As online gambling bookmakers explore ways to break out of an increasingly crowded field, all roads are leading to transformations in the betting experience that rely on real-time video streaming technology. Like any new market going through the hockey stick phase of growth, the internet-hosted sports betting and casino gaming market has ignited a competitive… Continue reading Why Online Gambling Prospects Hinge on Real-Time Streaming
As online gambling bookmakers explore ways to break out of an increasingly crowded field, all roads are leading to transformations in the betting experience that rely on real-time video streaming technology.
Like any new market going through the hockey stick phase of growth, the internet-hosted sports betting and casino gaming market has ignited a competitive stampede that makes it ever harder for providers to reach profitability. That’s why the past year has witnessed a surge in new approaches to drawing bettors’ participation.
But most such efforts have been constrained by the latencies and unidirectional limitations imposed by traditional streaming technology. In contrast, streaming infrastructure that can be used to engage any number of people in video-rich interactions simultaneously with no perceivable latency opens the door to a far more compelling range of possibilities.
Most real-time streamed enhancements are in line with the most popular new strategies. Real-time streaming makes it possible to synchronize latency-free mass audience viewing in conjunction with widely pursued support for micro-betting on live sports and esports action. Providers can enable group participation in virtual-reality (VR) casinos, another increasingly popular arena for betting service differentiation. And no matter what type of scenario is in play, video-rich socialization can make any online gambling service more compelling to end users.
As futuristic as such strategies might seem, there’s really no heavy lifting involved when it comes to building a foundation for real-time streaming. Online bookmakers can simply work with Red5 Pro to set up their data flows on the widely deployed multi-cloud Experience Delivery Network (XDN) platform, which is supporting myriad use cases across business sectors worldwide.
In all of these fully operational scenarios, providers are able to stream high-resolution video in any direction at any scale over any distance with end-to-end latencies registering at no more than 200ms-400ms. Even lower latencies become possible when points of access to XDN infrastructure are positioned very close to end users.
Market Forces Drive Pursuit of Service Differentiation
There’s no getting around the fact that the time is ripe for players in the online gambling market to act on these capabilities.
With deregulation unleashing a flood of casino gaming and sports betting services worldwide, the global betting handle in the online gambling market jumped from $58.9 billion in 2019 to an estimated $74.4 billion in 2021 and will reach $92.9 billion by YE 2023, according to a research report from Visual Capitalist. IMARC Group, reporting similar levels of current activity, predicts the global take will hit $131.4 billion in 2027.
Visual Capitalist says the biggest share of the take, at 40.3%, is going to sports betting. In the U.S., online sports betting has contributed $4.1 billion to bookmakers’ coffers on bets totaling $57 billion since 2018, the year the Supreme Court cleared the way for state-level legalization. With legalization finalized in 23 states and expanding rapidly, Goldman Sachs expects the online sports betting handle will increase at a 40% annual rate over the next decade.
But intensifying competition for a piece of the action in all the online gambling categories supported by thousands of outlets around the world spells mounting challenges ahead. Amy Howe, CEO at FanDuel, a leading online sports betting site, recently told the Financial Times that with “too many competitors” driven to unsustainable levels of marketing spend, a shakeout is likely.
Barron’s, in a recent report titled “Why Online Sports Gambling Companies May Never Earn Much Money,” cited concerns over the absence of profitability among leading players. Echoing Howe, the article said millions of dollars spent by top players on advertising is a leading cause for some analysts’ assertions that current market valuations may not be justified.
Clearly, operators need to find a more cost-effective way to attract bettors.
Gambling industry expert Steve Ruddock, lead analyst for BettingUSA.com, made the point in a recent commentary predicting 2022 trendlines. Noting that “the sheer number of companies trying to be major players means many will fail,” Ruddock said, “There is a need to offer something your competitors don’t possess – and hopefully, something they can’t imitate,” which will drive “a new wave of innovation.”
Indeed, market leaders and newcomers alike are already focused on finding new ways to draw more users to their services. For example, DraftKings, a leader in sports betting, recently introduced socialization features it characterized as “industry-first” innovations. Other providers, including market leaders like 888 Holdings, GVC Holdings, and DraftKings, have teamed up with software developers in virtual reality (VR) technology to bring VR casinos to market. And there’s growing recognition across the ecosystem that micro-betting, which allows sports and esports bettors to place wagers on imminent outcomes, will drive user engagement to new heights.
But when such initiatives lack the support of real-time interactive streaming infrastructure, they fall short of what can be done to achieve their full potential. As noted by Keith Wachtel, chief business officer for the National Hockey League, micro-betting is a major case in point.
Wachtel, referring to absence of real-time streaming for micro-betting in an interview with Sports Business Journal, commented, “Of all the things betting operators are really clamoring for, it’s that experience, because it allows people to engage in the game while they’re betting….Obviously you don’t want to cannibalize the broadcast and digital streaming business. But if you can include that as one of your offers, I think it’s a tremendous opportunity.”
Done Right, Micro-Betting Could Be a Big Winner
There’s widespread agreement that micro-betting is the wave of the future in online sports and esports bookmaking. In 2021 JPMorgan issued an advisory telling clients that micro-betting will be a major driver behind projected increases in sport betting handles.
But there are significant drawbacks to micro-betting strategies that can’t exploit the real-time streaming benefits cited by Wachtel. One has to do with the need to rely on users’ access to TV broadcasts of live content rather than enabling a holistic connected experience where, as Wachtel put it, they can “engage in the game while they’re betting.”
Moreover, while broadcast provides a way for everyone to see the action more or less at the same time, which is essential to maintaining an even playing field against uniform odds, there’s still a variable multi-second lag time between action on the field and TV reception. That gives an untenable advantage to any bettor who is talking to someone viewing the action at the venue.
Any bookmaker who can employ real-time streaming as enabled by the Red5 Pro XDN platform can combine viewing and betting into an experience all participants can share simultaneously in sync with what’s happening on the field. Among the growing number of entities utilizing XDN infrastructure with live micro-betting services are customers of Skreens, which, as noted in a previous blog, employs XDN architecture with its platform-as-a-service (PaaS) technology in multiple production scenarios that rely on real-time streaming.
The Skreens platform is ideally suited for online sports service providers who are bringing micro-betting into play to attract viewers. According to Skreens CEO Marc Todd, these operators are recognizing that “if you can make it possible for people to bet ten cents on whether a three-point shot will score in the next minute, you have an opportunity to draw and retain the casual sports fan.”
The Case for Video-Rich Socialization with Online Gambling
Another major enhancement to user experience in micro-betting and any other online betting-related scenario enabled by real-time streaming is video-based socialization. Initiatives aimed at making social interactions a big draw to betting platforms are commonplace across the market.
So far, though, as chronicled by the Legal Sports Report, these efforts have produced mixed results. Discussing prospects for some of the latest strategies, Legal Sports says, “Sportsbooks around the world have tried social features before, albeit with relatively little traction.”
The problem is that simple chat-based platforms provide little inducement for users to leave the social media groups they’re already in. “Operators always have struggled to make the social experience as slick as existing social media platforms,” the publication notes. “Why would gamblers switch from their Twitter accounts to a [DraftKings] social experience?”
Most likely they would readily switch to in-app socializing on a betting platform if they could see each other in real time, especially if the video communications experience avoids the low-resolution quality and limited scalability intrinsic to the video conferencing platforms commonly used as adjuncts to conventional one-way HTTP streaming. When the entire user experience is running on an XDN infrastructure, the socialization aspects are tightly woven in real-time with the live-action viewing and betting.
The Compelling Potential of Socially Interactive VR Casinos
Enabling live interactions with dealers and other gamblers is an especially vital aspect to user experience in the rapidly expanding VR casino segment of the marketplace. By taking advantage of new levels of realism in VR animation, providers of conventional online casino services can move customers beyond flat displays of slot machines and table games to something much closer to the brick-and-mortar real thing.
Bookmakers are pursuing the opportunity as the size of the VR user base rapidly moves toward mainstream dimensions. According to eMarketer, the number of U.S. consumers accessing VR at least once monthly reached 58.9 million in 2021, 18 million more than the researcher estimated for 2019. By YE 2023, eMarketer predicts the total number of monthly U.S. VR users will reach 65.9 million. Globally the VR market, valued at $15.81 billion in 2020, will grow at 18% CAGR to reach $59.43 billion in 2028, according Grandview Research
Now researchers are anticipating VR spending will start flowing at an accelerating rate into the online casino market. In a recent study on the prospects, Technavio predicted the VR gambling handle would grow by $1.74 billion, equal to a 53.13% CAGR, between 2021 and 2025. Similarly, Statista projected the market would increase by $1 billion over a three-year timeframe, going from $1.4 billion in 2021 to $2.4 billion in 2024.
Real-time interactive streaming is an especially vital component in live multi-participant VR use cases, which require incessant transmission of volumetric payloads in multiple directions. To ensure a simultaneously shared experience, those payloads must keep pace with every action impacting what’s happening in the virtual space, delivering each participant’s unique view of the unfolding scene in tandem with every movement.
Overcoming the Limitations of 5G in Real-Time Use Cases
Commentary in the gambling industry often suggests bookmakers will be able to implement real-time networking for VR at mass scales when 5G becomes more widely available. But, in reality, the latency-reducing capabilities of 5G primarily apply to multi-second reductions in radio access network (RAN) processing at mobile control centers. 5G doesn’t impact the latencies incurred when signals go through multiple internet hops to reach on-ramps to the cloud and repeat the process streaming from off-ramps to end users; nor does the technology do anything to mitigate the multi-second latencies imposed by traditional streaming over content delivery networks (CDNs).
Efforts to create direct entry from local 5G radio sites to the cloud infrastructures operated by AWS, Microsoft Azure, Google Cloud, and others are underway worldwide. Such interconnections at the mobile edge could eventually have a significant market impact, depending on how the dealmaking goes between mobile carriers and the cloud providers.
But there will still be a need to overcome the traditional streaming latencies if bookmakers counting on 5G access to their services are to meet the real-time streaming requirements intrinsic to socialized VR casino experiences and the other service-enhancement strategies discussed here.
That’s why AWS has certified Red5 Pro as the first provider of real-time streaming infrastructure that can be integrated with the local extensions of cloud service that AWS calls Wavelength Zones. These are the points of cloud connection for the on/off-ramps that AWS is positioning in 5G facilities operated by Verizon, Vodafone, Bell Canada, Japan’s KDDI, SK Telecom in South Korea, and others.
With direct connectivity into XDN streaming infrastructure from Wavelength Zones and other cloud providers’ mobile edge on-ramps, online bookmakers will be able to deliver a new generation of services to 5G users at sub-50ms latencies. More broadly, as explained in this blog, additional partnerships Red5 Pro is forging with providers of hardware acceleration and other entities will make deep-edge connectivity for sub-50ms service applications available through all types of access networks.
The Multi-Cloud Flexibility of XDN Architecture
Meanwhile, online bookmakers can move immediately to capitalize on use cases that depend on real-time streaming at sub-400ms latencies. Whether bettors are accessing online gambling services via mobile or fixed networks, the multi-cloud XDN platform makes it possible to begin delivering user experiences that could well be the keys to success amid intensifying competition.
XDN infrastructure is built on automatically orchestrated hierarchies of Origin, Relay, and Edge Nodes operating in one or more public or private cloud clusters. Service providers can maintain persistent, fail-safe performance in real time at any distance across multiple public cloud infrastructures by leveraging pre-integrations of the XDN platform with AWS, Google Cloud, Microsoft Azure, and DigitalOcean, and through integrations with other cloud providers enabled by Red5 Pro’s use of the Terraform multi-cloud toolset.
And they can also bring private clouds into play with multi-cloud instantiations. In a global online gambling environment peppered with variations in degrees of regulatory freedom, multi-cloud flexibility is essential to seizing opportunities on a region-by-region basis. Wherever those opportunities arise, bookmakers can bring in a regional public cloud or their own private clouds to serve a targeted area.
Along with supporting the latency, multidirectional, and unlimited scalability parameters underlying next-generation online gambling service enhancements, the XDN platform also facilitates automated activation of the security and cross-device compatibility online bookmakers require. A full explanation of these and the many other capabilities enabled by XDN architecture can be found in this white paper.
The new realm of online gambling experiences outlined here will inevitably take hold as ever more providers discover what can be done over infrastructure supported by the XDN platform. Online bookmakers who want to act sooner than later on these opportunities can contact us at firstname.lastname@example.org or schedule a call.