Taking a closer look at the key factors shaping the sports betting world going into 2024 with the help of PESTLE analysis.
Although questions of legality and social impacts have dogged the sports betting world in recent years, it has persisted and grown rapidly in the internet era and hit $240 billion in 2022.
From the traditional model of individuals taking cash bets, it has evolved into a complex ecosystem featuring a variety of interconnected businesses, including bookmaker platforms, odds checkers, betting news outlets, and services that analyze bookmakers and their operations, such as https://match.center/. In this PESTLE analysis, we will take a closer look at the key factors: political, economic, social, technological, legal, and environmental, that are shaping the sports betting world going into 2024.
Political
The relationship between sports betting and politics has often been an uneasy one, which reflects the conflicting views on the ethics of sports betting that exist in most cultures. This can have an impact even in countries with a longstanding betting industry, such as the UK.
For example, the current UK Conservative government has developed a proposal for a Gambling Act that will impose significant costs and restrictions on sports betting companies, despite the fact that the Conservative Party has traditionally taken a pro-business, anti-regulation stance. In 2019, it also introduced drastic changes to the maximum stakes at betting terminals in high street betting shops, which led to thousands of these machines being scrapped and hundreds of shops closed.
These developments underlined how the sports betting sector often finds itself with few political allies in the face of strong public opinion, and this continues to be a weakness in democratic nations.
Economic
Sports betting remains a remarkably resilient sector, and is able to survive recessions, economic downturns and even global pandemics in which sports events are cancelled worldwide. During the COVID-19 pandemic of 2020 and 2021, for example, global sports betting industry revenue shrank from its peak of $111 billion in 2019, but had almost fully recovered by 2022.
Sports betting in regulated markets contributes to both local and national tax revenues, a factor that is often cited by proponents of sports betting legalization. The main economic threats to the sector relate largely to negative publicity from high-profile AML failings and unjustified corporate remuneration.
Social
Concerns about the social effects of sports betting have increased in the internet era, due to a perception that online betting, and the associated promotion of betting on social media offers easier and wider access and carries an increased risk of gambling harm and addiction.
Statistics, where available, appear to show that rates of gambling harm have not increased significantly, but this does not always align with public perception, and this public concern, combined with ever more sophisticated understanding of the nature of gambling addiction, can lead to political action taken against the sector. Taking voluntary steps to better protect bettors, and to invest in gambling addiction treatment is an affordable option for prudent betting operators.
Technological
Data analysis is an increasingly important aspect of the sports betting business model. It enables companies to operate more efficiently by reducing labor costs around setting prices for the thousands of betting markets set up every day.
In fact, it could be said that technology is driving the industry towards a model of attracting new customers as the main business driver, and away from the traditional core of the bookmaker’s operation, the skilful compiling of betting odds.
AI, along with data analysis, also gives betting companies more power to identify suspicious betting patterns and those customers who may be exhibiting signs of a gambling problem, both factors that are of concern to the government, health bodies, law enforcement, and the public.
Legal
Regulated sports betting companies in markets such as the UK are required to adhere to a wide range of regulations, with particular emphasis on data protection, KYC and AML issues.
There is a clear link between individual high-profile failings in these areas and subsequent tightening of laws and regulations across the whole sector. At the same time, betting companies consistently argue that regulated betting is preferable to outright prohibition in territories where sports betting legalization is being debated.
Environmental
The move from retail sports betting premises to online betting has continued to reduce the obvious and immediate environmental impact of the industry over the last twenty years. At the same time, betting companies, as with all large internet operators, are likely to face increasing scrutiny over the environmental impact of servers, data centres and business travel as the global focus on tackling climate change becomes ever more urgent.
