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Reddit goes public

Sportico this week brought us the story of “the year’s most anticipated offering,” the upcoming IPO of internet chat board Reddit.

The business went live on the New York Stock Exchange on Thursday 21 March with a $6.5bn valuation.

Of particular interest to Sportico and to the sports and betting sectors, however, were “hints in [Reddit’s] prospectus that sports could be in its future. Or, more accurately, that selling user-generated sports-related data could be a significant revenue stream one day.”

Currently, the business makes its revenue primarily through advertising, and its strategy there is clearly a lucrative one – the firm generated $804m in 2023, up 65% compared to 2021.

It’s worth noting that in spite of that healthy revenue figure, the business did not turn a profit but lost $90.3m overall in 2023.

In order to turn that reality around and get its finances into the black, Reddit is reportedly considering a new business model where it would sell its real-time and historical data, including in sports.

“We are in the early stages of allowing third parties to license access to search, analyse and display historical and real-time data from our platform,” the company said in a filing with the SEC.

Commentators in Sportico’s article on the topic suggested that “actionable information for betting purposes” are generating a lot of interest at the moment and that “people will certainly pay for it.”

They also pointed out that just as Reddit users have previously been able to manipulate certain stocks in the market – like GameStop – sport-focused forums can be used to manipulate sports betting lines, “zero doubt about it.”

Bookies could therefore benefit from having access to real-time data from Reddit, as the amount of discussion around particular sports topics could help them to set appropriate odds for certain markets.

Until Reddit tells us more than the hints included in its prospectus, it remains to be seen how exactly the firm plans to benefit from its wealth of sports discussion and data.

That will also impact the company’s eventual value as investors continue to buy and sell shares after its launch this week.

If the firm’s first day of trading – when investors surged the share price by 48% in just a matter of hours – are anything to go by, Reddit could turn out to be yet another online success story for investors globally.

Lost in translation

The Los Angeles Times this week put out a story on a rapidly developing and controversial story from the world of baseball.

Japanese star player Shohei Ohtani, who signed a record $700m, 10-year contract with the LA Dodgers in December, has found himself embroiled in a multi-million dollar gambling scandal.

Ohtani’s legal representatives on Wednesday accused his interpreter Ippei Mizuhara of a “massive theft” of his money, which was then used to place bets with an alleged illegal bookmaker, which is currently the target of a federal investigation.

Two sources told the Los Angeles Times that the value of the theft was in the millions of dollars.

After the information came to light in the media, Mizuhara was fired by the Dodgers. Major League Baseball rules prevent those involved with the sport from making any bets on baseball, or any illegal bets on other sports.

The punishment for any breach of the rules is not pre-prescribed but will instead be “such penalty as the Commissioner deems appropriate in light of the facts and circumstances of the conduct.”

It seems Mizuhara, who was known to be very close to Ohtani, will no longer be working as his personal interpreter for any official MLB business.

Meanwhile, the alleged unlicensed bookie in the case, Mathew Bowyer, is no stranger to the occasional legal action.

He previously faced a $1.8m judgement against him for defaulting on a line of credit issued by Foxwoods Resort Casino in Connecticut, and was alleged to have bounced a $250,000 check to the Aria Resort and Casino in Las Vegas.

As for the outcome of this particular case, that’s something the sports media world will inevitably be keeping a very close eye on.

What next for UK high streets?

The Guardian’s Rob Davies, well known for his thorough and regular coverage of the world of gambling, this week brought us a story about a peculiarity of the UK high street; adult gaming centres.

These “slot machine farms” are one of just a few high street venues which are “quietly flourishing” in Britain, Davies suggests, “despite, or perhaps because of, the cost of living crisis.”

An Observer investigation into the centres raised further questions around how they are regulated and “whether their operators are bending the rules to squeeze cash out of potentially vulnerable customers.”

Of further concern is the potential impact gaming centre operators such as Admiral and Merkur might be having on the UK’s political system via their lobbying efforts.

As the government begins to implement the changes to gambling regulation brought about by the Gambling Act review white paper, online operators are set to face increasingly tough restrictions on what they can offer their customers.

At the same time, however, high street venues like adult gaming centres may find the regulations that govern them beginning to ease.

“With one eye on a looser legal landscape, the sector’s major players are plotting aggressive expansion, pitting their vast resources against cash-strapped local authorities and the communities they serve,” Davies writes.

And with cash machines positioned conveniently inside, free tea and coffee for customers and other hospitable elements all on offer, it can be all too easy for players to spend beyond their means.

The article features quotes from one such player, who said she lost over £2,000 over two days of play, “in such a daze that I just don’t really care any more.”

Readers are encouraged to view this article in full to get Davies’ take on the potential dangers of expanding this sector.

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