Pavol Krasnovsky graduated from the Faculty of Mathematics and Physics of Charles University, in Prague, in the field of Theory of Probability and Mathematical Statistics. He also graduated from the University of Economics in Prague, in Finance. He worked as a researcher in statistics at the University of Warwick, UK, and also as a mathematical analyst for various algorithmic trading companies, on interest rates.
Together with his brother, they developed a mathematical solution for quantifying metagame for MOBA eSports games. On the basis of their experience, they founded RTSmunity, which has since emerged as the top eSports live-odds provider and market maker for eSports on the betting exchanges. He has worked as the CEO at RTSmunity since 2015.
GMB - There’s been a lot of talk about RTSmunity in Europe. For the Brazilian public that may not know much about the company, what exactly does RTSmunity do?
Pavol Krasnovsky - RTSmunity is an eSports analytics company established in 2015. What we do is that we take the live data feed from eSports matches, and then utilize our mathematical models to predict the result of the match. Based on these calculations, we supply our customers with live betting odds. We are also providers of risk management for betting operators, as well as liquidity providers on betting exchanges like Betfair.
What type of operators do you work with and what success stories could you tell us?
We cooperate with many operators, the demand for the top eSports-betting offer has really ramped up during the covid-19 situation. Amongst others, we really value the partnership with STS, the biggest betting operator in Poland. Our cooperation with Betfair exchange is also something that we are proud of.
The success story is usually very similar: betting operators don't take eSports betting that seriously, even though it is on the way to be the TOP 3 sport on the betting market. So now, when everyone can see how important eSports betting is and want to cash in on it, operators realize it works completely differently compared to traditional betting. They need a specialist in eSports. That's where we come in, because we can offer the expertise in both eSports betting odds, and risk management.
Once operators start to use our odds feed and trading, they see a dramatic increase in both the stake and profit. What was previously a small and sometimes non-profitable market, has become an - at least - top 5 sport, with the profit margin well over 10%. And that spins the wheel - when you start to invest in marketing, you get a new customer base and a strong source of revenue.
Was it the pandemic that made traditional sports bettors turn to eSports, or was eSports betting already on the rise before covid-19? Is the growth going to stop now?
There were two things happening in parallel. The pandemic definitely moved some of the traditional punters towards eSports, and some of them will stay there, although most of them move back to soccer or basketball. At the same time, this has really helped to introduce eSports betting to the broader audience. ESports betting has got new customers and they are now a solid customer base. ESports betting was already on the rise, the pandemic just accelerated what had been inevitable.
What is the actual profit that betting sites can be getting from eSports? Is it at the level of traditional big sports betting, or is there still a way to go?
In terms of the profit margin, it very much depends on the solution the betting site is using. We are the only provider who can guarantee that the betting site will reach a certain level of the profit margin. We came up with this idea, because many sportsbooks are going even, or even losing money. Of course the betting volumes are not on the level of soccer or tennis yet, but eSports are already top 5 worldwide and on the way to be top 3 in turnover. So, the best time to start building the top eSports-betting offer is today.
Have you measured the growth of eSports bets within the betting market?
To give you a picture of the eSports betting market, the forecasted volume of eSports betting market for this year is US$17.2 billion, and it is not stopping there. A big part of the eSports fans demographics is still untouched, because betting operators were targeting their traditional customers, and they simply have different needs. eSports are on the way to be the most watched sport in the world, and you need to speak the same language as your audience. Just during this pandemic, we have seen the growth of betting stakes from 3x to 9x, depending on the market. But again, I would not want to link the growth of eSports to covid-19, because the organic growth has already been impressive.
Do bookmakers even know about this "new world"? I mean, do they know how to attract bettors, how to understand the different modalities and generate different bets and odds. Have they adapted to this already?
This is a great question, and the short answer is: no. There are some bookmakers who are able to attract millenials and provide good content like STS and Parimatch, but generally, the understanding is very low. The most important thing is to avoid approaching eSports betting like traditional betting. If you provide the same design and betting environment for eSports as for horse racing, you will not succeed. It is exactly why we have developed our ESports Betting Iframe platform. It is a fully operational betting platform based on the market research of eSports fans, combining our odds and risk management with the live stream, statistics, chat and the unique elements of transparency. Betting operators can just connect the platform to their wallet, and integrate it into their website. The feedback we have got so far is stellar, because thanks to this platform, operators can skip years of development and research, and attract eSports fans within two weeks.
How does RTSmunity see Brazil? What difference does it make in this growing industry that Brazil is already one of the great world powers, especially in CS: GO?
We are amazed with the Brazilian eSports market. First of all, eSports fans in Brazil are one of the most passionate in the world, and the support they provide to CS:GO teams like Furia or MIBR is magnificent! Unbelievably spectacular. Same goes for the League of Legends - the finals this year hit 395k peak viewers. The involvement of brands like BMW, Coca Cola or Monster is extremely impressive. With a fan base like this, it would be a shame to not provide a top live-betting offer.
Do you already have clients from Brazil interested in your services? What do they generally need from RTSmunity?
We have been focusing on the European market this year, but since we launched our expansion to the LatAm region, we have started some interesting discussions with potential clients.
So far, the biggest question mark for them is the profitability of eSports betting products, and what are the things that eSports fans like to bet on. Our answer to the first issue is always simple: we guarantee the profit in the contract. And the second part? Betting operators need to have a great live-betting offer, with a high uptime. Around 80-90% of bets on eSports are in live betting, and therefore you need a wide offer of markets. Thanks to that, even if the match is one sided, you can still bet on markets like, in CS:GO, the winner of the next round, winner of the pistol round, handicaps, or who will take the first dragon in the League of Legends.
A large part of the protagonists in the eSports world are minors or very young people. Is it difficult to avoid relating the chance of betting with these types of players? Do you have to explain yourself more clearly to the society?
We don't really face this problem, because we cooperate with sportsbook operators who follow all rules of responsible gambling. Betting, and especially eSports betting, should be fun, but it is fun dedicated to adult customers. The general customer base in eSports betting is between 25 and 30 years of age, so although they are young, they are far from being minors. And it should stay that way.
Are eSports an ideal gateway for bookmakers to attract the young audience? It is a topic they dominate and know well enough. Do they risk it and bet on it?
ESports betting is definitely a gateway to the young audience. The reality is that eSports are dominating the world of young millenials, and bookmakers can capitalize on it. However, bookmakers also need to be very careful, because eSports fans are very well informed, and they don't have brand loyalty, so they will go straight to the bookmaker who has the best offer. If your live betting is suspended 50% of the match, why should they stay there? In future, having the top eSports-betting offer will be a must, because only 24% of eSports bettors occasionally place a bet on traditional sports. This is a new generation, and bookmakers need to fulfill their needs, and that's what we help them with.