Highlight Games Business Update, May 2020

From Co-CEOs, Nick Gardiner and Steven Holmes

Since its inception in the UK betting market in 2001/2002, virtual sports betting has evolved from being somewhat of a filler product (used to provide betting opportunities in-between live events) to a staple product in retail, online and mobile. With volumes and average stake sizes growing year on year, the success of virtual sports is largely driven by their availability 24/7, 365 – there’s no need for players to wait for the next live race or match to start.

An outbreak of foot and mouth disease in the UK in 2001 led to the cancellation of major horse racing meets like Cheltenham, which, even then, cost bookmakers at least £100m. The disease impacted other sporting events, and so the industry turned to virtual sports to fill the gap created by a lack of live fixtures. In view of this, it comes as little surprise that we are currently seeing an increase in virtual sports betting given that live sporting events are cancelled due to the COVID-19 pandemic. This increase is mostly driven by football (soccer) bets, which account for at least 80% of the virtual sports betting market (followed by Horses and Dogs). Other virtual sporting events such as Virtual boxing/MMA, cycling, motor racing and numbers games are largely insignificant in consideration of the market as a whole and are cannibalistic on other operator revenues. For these reasons, Highlight Games has invested in exclusive rights to create content using football league footage such as its English, Italian, Greek and Turkish SOCCERBET games.

Given the current lack of live sporting events, it is no wonder that Highlight Games has seen a growth in online revenues of >120% generated by its operators since the outbreak of the virus.  This can largely be attributed to Highlight Games’ unique and exclusive content which, instead of using graphical representations of sports, uses the real (archive) footage of the real teams from official leagues. In England, for example, Liverpool, Manchester Utd, Chelsea, Arsenal, Tottenham and Manchester City are used alongside all of the other teams represented in the Premier League. In Italy, where Highlight dominates as the No.1 provider in the football Virtuals market, teams including Juventus, Inter, Roma and Napoli are seen alongside all other teams in Serie A, which create the league. The same is evident in Highlight’s Greek and Turkish SOCCERBET games with the likes of Olympiakos, Panathinaikos, PAOK,  Galatasaray, Fenerbahçe and Beşiktaş.

Prior to the outbreak of COVID-19, Highlight saw its operators incrementally increasing virtual sports revenues dramatically through the use of its products featuring real footage, with players preferring to bet on games featuring genuine archive footage of teams rather than less realistic, graphical representations of teams. The opportunity to watch genuine archive footage of favourite teams, players, action and goals has truly resonated with operators and players, and this is true now more than ever.

Case Study: Italy

Italy is one of the largest, most competitive and tightly regulated virtual sports markets in the world. Highlight Games launched its products in Italy at the beginning of 2019, and by the end of 2020 it expects, subject to ADM processes, SOCCERBET to be live with all of its contracted customers – which account for 96% of the retail, online and mobile market in Italy.

Highlight is currently live with four of the top five operators in Italy and has increased, and – more importantly – incrementally increased, their virtual sports revenues by >16%. Highlight accounts for 60%* of these operators’ total virtual sports revenues. Additionally, in combination these operators generate 32%* of the total virtual sports spend in Italy. It is important to note that this performance is from the Serie A-based SOCCERBET product alone.

Highlight Games will be launching with the rest of the Italian market, including the market-leading operator, within the next 2-4 months, which will more than double the 4,500 retail venues in which Highlight Games’ SOCCERBET product is currently available. In other developments, Highlight is launching new SOCCERBET products featuring football leagues including the Italian Serie B and Turkish Super Liga and ground-breaking new content including the official NBA basketball game, NBA Last 60. Additionally, Highlight will be rolling out a new and innovative push notification marketing service which will allow operators to push video clips of goals and action from Highlight’s games with calls to action and marketing messages. Imagine during the league season (or at any time) when Arsenal play Chelsea or Liverpool play United being able to target communications around games to True Fans of those teams, something which a graphical virtual sport cannot and will never be able to match.

Highlight’s success is largely down to its possession of exclusive rights to Serie A footage from the past 10 seasons (to 2010). Highlight’s SOCCERBET games give players a real emotional transfer as they see their favourite stars and teams combined with actual goals from past games.  Highlight updates its content each year with new footage from the then completed season, such that newly transferred players can feature in the games. Highlight Games also keeps the matches as close to reality from a betting perspective by creating the odds and results as close to real-life odds and results as possible.

While others try to make their graphical CGI players and action as real as possible, Highlight Games IS real.  There can be only one!!

*numbers generated by AAMS