What’s the goal of risk management? For traders, the aim is to maximise long-term profitability. However, in today’s world of 24/7 content and commonly outsourced pricing, many operators and their suppliers are left using risk management primarily to restrict losses through limit setting and player profiling.
This happens because, with pricing and liabilities now managed separately, operators don’t have the control or agility needed to adjust pricing dynamically based on customer betting activity.
Considering the average European sportsbook handles hundreds of fixtures on weekdays and more than double that on weekends, manually reviewing each fixture, market, and selection for optimal pricing would be highly expensive and require resources that most businesses simply don’t have.
Yet the goal of maximising profitability remains. So, the question becomes: how can traders better align liabilities, pricing, and customer management to increase profits? With new forms of automation and machine learning, this alignment is entirely possible.
Balanced, Efficient Trading
The idea that pricing and liabilities are interconnected is not new. Before the rise of around-the-clock sportsbook content, this was standard practice. However, the sheer scale of modern sports betting has shifted the focus toward customer management.
When you can’t act on liabilities across your entire sportsbook—including betbuilder products with complex liabilities—you lose out on potential margins across fixtures and market types, leaving untapped profits.
The good news is that automation is eliminating this barrier. New technologies enable not only liability-driven odds adjustments but also predictive, liability-driven decisions correlated across related market types and outcomes.
What does this mean? By analyzing how much money is bet on each related market and factoring in your current liabilities, previous liabilities, and live probabilities, automated solutions dynamically adjust margins on each bet selection at scale, maximizing profit.
The gains across your content and market offerings will be substantial. Previously, the inability to do this forced many traders to reject bets and limit customers instead of taking them on to increase revenues.
This leaves significant revenue on the table. Good bets are rejected, and customers who have a bad experience seek higher limits elsewhere. By bridging the gap between third-party odds providers, your liabilities, and how you want to manage customers, automation delivers a more profitable sportsbook.
Upgrade Your Betting Experience
When we implemented automated risk management tools for our existing clients, we saw gross profit margins consistently increase by more than 10% for small-to-medium-sized operators.
Proactive, correlated, liability-driven risk management also improves the brand experience, boosting retention, turnover, and differentiation. With pricing and liabilities connected and automated, traders can confidently reduce bet rejections and suspensions.
This is because risk is managed efficiently, predictively, and profitably. With all betting activity factored in, operators can now allow customers to bet on any market type without restriction. Selections with high betting volume and negative liabilities will see higher margins, while less popular outcomes will feature more attractive odds, driving more turnover.
Achieving this with manual trading at scale is not feasible. Real-time updates to liabilities and prices based on each bet, match state change, and trading parameter adjustment can only succeed with automation.
More Effective Resourcing
New automation tools allow you to better utilize your customer data. Your sportsbook’s betting activity is unique and shows exactly what customers are likely to bet on, providing insights into how to maximize revenue through odds adjustments.
Additionally, automated, predictive, liability-driven pricing tools reduce manual workloads, avoiding human error, saving costs, and freeing up resources for higher-skilled functions. Automated risk management also minimizes the need for reactive and time-consuming customer management.
The rise of 24/7 sportsbook content has driven engagement and turnover over the past decade. Now, automation is stepping up to match that pace in risk management.
Sports betting is unpredictable, but new automation technologies bring greater consistency, stability, and predictability than ever before. The result? Higher profits on good days and reduced losses on tougher ones.
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