Tottenham Report: The impact of the Sportradar IPO By Scott Longley October 13, 2021 at 10:00 pm Sportradar’s initial public offering follows Genius Sports’ IPO earlier this year and with IMG Arena owner Endeavor now also listed, it leaves Stats Perform as the only one of the major data and streaming suppliers remaining in private hands. The enthusiasm for high-profile suppliers of the betting and gaming sector is understandable, given the levels of interest now being generated by the U.S. sports-betting and igaming sectors. In fact, investor fervor for this growth story is now at unprecedented levels. If the U.S. sports-betting and igaming markets are currently a gold rush, then the likes of Sportradar are very much the providers of the picks and shovels. But the significance of the Sportradar IPO is far broader than just being a U.S. play. As can be seen when looking at the prospectus for the company, Sportradar is a global player in an integrated betting and gaming sector with Europe very much at its heart. Indeed, of its total revenues at present, the U.S. made up only 11% in the first six month of 2021 (€34.4m), while the rest of the world betting and AV revenues made up the remainder of the €404.9m revenues for the six months to June. These revenues come from data services, other betting services such as the company’s Managed Trading Services (MTS) division, and the streaming services to bookmakers, while other business lines include virtual sports business and the Ad:s programmatic advertising offering. In other words, this isn’t just one pick, but a multiplicity. What does it mean to have large, listed suppliers? An obvious point about the supply side generally is that the bigger these businesses are and the faster they grow, the more they can invest in the product. At the recent SBC Summit in Barcelona, Sportradar CEO Carsten Koerl made a keynote speech where the subject was digital transformation. When it comes to some of the mega-trends, Koerl suggested the greater adoption of technology would be hugely influential on the connected worlds of sports, sports betting, and media. “Our industries are combining with each other,” he told the audience. “We see media companies expanding into betting, leagues expanding into broadcasting, and betting and broadcasters moving into betting.” Central to this, Koerl went on, is technology. “We believe that technology is critical to shaping and powering our data and will shape the future of sports and empower our customers.” The drive toward ever greater implementation of technology will shape the relationship between the operators and the suppliers even more profoundly. Pointing to the use of AI in the MTS offering, Koerl made the point that the system now analyses the activity of 1.1m accounts per day, analysing customer spending patterns and helping operators to optimise their players and their profitability. The kind of investment inherent here is arguably best achieved via a publicly listed company. Sportradar, for instance, raised more than $500m from the float, cash that will go toward developing its product offering, either organically or via acquisition. The company’s competitors will be doing the same. Significantly, rival Endeavor made a splash at the end of September with its $1.2bn buyout of the OpenBet business from Scientific Games. On the call that accompanied the news, Endeavor management made the case that they see their move as being a part of an attempt to keep pace with their rivals in terms of capability and investment. While the investor interest in the betting and gaming sector is definitely skewed toward the U.S., the global nature of the business shines through the news from the likes of Sportradar, Endeavor, and Genius Group. What drives both the sports-betting sector and the supply businesses that sit behind it are that they are both shaped by consumer demand. For sports betting, in the U.S. now as well as the rest of the world, it relies on mobile in-play betting and as Koerl said in the conclusion to his SBC Summit speech, the industry will need to think “many steps ahead of the consumer.” “The most innovative companies will be best positioned to provide the most advanced products and services at scale.” This casts the IPO of Sportradar and the other recent corporate moves in an interesting light. To keep up with consumer demand, global betting and gaming is fighting against other consumer-facing sectors for attention and ultimately revenue. Maintaining relevance demands a supply side that is well-funded and ambitious to extend its offering. The approach taken by the sector leaders, then, will only benefit the operators and this will become ever more evident in the years ahead. Scott Longley has been a journalist since the early noughties, covering personal finance, sports and gambling. He writes for a number of online and print titles.