry.
“Quite a lot of people – especially in previous roles I’ve had – often looked at sportsbooks as being a high-risk offering, a volatile kind of area to operate in,” he says. “The idea behind it is mainly aimed at casino operators or other single-product operators, especially ones that aren’t used to a sportsbook solution itself.”
“For example, they wouldn’t want to have a trading team; they wouldn’t understand any risks involved in running a sportsbook.”
Both Thorp and Efimenko emphasise a seemingly critical point of the product: it doesn’t require monitoring,
“You literally don’t have to burn any fuel managing it,” says Thorp. “We’ll be looking after everything. And if there is any downside, we’ll underwrite that.”
Efimenko agrees, and ponders why casino-first operators don’t simply add a sportsbook to their offerings.
“We’re here to question why some operators who have, let’s say, casino or lottery poker, don’t now add a sportsbook,” says Efimenko. “We have the tools and track record to make it a seamless reality with no downside.”
“We can deliver an attractive, additional vertical which is both complementary and profitable to their businesses – and we don’t need to do much for integration. In fact, we already have examples of existing partners successfully integrating inside three days – not even three days, three nights.”
Underwriting the effort
Advertising any product as no-risk is a bold move. But Thorp remains confident in the sportsbook product, relying on its testing as proof.
“The tools are tested and proven,” he says. “We’re confident in the automation, we’re confident in knowing how to manage your customer base, premised on their history and the patterns of behaviour.”
This confidence is part of why the partnership between RPM Gaming and Atlas-IAC was formed in the first place. Efimenko says reputation was a critical part of the union.
“When you speak to people, when you do business with people, you need to understand their background,” says Efimenko. “It’s a small industry, so you can ask around.”
“When you get transparent honesty and a clear understanding of all the processes, trust and efficiency naturally ensue.”
While trust forms the crux of any deal, the product in question must also be viable in the market. When asked whether he believes this will be a competitive product in the market, Efimenko shows full faith in the no-risk sportsbook.
“Yes, primarily because of the peerless automation we offer in risk-management,” he says. “In short, we are a secure proposition. Accordingly, we can bring security and peace of mind to any company that partners with us, taking the typical pressure points and management concerns out of the sportsbook process.”
When asked the same question, Thorp agrees, but notes that the business is in uncharted territories.
“I do. I also feel nobody’s really done this before as well – at least competently – from what I can see,” he says.