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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
Fernando Noodt (00:05.887)
The UK betting exchange market is getting smaller as Matchbook takes over rival BedDAC in a deal that reshapes the competitive landscape. But with exchange revenues declining, the bigger question is whether consolidation can bring a new life to a model facing growing competition. At the same time, Matchbook is expanding into prediction markets, betting on the similarities between the two models to unlock new opportunities. So, what does this acquisition mean for the future of betting exchanges?
Could prediction markets be the catalyst for growth? Welcome to iGaming Daily, where where we will discuss that and more on today's episode, which is brought to you by Optimum, the creator of positionless marketing and number one player engagement solution for iGaming and sports bathing operators. I'm Fernando Nott, Media Manager for SVC, and your host for today, where I'm joined by two of SVC News' greatest, the SVC News finest. Ted Romclay, editor of SVC News. How are you today?
Ted Orme-Claye (01:05.676)
Yeah I'm good, thank you Fernando. Third in a row today. Unfortunately the EU hasn't announced anything today so I couldn't make it the third in a row talking about Europe. But yeah we've got a pretty good topic to talk about in that stead.
Fernando Noodt (01:20.371)
And for that we have Patrick Killing with us. Patrick, how are you today?
Patrick Killeen (01:25.042)
Yeah, I'm good. Thanks for yeah, it's with the first time in a while that I've been introduced as one of the greatest. So thanks very much for that.
Fernando Noodt (01:34.613)
Well you are the great a a great in my heart. So you will soon be in everyone else's, I'm sure. But let's begin with the facts about this news that broke this week. So what do we know about Matchbook's takeover of Bed Deck?
Patrick Killeen (01:37.918)
Thank you, Vate.
Ted Orme-Claye (01:54.255)
I can take this from the start. The details are a bit thin on the ground, of them that we know they're requiring them and we'll be merging the two platforms doing a cross integration. They haven't announced any price tag for it, which is quite interesting. we don't really have any information about the financial side of the deal.
But this is a pretty significant move. It's very interesting to see Matchbook making a move like this. As they've been quite active over the past year in reaction to the global rise of prediction markets. I think we'll obviously get into more on this podcast. It's something that Patrick and I have been covering quite a lot on SBC News.
Yeah, it's an interesting move in the betting exchange side of things, has been a bit of a... Certainly in the UK, it's been a bit of dormant part of the industry, I think. A bit of a quiet part of it that we don't see that much regular movement in.
Fernando Noodt (03:03.474)
And of course I'm I'm wondering, this is a particular market and how significant is this takeover actually for the competitive landscape in the United Kingdom and what does it tell us about the state of the exchange market?
Patrick Killeen (03:20.723)
I think the it's always been a a a slim portion of the UK gambling industry. but i it's continually maybe over the last decade or so the GGY has been declining so it was ninety two million this year. There are there as as we've just said, there are a fewer a lot fewer players and it's almost a lot less popular avenue for the general punter.
I think quite a few people who are are very well in tune with the betting landscape, the sports betting landscape, horse racing, and maybe like the lower, less talked about football games users of the exchange market and and there's obviously still an appetite for it because the liquidity's still there.
But it's I mean, you've got BetDAC and Matchbook, obviously, but then the SpreadX, the Betfair Exchange and Smart Kids are are kind of the big five players in that. There are there there are a few kind of really smaller operators within the system. But
I think it kind of suggests slightly more consolidation. I think even Matchbook, I was talking to the CEO in Lisbon, Ronan, and he was kind of suggesting that that that they're not
your traditional major player, maybe in comparison to bigger sports books, but you he was kind of very humble when talking about about the business and about how it it it's still kind of an up and coming challenger within the the the gambling industry as a whole. That you know the state of the in terms of the state of the exchange market, we're we're seeing a con a continual decrease in the UK, but I still think that that with what's happened in America with prediction markets. Now granted there is differences between
Patrick Killeen (05:11.028)
the two but I a lot of them it's well known that a lot of exchanges are keeping a very close eye on the developments of predictions and are almost trying to tap into that a little bit to to to kind of revamp their UK products so that even though we've seen this decline there is potentially some opportunity for a bit of a revival maybe.
Ted Orme-Claye (05:35.126)
Yeah, I I think just to build off of what Patrick said, I think that's definitely what Matchbook have alluded to today, isn't it? You know, as Patrick's just explained, betting exchanges have always been a niche product in the UK. mean, they kind of, think they, obviously I was just a kid back then, but they exploded onto the scene, I think in sort of the 2000s and made a bit of a splash. I remember reading something earlier this year that Betfair had a very,
had quite a public sort of marketing campaign in London where they brought out a coffin for the traditional sports book, know, and saying, is, bagging exchanges are gonna be the future. And I think they were quite popular a bit, but as Patrick's noted, they've kind of slowed down a bit. It's definitely more of a niche in comparison to the traditional sports book because there's a bit more for the...
Consumer to understand I think and you know whilst sports is very simple You've got your market Liverpool to win or something you put your bet on with the exchanges is obviously the peer-to-peer element. There's liquidity So there's just a bit more The yeah, there's just always been a bit more of a niche around it But you know like we said here that there's another niche emerging at the moment Which is the predictions market space particularly in the US which like Patrick said finding that the two on
Entirely the same obviously, but there are a great deal of similarities between the two There's there's definitely some similarities and the kind of customers who are interested in them And I think match book has taken notice of this They've already clearly they've already taken notice this because they've got involved in the prediction market space themselves themselves they became the first British company to do so in December last year and Like Patrick said, I think they're looking at this and thinking
prediction markets have shone a light back on the peer-to-peer kind of model of betting and wagering and they're expecting some further growth off the back of that.
Fernando Noodt (07:31.989)
And actually Patrick, you were talking about Bedfair, you were talking about SpreadX markets, now this joint business between Matchbook and the the the takeover of of BedDAC and you said the word consolidation so are we expecting to see further consolidation in this in this market or are there still opportunities for smaller exchanges to compete in the UK?
Patrick Killeen (08:01.212)
I think with this deal
The consolidation within markets sometimes is generally seen as therefore the market is less competitive. But I think exchanges still directly, whether it would be directly or indirect directly, compete with traditional sports books. So it doesn't like dilute competition or anything like that. It does kind of in the in the space that there is there is very few operators of the exchange. But
I don't think that it's going to kind of hinder development or interest in in the space really.
I think it could with two of the bigger two of the bigger players or two of maybe the only players within the space coming together to within this this deal, it provides maybe a little bit more legroom for expansion, for development of products to to make the exchange a little bit more appealing to the layman rather than it just be being appealing to those that have been
very knowledgeable of betting in the UK for the last however many years.
Fernando Noodt (09:35.859)
And of course, speaking of the last however many years, for more than twenty five years BecDAC has become a heritage brand really in the UK. So how difficult will it be for Matchbook to to actually integrate that business while retaining the the loyalty of of their existing customer base?
Ted Orme-Claye (10:00.846)
I'll jump into this one. I don't think it'll be that difficult at all just because of as we've established kind of the niche nature of betting exchanges in the UK and we should add in Ireland as well. BetDAC is an Irish company. They're headquartered in Dublin.
and they're active in quite a few markets as well, think. this is also, this does have some global significance for Matchbook as well. But because betting exchanges, like we've said, are a lot more niche in comparison to the traditional sportsbook product, I think as long as that, as long as the integration goes smoothly and they maintain the same sort of product standards that BetDat customers will be used to and will expect,
which as Matchbook is a company that has been around in the betting exchange space for quite a while itself, I'm sure they're capable of pulling off. I don't really expect this to be too much of a challenge for them. There's also, I guess, the added side of this is that, as we've already established again, there's not a huge amount of companies in the betting exchange space. So there's not a huge wide pool of competition that
customers would go to I think. If they were going to move to a different company they probably would have done so already, been persuaded by some offers or something. Again, it actually wouldn't surprise me if a lot of betting exchange customers, people who are really avid fans of the betting exchange model probably have accounts for multiple companies anyway. So yeah, just to cut to the chase, I don't think it would be too much of problem for them.
Fernando Noodt (11:41.875)
have hashtag wait and see whether you're right Ted or if matchbook may struggle with integrating the BedTag customer base but right now what we'll have to do is a very quick outbreak and we will be right back with more iGaming Daily. Alright.
Ted Orme-Claye (11:44.234)
Ha.
Fernando Noodt (12:04.232)
Okay, let's go.
And we're back with more Ri Gaming Daily to continue discussing Matchbook Matchbook's takeover over rival BedDack in the UK. And in the first half of this episode, Patrick mentioned the decline of gross gaming yield in the twenty five twenty six period. And in at the same time, Matchbook increased its market share. So what is holding back this sector?
right now and and do you think that consolidation can reverse that that downwards trend?
Patrick Killeen (12:41.566)
I I think that what's holding it back, I've kind of gone through this in my head, you know, to to give like the the listener a little bit of insight. You've sent these questions over before before the recording for and I've gone over and over this question trying to make sense of my explanation. Ted just said earlier that they're kind of hype around exchanges when they were first coming onto the scene. Now
what what you've got now with a s traditional sports book is offers in your face everywhere. And th it has to be like that because you know, the mobile betting was, you know, when it was first kind of getting on its feet that you had the novelty of having a bet on your phone rather than having to ring up or go into the bookies. Now now as that's grown, you have to kind of push the boat out more and more. We see so much more product launches all the time and
Exchanges do do that as well, but they have got the they've not got as much wiggle room. And when you go on an exchange, you are value hunting. You are not looking for Erlin Haaland to have a shot on target at Evans but for on a Saturday afternoon or bet ten pound, get fifty pound in f in free bets when you sign up. You know, exchanges do do promotions. W you can literally go on sites and view them there, but they're not kind of as in the same vein that
that you would expect from a traditional sports book. And as Ted said, there's a lot more you ha you kind of have to do a little bit of learning. So and people just people just operate on convenience, don't they? So the with the the amount of sports books compared to exchanges as well, you're more likely to click on a sports book. There's there's kind of a lot going against
exchanges barring the fact that they offer very good value for consumers, but as I said again, there is learning to it. So consolidation reversing that trend, I would only think that that
Patrick Killeen (14:47.002)
would be the case should there be an update from the FCA on predictions, although that's again that's another whole ball game in terms of will UK consumers be interested in prediction markets. And also the consolidation in terms of as I've mentioned before, pulling those resources together and being able to market yourself slightly better. We'd seen ADI do a white label deal with MatchBut for the World Cup. Now Match But was kind of
displayed throughout World Cup games, which is massive for them. So kind of getting their their name out there a little bit more and maybe t prompting people, younger people, because their CEO told me that their average age of their customer is in the forties. So prompting kind of a a younger audience which seem to have interest in prediction markets in America
by just marketing yourself slightly better might be the way to reverse it. I think that is that's kind of the th those are the two key ways I can see a reversal in the decline of prediction of exchanges in the UK.
Fernando Noodt (15:52.105)
And maybe by joining the two the two customer bases, do you think that might change the dynamics of of the exchange trading? Maybe with a larger pool, you may attract I don't know, higher volume betters or improved pricing in markets that that lacked liquidity before.
Ted Orme-Claye (16:14.73)
Yeah, yeah, think you're spot on there, and I think that is something that Matchbook are wanting to achieve with this. They have stated that in the press release they put out earlier, they did explicitly state they see a big benefit of this merger being that it will create a wider pool of players and therefore greater liquidity, greater volume, and yeah, and as you say, in turn, that can then attract more people by giving better pricing.
about higher returns and so on. So yeah, that's exactly what they've got in mind. And I think they're looking to create that because they are expecting an increase in interest in betting exchanges as a result of the increase in prediction markets globally. And what they see is that putting a spotlight back onto the peer to peer betting thing. mean, Patrick's already sort of alluded to this.
just prior. But you know, as we've said, betting exchanges have always had a bit more of a niche audience and that audience hasn't massively grown, I think. And part of that is, yeah, because of perhaps the marketing, perhaps because of the liquidity, due to the nature of the product being a little more complex than your typical sports book, which like Patrick said, is a lot easier to market and easier to promote.
I think Matchbook obviously now looking at this and seeing all the discourse that they're seeing in the, all over the mainstream media and so on with conversations about Caoshi, Polymarket, Novig, a bit more niche than every couple of prize picks. And I think they think this is gonna make people a bit more interested in this kind of product, peer-to-peer product, one that's got some more similarities with financial services.
and know and trading which is again something people have become a lot more interested in in recent years. I get you know we could argue maybe driven by like finance bro and tech bro sort of culture perhaps. So yeah I think like you say they want to expand the pool of liquidity because they see this as being a combination of factors as being a big opportunity for the betting exchange space at the moment. They might be taking a bit of a gamble on that.
Ted Orme-Claye (18:30.838)
you know pending regulatory discussions as Patrick has already mentioned but yeah hashtag wait and see I guess
Fernando Noodt (18:40.318)
Yeah, absolutely. And I I won before we go because we we we're running out of time here, but before we go, I wanna get something clear and is this like could prediction markets getting into the picture actually help revive interest in in betting exchanges, or do you think they are competing for that same customer base, those those finance bros and and and that people that that
Ted Orme-Claye (19:06.766)
Hmm.
Fernando Noodt (19:06.888)
looks into these niche markets. Do you think that they are the same players or do you think that the two models can coexist coexist sorry as the sector develops?
Patrick Killeen (19:17.076)
I think they can definitely coexist. I think I mentioned briefly before as to whether UK consumers would actually be interested in this. Now I I don't I think I might have raised this point whether it on the podcast or somewhere else, but I know other people have definitely raised this point. This is not like something that there's cr some sort of grand development by me, but the UK pretty much every UK punter has been having a bet in a regulated gambling market since they've been betting.
You know, we've had this this framework for decades. In America, predictions have taken off, partly due to the fact that sports betting is not legal in every state. You know, where sports betting isn't regulated, the amount of you know, w th they make a s a chunk of that revenue from those markets. Now, that has kind of carried over into markets with a regulated sports, but you've seen the way that that Flutter and DraftKings have struggled a little bit.
I and launched that maybe went into the space slightly late. But if predictions come to the UK, not only have you got for exchanges, not only have you got can prediction markets launching here i enable us to to to kind of ride the wave a little bit, you've also got will anyone actually be interested in this because you know I kind of don't know enough about you know the the the the
the actual front end of a of a predictions platform and and w how to have a bet on it because obviously we can't. But to me, from from what I've seen and the research I've done, it it doesn't offer too much more to me than a traditional sports book would, barring the you know, the the financial elements of it.
Now you'd potentially see some some crossover and as I said, they could potentially w ride the wave a little bit and maybe just the the knowledge of prediction markets and then being in mainstream media and and and kind of a younger audience being starstruck a little bit by predictions could boost exchanges because they you know, we've already seen them kind of like smart kids have redone their interface entirely to tap into predictions. They that looks like a prediction market in the UK.
Patrick Killeen (21:32.009)
You've got matchbook venturing into predictions. I mean, no, I know they're active in Ireland and in Brazil and I think by in South Africa as well, but they're also looking to go into the US. And they also touched they've been talking about predictions for over maybe over a year now. I think Ted might be able to give me a better idea on that. But there's there's there's some sort of there's something in the fact that if predictions do manage to land in Europe and further into the UK
There is an opportunity to if it sticks with customers and and you know that that that companies that prediction markets do enter the UK, they will literally throw the book at it in terms of marketing, whether these ones can kind of not be
it not be a detrimental thing to them that the marketing of those has has been so big, but be a positive on the fact that they are talking about a very s very similar product and people might discover that purely from the fact of searching terms like prediction markets, especially when you've got these platforms, you know, bit I think BetFair of predicts as well. You've got these platforms moving into it and they're kind of eyeing that up, I think, a little bit. So
The future of exchanges I think heavily depends on whether predictions enter Europe and the UK.
Fernando Noodt (22:51.742)
Ted, final thoughts in under a minute.
Ted Orme-Claye (22:52.418)
If I if yeah if I can I think I think I think Patrick's got a very good point there think I just build them up a bit that I think I do think prediction markets will eventually come to the UK I do see it as almost a bit of an inevitability but probably not quite to the same degree that they are in the US and a big thing to look at in the US is that calcium in particular and Most from what I've seen at least most of their trading volume the vast majority of it is around sports and that's probably linked to what Patrick has mentioned about the fact that
two of the biggest states, California and Texas, don't have legal regulated sports betting. In the UK, I don't think prediction markets, at least initially, would be allowed to offer sports contracts, because I think the gambling commission and the government at large would probably look at that as a form of sports betting. So when I think they do land in the UK, I think their most likely avenue is to focus a lot more heavily on the financial trading side of things like
putting, taking out an event contract on will the price of Bitcoin hit X amount by the end of the month or something like that. Maybe some limited politics trading with like how it relates to economics and so on, but obviously certainly not like the really controversial war markets that we've seen. That we've seen, you know, lot of controversy over the past year or two. And then, yeah, to sort of, to reiterate what Patrick said, I think maybe,
the public interest that that would generate would then have people looking at it and going, well, I like this model. I wonder how I can do it for sports. And then of course, they then come across the traditional betting exchange. So I think that's where kind of the crossover might come in.
Fernando Noodt (24:30.258)
We'll have to hashtag wait and see whether this prediction markets phenomenon takes over the the market in the UK or if it can't coexist with with the with trading exchange trading exchange bad and if you want to read more from the greats make sure you are subscribed to SBC News newsletter and of course all the other SBC media newsletter to keep up to date.
Ted Orme-Claye (24:55.48)
You
Fernando Noodt (25:00.008)
with the news from the global betting industry. But that has been all for today's episode of iGaming Daily. Of course, follow us on social media and subscribe on your preferred podcasting platform if you haven't yet. thank you very much, Ted Pat. Thanks very much Ania McDonald for producing this episode. I'm Fernando Not and to our listeners out there, we'll see you in the next one.