The legalization of sports betting is gaining momentum around the country. Although legislation hasn’t yet passed in Minnesota, a key player in sports gambling operations is already running the show here from behind the scenes.
St. Gallen, Switzerland-based Sportradar, which has its U.S. headquarters in Minneapolis, is a sports technology company at the convergence of broadcasting and sports betting. Last week, the Business Journal toured the company’s downtown Minneapolis office to see firsthand how raw data from sporting events around the world is relayed back to broadcasters and bookmakers.
Just as high-frequency traders on Wall Street transformed the stock market by using proximity and high-speed connections to make deals faster, Sportradar is doing that with information coming out of sporting events.
The company’s clients include 85% of all U.S.-based bookmakers, including Caesars Entertainment, DraftKings Inc. (Nasdaq: DKNG) and FanDuel. Therefore, the flow of information Sportradar is providing to bookmakers is lucrative, and freshest data is the most valuable. As people are placing bets, Sportradar is simultaneously collecting data, and bookmakers change their odds accordingly.
Dave Abbott, Sportradar’s managing director for sports media, used Tom Brady winding up to throw a deep pass as an example of real-time information that is forwarded to the sportsbook, which then determines if it’s in bookmakers' interest to close the betting window at that time.
“The cost of being wrong, that's kind of high. And we want to make sure that we're protecting our operators from any potential errors,” he said.
To do this, the company has access to live feeds from each venue that are supplied by partner leagues. These direct feeds are less than a second removed from the live action, compared to the satellite broadcast, which can be as much as 20 seconds off.
When the company doesn’t have access to these fast feeds, they source the fastest over-the-air signal. This sometimes requires having an employee watching the game from an antenna in the market it’s being played in.
“It's a lot of hand-to-hand combat finding the fastest signals,” Abbott said.
The second factor in all of this is availability. To make sure the company can continuously send information out, its servers are on two separate power grids, which are also tied to backup generators.
Sportradar has over 1,600 customers in over 120 countries and is the official partner of the NBA, NHL, MLB and FIFA.
“There’s a fair amount of responsibility with that. And with betting, every second your down, that’s bank, that’s real money,” Abbott said. “It doesn’t take very long to get to the tens of millions of dollars.”
