Ei g2014 white paper re wc14 (version 1.01)
- 1. 6yy Title FIFA World Cup 2014 Initial results, trends and observations. Prepared for EiG 2014, Berlin, October 2014 Prepared by Lee Richardson MBA chief executive Gaming Economics research, insight, advice, action www.gamingeconomics.com lee@gamingeconomics.com Date July 15th 2014 Version 1.01 © Gaming Economics, 2014
- 2. FIFA World Cup 2014, context… This White Paper, prepared for EiG 2014, concentrates on analyzing the key betting-related results and observations for the FIFA World Cup 2014, which took place in Brazil between June 12th and July 13th 2014 32 team format, 8 Groups of 4, with 64 scheduled games, played at 12 locations across 3 time-zones and with 4 primary game start-times (17.00, 20.00, 21.00 and 23.00hrs BST). On the eve of the tournament, hosts Brazil were the general 3/1 favourites, followed by Argentina at 4/1, Germany at 6/1 and defending champions Spain on 13/2. Initial findings, results, trends and observations… The previous event, held in South Africa in 2010, was the first global football event dominated by in-running betting (IRB), with an estimated 55% - 60% share of all bets struck on the event During the subsequent 2012 UEFA Euro Championships, this share had risen to an estimated 65% - 70% Accordingly, some analysts, ahead of this tournament, predicted a share of 70%+ for the 2014 event in Brazil However, others, including Gaming Economics, highlighted the potential “anti-social” nature of the scheduled start times for UK and European audiences, and the possible dampening effect this might have in IRB activity, turnover and margin Fig 1. below shows the per-game 1X2 share of IRB, showing a broad range of 32% - 80% and an overall estimated average of 58% across the 64 game tournament, making it broadly on a par with the 2010 event Fig 2., which follows, also clearly highlights the relative performance of total per-game betting revenue as determined by kick-off time, with as much as 25% more revenue being wagered on games at the most popular starting slot (20.00hrs BST, Index 100) when compared with the least popular (17.00hrs BST). © Gaming Economics, 2014
- 3. Fig 1. FIFA World Cup 2014, per-game 1X2 IRB share and trend Fig 2. FIFA World Cup 2014, total per-game betting revenue by start time (BST) © Gaming Economics, 2014
- 4. This marked impact on betting revenue by kick-off times is certainly supported by the early TV viewing figures, which have been down as much as 21% in the UK when compared with the 2010 Finals. Even the 2014 Final itself, played between the tournament second-and third-favourites, was watched by 5% fewer viewers than that in South Africa four years earlier In terms of overall performance of the individual matches by the favourites, in 90”, there has certainly been a degree of volatility; Fig 3. below shows the relative performance, by 16-game period, with the overall cumulative winning percentage, across the 64 game tournament, of 51% being well within the expected range. However, gross win margins for the bookmakers are expected to have been boosted by the well-below-average winning ratio of 31% during the final 16-game period, when overall per-game turnover would expected to have been highest. Fig 3. FIFA World Cup 2014, Favourites Performance, at 90”, by 16-game period © Gaming Economics, 2014
- 5. In contrast to this performance of overall winning favourites, major form-upsets have been common, throughout the tournament. Just a few examples… Four teams who were outsiders of 4 in their respective Groups successfully progressed to R16 (Algeria, Costa Rica, Greece and the USA) Four of the first 9 in the out-right betting didn’t make it beyond the Group stage (Spain, Portugal, Italy and England) Costa Rica were 4/1 favourites to be the lowest scoring team at the tournament; in their remarkable progression to the QFs, they scored 5, more than most of the teams who played in Brazil Algeria were the 14/1 outsiders to finish as Top African side, which they accomplished jointly, alongside Nigeria However, there were some far more predictable outcomes; with 3 of the 4 outright market-leaders reaching the semi-finals, this produced the ‘closest’ Final-4 finish for more than 20 years. This underscored the long-term ante-post market being extremely solid, and thus able to be traded accordingly. A record number of goals was recorded at these Finals, with a particular emphasis in the first 48 games, as Fig. 4 below clearly shows. Germany and Brazils’ 8-goal thriller clearly skewed the data for the Semi Finals…….! Fig 4. FIFA World Cup 2014, average goals per game, 90”, by tournament stage © Gaming Economics, 2014
- 6. As is typical at such tournaments, once the knock-out stage is reached, goal totals reduce, and Brazil has been no exception. Nonetheless, an unusually stark pattern has been noted, with a remarkable 65% of the first 48 games recording more than the benchmark 2.5 goals at the end of normal time, with the residual 16 games seeing just 25% reaching that level. The range of betting markets offered by bookmakers on a per-game basis continued to rise inexorably, to a level almost 3-fold from just two tournaments ago, as Fig 5. below indicates. With no sign yet that this trend will plateau, further post-tournament analysis will no doubt highlight the true relative incremental benefit of such growth in markets offered. Fig 5. FIFA World Cup, 2006–2014, number of betting markets offered per-game © Gaming Economics, 2014
- 7. Conclusions… In-running betting levels appear likely to have been stable/low-growth when contrasted with 2010… TV viewing figures appear below expectations, and well down on 2010, at least in the UK; too soon to see how that might have impacted betting turnover and margin, especially from recreational players….. Overall gross win margins likely to have improved markedly as the tournament progressed, particularly over the final week… Many derivative markets, especially those based on goals scored, have likely performed well in volume terms, driven by the record-breaking number of goals, particularly in the first two weeks…. Outright market probably mostly profitable for most operators; Germany winning rather than second-favourites Argentina likely made a significant difference on the final day, and for the overall tournament… Overall, a likely highly-satisfactory tournament in trading terms, although unlikely to match 2010 in gross win margin levels. Sources: Gaming Economics, June/July 2014, BARB, June/July 2014, Selected Company Financial Reports and Updates, July 2014 © Gaming Economics, 2014 (word count 1,034 incl. all charts/tables/footers)