Cloud-Native is the Real MVP of Sports Betting
Without cloud technology, consumers wouldn’t be able to place that last-minute bet on a March Madness Cinderella or their favored horse in the Kentucky Derby.
Major sporting events generate trillions of data points that must be analyzed in real-time for one increasingly lucrative function: gambling. Rob Kim, vice president of technology strategy at Presidio, discusses how sports betting is evolving and becoming cloud-native.
Today, sports betting generated $57.22 billion in the handle and $4.29 billion in revenue – jumps of 165 percent and 177 percent over 2020, respectively. Each dollar raises the stakes for the cloud technology and data processes powering the whole thing.
As more states legalize sports betting, services such as FanDuel and DraftKings are winning consumers over as destinations to place bets on their favorite sports. In fact, sports betting generated $3.16 billion in the first ten months of 2021, up 230% from the same period in 2020. Online betting makes it easy to bet on games as odds continually (and dynamically) change. For this to happen, most consumers don’t realize the vast amount of data processing and analysis required to make this work – and all in real-time.
Machine Learning Is Changing the Game
Machine learning capabilities process the changes to determine actionable outcomes, analyzing millions of data points (in seconds) to recalculate and present the odds accordingly. Moreover, the processing of all the statistics must be presented in real-time, as milliseconds can determine the profitability of any given wager. With the absence of cloud technology, consumers wouldn’t be able to place that last-minute bet on a March Madness Cinderella or their favored horse in the Kentucky Derby.
Odds, spreads, and money lines are the lifeblood of sports betting providers and can change instantly, so they must have the most accurate, up-to-the split-(nano)second stats. Moving from CPU to GPU-based processing and taking advantage of cloud-native services is key to how sports betting operators can analyze millions of data points every second. This means that the lines are constantly updated, ensuring bettors have the most accurate information before placing their bet.
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The Cloud Is a Safe Bet
Time equals money, and one-to-two minutes can make all the difference for a service provider. In fact, FanDuel found that downtime during major games can mean losses of more than $500,000 per minute. Should a customer lose huge sums of money due to lag time in data reporting or a service outage, they might be hesitant to do further business with that site and instead choose to wager with another provider. In an increasingly competitive industry, sports betting providers can ill afford to lose out to their competitors because of inefficient data processing (due to legacy data residencies – think traditional RDBMS, Data Warehouses, C-Store DBs, and even Hadoop).
It’s well-known that improving precision and accuracy requires higher volumes of clean data (veracity) processed at a higher speed (velocity). And while initial implementations of AI/ML use cases we trained with subsets of data, when implemented for scale, the impact of legacy data constructs limited the ability to improve precision/accuracy in forecasting (and decision-making) for the real business value. The demand for data modernization – shifting from traditional databases, HDFS deployments, and EDW to more distributed data services mesh architectures – has never been higher.
Greenfield deployments of a data mesh utilizing cloud-native services from the hyperscalers – namely Amazon Web Services, Azure, and Google Cloud Platform – have been the quickest way to modernize data and inject extensibility for aggregating new data feeds with ingestion and cleansing occurring in real-time. Utilizing serverless functions for ETL processing from intake to refined provides accelerated not only development-to-deployment but also an infinite scale. Moving from CPU processing to GPU (note NVIDIA’s Grace Hopper w/ NVLink) exponentially increases the processing speed on both training and inference. And by utilizing the cloud, scaling is not only infinite but can be geographically distributed.
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Accuracy at Scale
Beyond delivering accurate data insights, cloud-native services are also easily scalable, making it easy to react to significant spikes in demand around popular events. These events tend to see millions of bets placed, sometimes over a span of weeks or often all at once. In fact, this year alone, more than $588 million in wagers were placed on the Super Bowl, up 20% from 2021.
Cloud storage services help accommodate the influx of transactions occurring during peak betting seasons, scaling up and down as needed. The inherent malleability of cloud storage allows sports betting providers to meet the technological demands of peak seasons, storing vast amounts of customer and transactional data. With so much money going in and out during these major events, the stakes are high, so it’s essential to have a solution that can adapt as needed.
Given the amount of money changing hands during peak times, sports betting is especially attractive to hackers and requires strong security protocols. Cloud technology providers have several safeguards in place to protect against hackers, including end-to-end encrypted solutions and threat detection software. These tools aim to offer an extra layer of protection for consumer data, making it harder for hackers to gain access to sensitive personal information, like bank accounts, social security numbers or addresses. Further, threat detection software has grown so sophisticated that it can now detect and mitigate potential threats in real-time. Having these safeguards in place will go a long way to building a high-quality product that consumers can trust.
As the MLB season kicks off and the NBA and NHL playoffs grow closer, now is the time for sports betting providers to touch all their bases when it comes to getting their data in order. Cloud technology can help them revolutionize their offerings and build a championship-level product.
How do you see cloud-native changing the gambling game? Tell us what you think on LinkedIn, Twitter, or Facebook. We’d love to know!
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