NBA Introducing Virtual Sports Betting Product, But Opportunity Remains in Real Sports Betting

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The NBA (in collaboration with the NBPA and Highlight Games Limited) will introduce a virtual sports betting game dubbed ‘Last 90’ during the 2019-2020 season. The game uses a compilation of real-game highlights (with real-game play-by-play audio) stitched together to play out a fictional 90-second situation. Bettors can wager on propositions ranging from the game’s outcome to the next possession, but with the “footage [coming] from any [NBA] game between the two selected teams” (and not necessarily in chronological order) there are “millions of possible overall outcomes.” No different than a slot machine, an algorithm determines the results. While virtual gaming is popular in the U.K. (nearly $100 million was wagered on virtual games between April ’18 and May ‘19), the concept is novel to the U.S. fan; National Thoroughbred Racing Association aside, the NBA will become the first U.S. pro sports league/organization to enter the space.

Howie Long-Short: To clarify, there’s a difference between true virtual sports betting and ‘Last 90’. Dustin Gouker (editor, LegalSportsReport.com) explained that “virtual sports exist as computer simulations with the software selecting the teams and stats, running the simulation and then generating an outcome. The NBA product stitches together highlights to create a narrative and something to bet on, but it doesn’t account for real-world scenarios (think: team’s recent performance) like a simulation would.

Gouker believes that virtual sports betting has limited financial upside and that the most lucrative “opportunities [for both leagues and licensees] remain in real sports betting.” He said that a product like ‘Last 90’ would be best served “complimentary to online gambling”, which means “there’s not going to be a huge market for the game; at least in the short-term.” For it to take off – aside from states needing to permit and then gain critical mass with online sports betting (which of course is a big hurdle) – the NBA and/or an operator will have to investment in educating fans about the product. Most U.S. sports bettors have never seen a game like this before. Remember, as it currently stands, just one online casino in New Jersey (Resorts Casino) and the Pennsylvania lottery sponsor virtual sports betting games – and neither carries a product associated with a big four sport; which explains why the response has been tepid to date.

It’s worth wondering why the league would embrace a game where the outcome is fixed, when it also intends to play in the real legal sports betting space where integrity is a core tenet. Much like a traditional sports bet, ‘Last 90’ seeks to draw equal action on both sides of the game; they profit by retaining the vig. Gouker pointed out that the decision to “create a product where the winner is pre-determined seems odd, if only because it lends itself to future conspiracy theories” (think: the league fixes the outcome of Last 90, they must be fixing the outcome of these games too).

Highlight Games Limited is a subsidiary of the Swedish gaming company Cherry AB. The company was delisted from the NASDAQ exchange in May.

Fan Marino: Those who grew up in the late 80s and early 90s may remember VCR Quarterback, a board game that integrated NFL highlights on video tape. While it’s not a perfect comparison for ‘Last 90’ – VCR Quarterback was a children’s game, not one that fans bet on – the ideas are similar. But just because those of us in their late 30s (or early 40s) remember the game fondly, doesn’t mean ‘Last 90’ is bound for success. Remember, the NBA’s version of virtual sports betting is virtually a coin-flip – there’s an illusion of strategy, but no base of knowledge is going to enhance your odds. Sports bettors bet games that give them a mathematical edge over the long-term.

By nature, sports gambling is limited to when games are taking place, so in theory virtual sports betting is designed to give fans something to wager on when the schedule is dark. Its appeal is that unlike a game which takes 2.5 hours to watch, the time commitment is minimal and the results are almost instantaneous.

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Author: John Wall Street

At the intersection of sports & finance.

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