New School Freshens Old Pools

For the last decade, football-based pool betting has been in steady decline in the United Kingdom. The decline was sparked by the launch of the National Lottery in 1994, which competed with the football pools in the low-stakes, high-prize market. But the last twelve months have seen an increasing number of new online pool betting products springing up. What lies behind the renewed interest in pool betting? Can the Internet revive the sector?

“Pool betting has been fairly quiet since the start of the National Lottery,” admits Paul Nicholson, the marketing manager for Pools4all.com, which recently launched its football pools betting Web site under an Isle of Man license.

In the United Kingdom, total pool betting stakes have fallen by over £200 million between 1998 and 2007, when pool-betting stakes stood at £81 million. But Mr. Nicholson believes that punters are coming to realise they have a more realistic chance of winning a meaningful prize with pool betting games compared to the lottery for equally small stakes. He also argues there is a greater mix of skill and luck in the new generation of online pool-based prediction games, which is appealing to players.

At EiG’s Launchpad session in September, two of the new businesses that made pitches were based on pool betting and one of the others was a betting-exchange model. One of the companies that made a pitch in Barcelona was Pikum, which has launched describing itself as the “next generation football pool.”

Tony Poskitt, managing director of Pools4all.com, agrees that these new pool games have modernized the sector.

“Playing traditional football pools is like watching a match on black-and-white television,” he said. “Pools4All.com brings the game into the digital HD age and makes it a lot more fun.”

But Sportech, the London-listed company that operates the traditional football pools game, has not been idle either. It revamped itself under “The New Football Pools” brand with extra game variations and new features in time for the start of the football season back in August.

Early indications are that the overhaul is having the desired effect of breathing a new lease of life into the football pools. In a management statement in November, Sportech issued an upbeat report:

“The Board is pleased to report that despite launching The New Football Pools into challenging economic circumstances, the online business has recruited more than 20,000 new registrations and 15,000 active customers in the 11 week period since the start of the football season. Furthermore, progress continues to be made in the traditional routes to market (collector and direct mail), as customer numbers for the traditional Classic Pools game continue to show their strongest resilience since 1994 and, for the first time in recent history, over this period Sportech has been a net recruiter of customers.”

It is tempting to see the social networking phenomenon and online poker as being behind this recent renewed interested in the pool-betting business model. Pool betting is an ideal model by which to leverage social networking features because it brings a group of players together -- all of whom maintain an opinion on the weekend’s fixture list. So it’s no surprise that the modern generation of pool games Web sites include community features, forums, chat facilities, player profiles and the option to create private leagues with friends.

The boom in online poker over the last few years could also have been a spur to sportsbetting pool games -- poker, after all, is effectively operating a pool-betting model. In tournaments, players contribute to an overall prize pool, and the players that fill the top places take the biggest share of the pool. It means that there is a new generation of punters who are comfortable with the pool model and online operators could be looking to exploit this familiarity across other products. For start-up operators the pool-betting model is also attractive because, from a risk-management and odds-compilation perspective, it is a simpler business model to control.

But as with online poker, the same concerns afflict sportsbetting pools -- marketing and liquidity. For new companies, getting noticed is crucial because it is only through a critical mass of regular players that the pools build up sufficient prize funds to be attractive. It requires a sustained and intelligent marketing campaign to get noticed, which can be costly in the crowded marketplace of the United Kingdom. Another tactic adopted by some operators has been to offer a tempting jackpot prize, which again requires funding.

There has certainly been innovation in the traditional United Kingdom pool-betting sector to bring it into the modern I-gaming age, but it is too early tell at the moment whether punters’ interest will be maintained over the long term and whether that will translate into financially successful businesses.