Online sports gambling is a booming business. But as upstarts break into the market to try and steal market share from more established players, it’s not the platform or user interface that’s going to determine who is the winner in this multi-billion dollar market. It’s the customer experience. Can AI help sports betting companies take home the biggest payout – loyalty?

The rise of a burgeoning industry

The online and mobile sports betting industry is having a moment, with interest propelled globally by the Pandemic, increased digitalization and more secure digital payments¹. It’s an industry expected to reach $127.3 billion globally by 2027.

A lot of this growth is coming from the U.S., following the legalization across many states after the 2018 Supreme Court Decision. In the country, sports betting is projected to become a $40 billion industry in the next decade² – up from today’s $19 billion a year³. Already, close to 50% of adults in the US made a sports bet at least once in their life, and this is only expected to rise⁴.

Especially during blockbuster moments which open the door for sportsbooks to turn short-term and game-specific betting into long-term engagement. During the 2021 Super Bowl, 23.2 million Americans bet $4.3 billion on the game⁵. Is 23.2 million people a lot? If every person in New York City, LA, Chicago, Houston, Philadelphia bet on the game, we would be still short by 4.5million. For March Madness, 47 Million Americans were expected to wager. But the opportunity is not always seized⁶.

The industry’s gut-wrenching fumble during the biggest sporting event of the year.

It’s Super Bowl Sunday. One of the biggest – if not the biggest – sporting events of the year in the US. After becoming legalized in more than two dozen states⁷, it’s a massive opportunity for sports betting. Millions have been funneled into paid media to entice fans to wager. For sportsbooks, Super Bowl Sunday is the opportunity to capture the imagination of new fans and reap the benefits of an engaged and hyped-up audience. The increase in demand during the Super Bowl was dramatic: online sports betting volumes in the US jumped 254% year-over-year⁸. On game day, FanDuel was the third most downloaded app in the App Store, beat only by TikTok and Robinhood.

All eyes are on these sportsbooks. And the platforms crash. Not just one, but many of the most popular sports betting platforms – including Barstool Sports, BetMGM, DraftKings, FanDuel, and BetRivers – suffered crippling technical issues that prevented people from placing or settling bets⁹. Some more severe than others.

The companies blamed “unprecedented demand.” In a statement, DraftKings said: “We’re aware customers were unable to access our mobile and online Sportsbook. It appears this outage was caused by a surge in traffic that caused problems for our backend provider.” While FanDuel said: “Due to unprecedented demand during the game, FanDuel customers in Michigan and Illinois did experience intermittent outages while other markets saw latency in accessing our Sportsbook mobile app.

While companies were responsive, the backlash from fans was fierce.

“How is it that I’m seeing fanduel commercials on my television almost rubbing it in that I can’t even place a bet on your app that crashes any time there’s a reasonably large sporting event,” one person wrote.

And the impact would be felt long after the fourth-quarter clock ran out. According to Susquehanna analyst Joseph Stauff: “While outages happen, it happened at literally the worst possible time and that is a VERY important miss….The importance of the outage is whether it sours customers in Michigan [since it was just legalized], in particular, that have not yet locked into a preferred app as that takes a few months¹⁰.”

He continued: “The risk is that the massive frustration created by not being able to get a bet in on the Super Bowl for 45 minutes prior to the game and during the first quarter is enough for them to move to try competing apps¹⁰.”

During the biggest moment of the year, instead of capturing long-term loyalty, many major betting sites sent customers switching teams and running towards the competition.

Learn more about companies using chatbots for customer service.

The top challenges in the sports betting industry

As with any industry experiencing hyper-growth, there are numerous challenges that established and new entrants face. Here are the top challenges in the sports betting industry today:

Spikes in demand: Like in the case of the Super Bowl, sometimes platforms and systems are not prepared to handle a surge in demand, and systems break. Even with planning. If there is unprecedented interest in a short amount of time, back-end systems can become overwhelmed.
Legalization inconsistency: Sports betting is not legal everywhere. While more and more countries take the steps to legalize it, there are still inconsistencies by country and even within countries. In the United States, for instance, not every state has legalized sports betting which creates challenges, including stringent geolocation and KYC/AML requirements¹¹.
Fraud and security: Betters have payment information stored within these platforms. Like crypto companies, sports betting companies need to have the most secure systems in place as they are vulnerable to hacks.
Increased competition: More and more companies are getting into the game. From innovative startups to established casinos and entertainment companies, there is a huge fight for consumer attention and wallets.

The industry’s biggest rival: Competition and churn

While DraftKings and FanDuel comprise roughly 80% of the U.S. market, floods of competitors are getting in on the action in an industry that will likely outgrow sales of alcohol and all legal cannabis¹².

There are close to 31K businesses in the sports betting market globally¹³. Legacy casinos have entered the ring – Caesars Entertainment and MGM Resorts have their own retail sports betting books. Up and comers like Vigtory¹⁴ (which was acquired by FuboTV¹⁵) are charging less in a bid to woo high rollers. Traditional media companies like Fox, Barstool Sports, ESPN, CBS Sports and the Score are trying their hand¹⁶. Even Jay-Z is rumored to be breaking into the lucrative space^17.

“From a crowded field of competitors, only a handful will likely survive long term,” according to The Wall Street Journal².

The bad news for companies in the space is that it’s becoming harder to stand out. “Brands are fighting this long hard battle for market share, rising customer acquisition costs and getting high churn rates,” says Dave Edwards, exec VP of global business development at R3 Worldwide. “It’s hard for these sportsbook companies to differentiate themselves. Legally they’re really all the same, all regulated by the state and licensed¹².”

In a bid to capture brand loyalty, it’s not uncommon for these companies to give out daily prizes and cash for free. No season-long commitments or money down. Billions are spent on promotions. DraftKings is estimated to spend $93 million on paid media alone¹².

The companies without these deep pockets, though, need other ways to compete. Could the biggest differentiator be customer experience?

The game plan: Competing on customer experience

As in other industries where people’s money is on the line (like cryptocurrency, for instance), people expect immediate support if an issue arises. Considering that 81% of bets on live sporting events are done online^18, solid in-platform (online chat or in-app chat) support is crucial. Online sports gambling is a 24/7 business and customer support needs to be, too. Being available to people when they need you helps create intimate, emotional connections that can increase revenue, drive engagement, create fan advocates and increase betting frequency.

Artificial intelligence (AI)-powered chatbots can help sportsbooks and betting sites provide immediate resolutions to repetitive queries so human agents can focus on more complex issues or provide top-notch white-glove support to big spenders. So even if there are unpredictable times of sportsbook outages like last year’s Super Bowl, customers with everyday questions can get the answers they need.

Here are the top sports betting AI customer support use cases:

Assisting during onboarding: There are troves of people trying out betting apps for the first time. AI Chatbots can help navigate through sometimes unintuitive onboarding processes and decrease immediate, first-session churn (25% of users abandon an app just after one use¹⁹).
Verifying accounts and providing log-in assistance: AI Chatbots can answer common questions related to account management, troubleshoot validation process glitches and get people engaged with betting content faster.
Providing frictionless money exchanges: When bets are placed and deposits and withdrawals are requested, people expect immediate attention; their money’s on the line. At this pivotal time, if there are any issues or friction, people are likely to become disenchanted with a service. An AI chatbot can walk a person through the steps and answer questions throughout the process instantly.
Cross-selling: Based on historical behavior, sportsbooks and betting sites can understand which customers would likely be interested in betting on new events or joining contests. AI chatbots can automate messages to customers the back-end algorithms predict would be interested.
Promoting responsible gaming: AI chatbots can preemptively intervene when a person is getting close to their self-set betting limits. It can offer education and tips on how to bet responsibly and flag potential addictive behavior.
Troubleshooting common bugs and technical issues: While human agents will likely be needed in real-time during technical issues during times of high traffic, after a glitch has been resolved, AI chatbots can be trained to alert people of the issue and how to settle bets. AI can also act as the first line of defense to gather information from people affected who report losses to speed the time to resolution.

The time is now to prioritize sports betting CX

“Eventually, things will shake out and there will be clear winners in the space, but right now it’s a pure land grab and eyeball grab,” says Derek Van Nostran, chief marketing officer of VSiN, the 24/7 sports betting cable network¹². As there are regulatory constraints with differentiation between the products and services themselves, bookmakers need to prioritize their customer experience to stand out and capture long-term loyalty.

Game Day: How AI Can Help Sports Betting Companies Win The Customer Loyalty Championship

The rise of a burgeoning industry

The industry’s gut-wrenching fumble during the biggest sporting event of the year.

The top challenges in the sports betting industry

The industry’s biggest rival: Competition and churn

The game plan: Competing on customer experience

Here are the top sports betting AI customer support use cases:

The time is now to prioritize sports betting CX

Can we help you determine the benefit your retail sportsbook can reap from adopting AI? Request a demo today.

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