Paysafe Betting
HOUSTON--(BUSINESS WIRE)--Quickly and easily receiving payouts of winnings is the most important factor for U.S. sports bettors when selecting an online sportsbook, and prioritized by 37% of players, according to research released today by Paysafe, a leading integrated payments platform. The latest All the Ways Players Pay report also suggests that offering digital wallets and other alternative payment methods allows sportsbooks to overcome the challenge of card declines.
Based on a consumer survey commissioned by Paysafe in December 2020 in eight regulated iGaming markets – Colorado, Illinois, Indiana, Iowa, Nevada, New Jersey, Pennsylvania, and West Virginia –the research reveals the paramount importance of streamlined frictionless payments to the market’s future success. When choosing an online brand, players are prioritizing fast payouts, and considering this more important than: brand reputation (32%), promotions (28%), competitive odds (27%), and sports markets offered (11%).
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Getting payouts right also appears fundamental to customer retention, with 79% of sports bettors left with a negative impression of an online sportsbook if they wait longer than expected to receive funds after making a withdrawal.
Players’ focus on payouts comes amidst a broader online shift in the U.S. gaming space galvanized by COVID-19. Over two thirds of sports bettors (68%) agree that the pandemic has made them more comfortable with wagering online. Their experience appears very positive, with 61% planning to bet online more frequently in 2021.
Despite strong expected market growth, significant challenges remain in the sector such as customers’ credit and debit cards transactions being declined when they attempt deposits. And this number seems to be growing, with 14% of sports bettors consistently incurring card declines compared to the 10% reported in the inaugural All the Ways Players Pay report of January 2019, suggesting the issue is arguably getting worse.
Card declines inevitably impact a brand’s customer retention and, ultimately, acquisition. Close to half of players (47%) would blame the sportsbook directly for a decline, 45% would leave the brand due to persistent card declines, and 65% would not recommend the sportsbook to peers.
Players’ immediate behavior when faced with a card decline, however, indicates the value of alternative payment methods in helping a sportsbook overcome this challenge. While a card decline would drive 19% of players to leave the sportsbook, 73% would continue to attempt a transaction, with a digital wallet the preferred payment method of choice (35%). One out of ten (8%) would use eCash.
The broader value to operators of alternative payments, and digital wallets especially, is indicated by analyzing high-volume bettors (those who bet more than 7 times a week). While a credit or debit card is the preferred payment method of all players (29%), when focusing exclusively on high-volume bettors, this shifts to digital wallets (favored by 35%).
The ability of digital wallets to move funds quickly and easily between multiple sportsbook accounts appears to be the rationale for this preference, with 84% of such players considering this important when wagering.
eCash is the other major alternative payment method helping operators to meet player needs. Confidence in the security of online transactions is improving, with 64% of sports bettors saying they are more confident in making a deposit than they were a year ago, though concerns remain. And operators may be able to reassure such concerns with a payment offering that includes an eCash solution, which negates the need to share bank account or card details online, with 54% considering this the most secure payment method.
Philip McHugh, Paysafe’s CEO, commented: “Since the 2018 U.S. Supreme Court repeal of the federal ban on sports betting, the market has shown incredible growth, most recently in the online and mobile space during the COVID-19 pandemic. Against the backdrop of additional states regulating iGaming, our research indicates that the online market will continue to expand in 2021 and beyond – and payments will play a critical role in helping operators drive that growth.
He added: “Payments is a fundamental consideration when players choose and stay with a sportsbook, so it’s vital that operators and the wider market streamline how players deposit, wager, and receive winnings as a result. Card declines remain a significant issue, and as industry stakeholders work to address this, operators can leverage digital wallets and eCash to provide players with alternatives that complete their payment offerings.”
Visit Paysafe’s iGaming page for more information on how the company serves the industry.
About Paysafe
Paysafe Group (Paysafe) is a leading integrated payments platform. Its core purpose is to enable businesses and consumers to connect and transact seamlessly through industry-leading capabilities in payment processing, digital wallet, and online cash solutions. With over 20 years of online payment experience, an annualized transactional volume of over US $98 billion in 2019, and approximately 3,000 employees located in 12+ global locations, Paysafe connects businesses and consumers across 70 payment types in over 40 currencies around the world. Delivered through an integrated platform, Paysafe solutions are geared toward mobile-initiated transactions, real-time analytics and the convergence between brick-and-mortar and online payments.
Further information is available at www.paysafe.com.
About Paysafe’s 2021 All the Way Players Pay: The game plan for growth research report
The survey to develop the All the Way Players Pay: The game plan for growth report was conducted among 2,022 consumers who have been involved in or have a serious interest in sports betting across eight states (Nevada, New Jersey, Pennsylvania, Colorado, West Virginia, Indiana, Iowa, Illinois) in the U.S. The interviews were conducted online by Sapio Research in December 2020 using an email invitation and an online survey.
The report can be downloaded here: https://www.paysafe.com/en/all-the-ways-players-pay-the-game-plan-for-growth/
Editor’s note: The following is a guest article submitted by payments processor Paysafe. It has been edited for style and the content does not necessarily represent the views of Legal Sports Report.
For sports betting firms operating in crowded markets, finding an edge over the competition is critical. Particularly in mature markets such as the U.K., product differentiation is typically marginal. Similarities in user experience can outweigh differences, and the scope and breadth of sports markets offered are fairly similar from operator to operator.
This is not to say that there is not product and user experience (UX) innovation across the industry – as there undoubtedly is. However, with such a homogeneous offering to work with, acquisition and retention can default to a race to the bottom.
As we see in the U.S., operators are fiercely competing on sign-up offers, ongoing promotions, odds boosts, and competitive vigorish. This tactic has proven to be effective in the U.S. thus far, but it is also expensive as cost per acquisition continues to spiral.
Winning players in the US
Paysafe Betting Sites
With the U.S. online sports betting market scaling at pace – both in states where regulation has already been passed and in states on the cusp of passing legislation – there will be millions of new customers for sportsbooks to win. And sportsbooks are already investing heavily in the battle to win these new players.
DraftKings and FanDuel alone reportedly spent over $154 million in media advertising (excluding social media spend) between January and September 2020, according to data from market researcher Kantar.
More expensive promotional offers and lower odds seem like the unavoidable and foreseeable conclusion to acquiring new players as the U.S. market becomes more saturated. Make no mistake: a combination of pent-up demand for sports wagering and a growing addressable market can support this strategy in the near term.
But what about the long term? This is the high-risk game at play – spend significantly upfront and bet on long-term player monetization. To maximize the economics of this strategy, operators must consider more ways to differentiate.
A change of approach
Paysafe Sports Betting
Ever-increasing costs for player acquisition is neither a healthy state for operators nor the industry as a whole, so if sportsbooks can differentiate themselves another way, then they should.
To find out whether there are other tactics operators could employ to differentiate themselves favorably with players, we commissioned a survey of 2,000 players in December 2020 across eight states with a regulated online sports betting market.
When we asked U.S. players to give us their top three criteria when evaluating different sportsbooks that they do not currently have an account with, over a quarter of players (28%) named good promotional offers as a differentiator that is important to them. A similar percentage (27%) said good odds were in their top three criteria when assessing one sportsbook over another. So, there is clearly some value in both, as would be expected.
But surprisingly, promotions and attractive odds were not the biggest differentiating factors for players. Instead “being able to trust the brand” (32%) and “quick and easy payouts” (37%) were both selected by a higher percentage of sports bettors as being the most important factors when choosing a sportsbook.
How payments factor into acquisition
And the same pattern is true when we asked players with multiple online sports betting accounts open how they choose which account to bet with at any given moment.
Both the odds (36%) of the specific wager they want to make, and the inclusion of a promotional offer (44%) are important to much fewer players than how quickly they can receive their potential winnings (51%.)
Moreover, three-quarters of players, when directly asked, say that being able to receive payouts quickly is the most important factor when deciding whether to open an account with an online sportsbook or not.
Looking ahead
As the U.S. online sports betting industry grows and goes from strength to strength in 2021, and new markets open, solving the issue of standing out from the competition is going to be critical for operators. Treating account deposits and withdrawals as a point of differentiation, rather than just a necessary function, will be key.
Specifically, this means increasing speed of payouts to bank accounts, as two thirds of players (66%) expect to receive their funds within 24 hours.
Does Sky Bet Accept Paysafe
A second strategy is to offer more payment methods for players to deposit and withdraw. Three quarters (75%) of players would change their payment method if it meant faster payout and over half (52%) would even pay a premium, so it is easy to understand why payment methods that offer immediate payouts such a digital wallet will be critical to sportsbooks’ success.