GR8 Case Study: 34% In Profits Through Margin Management

Making extra profit in the betting business can be hard, especially if additional investments are limited. This is where things start to get interesting.

After learning the hard way, we found a solution in margin management that helped our client achieve an additional profit increase of up to 34% without extra marketing costs or feature development. Let’s figure out how this delicate balance between more profit and player satisfaction worked out.

The Role of Odds Personalization

Of course, every operator would like to maximize margins and increase profits, but the sports betting business doesn't work that way. Much like the retail business model, operators in the iGaming industry strive to optimize their returns by setting higher odds. Still, the competition is fierce, and similar products are lined up nearby. As shoppers consider price tags in a supermarket, potential users assess odds as value indicators before making choices.

Setting margins and odds is the art of finding balance, which requires understanding the market dynamics, competitors' offerings, player behavior patterns, and the team's technical expertise to implement this knowledge in the product. 

The key to striking the right balance begins with proper player segmentation. Typically, operators segment players within the context of risk management to prevent losses due to low-tier tournaments, bonus abuse, or fraud. However, segmenting players is not only about risk prevention but also about optimizing profit.

💡 For instance, specific player segments may not care about a 1-2% odds difference but value recognizable branding that supports their favorite team, relevant content, a user-friendly interface, convenient wallet top-ups, and assured fund withdrawals.

The art of odds personalization lies in accurately identifying these segments. Correct segmentation, followed by tailored adjustments, enables attracting new users with favorable odds, retaining professionals who compare ten operators before every bet, and earning more from players for whom the operator's value hinges on odds variations. Nonetheless, achieving odds personalization demands platform functionality and a team with the necessary expertise. This intricate process involves numerous nuances that betting software providers often overlook or need to gain expertise to develop.

In the GR8 Sportsbook and GR8 Managed Trading Services (GR8 MTS), odds personalization is not merely a risk management element; it's a tool that empowers our clients to gain up to 40% GGR without additional investments. The profitability stemming from this tool surpasses the cost savings associated with opting for a more straightforward platform solution.

Next-Level Odds Personalization Capabilities

While exploring ways to improve our client’s performance, we came up with an idea of taking odds personalization to the next level. We personalized margins, limits, and delays for each player segment. Furthermore, we flexibly customize any sport, event, market, or tournament for the customer base and specific segments of any region where the operator’s brand is present.

Odds personalization finds its application in two key scenarios:

1) Margin reduction, leading to higher odds and attracting players—ideal for promotional efforts targeting new or existing players seeking enhanced value.

💡 Consider Brazilian VIP players who stopped engaging in volleyball bets. By identifying and segmenting this group, we can present them with exclusive offers featuring improved odds. This strategy effectively boosts customer loyalty, stimulates participation, and rekindles their interest in betting.

2) Margin increment appeals to customer types less concerned about slight odds changes. Typically, these players bet to support their favorite teams or amplify their excitement while watching matches.

Such changes in odds often go unnoticed by bettors, yet they help operators boost their revenue without the risk of churn or the need for extra investments. Operators can segment bettors using, for example, our risk management tools. This method protects data since it only uses user IDs for adjusting margins, keeping sensitive player information safe.

Proven Results: 34% in Profits in Q3 of 2022

In Q3 of 2022, we successfully executed a personalized odds strategy for a client operating in the Indian market. This move led to a remarkable 34% surge in profits from the specific user segment for which we applied personalized odds. So, let's dive deeper into the details.

What was a business objective

What metrics were analyzed

We pinpointed a segment of active users who had placed at least one bet within the two months preceding the testing phase. This user segment was then divided into three cohorts for comparative analysis, with personalized odds introduced solely to one of these cohorts.

Our analysis encompassed critical metrics such as Turnover, Margin, Retention Rate, and Gross Gaming Revenue (GGR). We closely examined the disparity in GGR and Margin between users with personalized odds and those without.

What was the testing process

Previously, we piloted the concept of personalized odds among our clients operating in Europe in a more straightforward form for a precisely targeted user segment. However, this recent implementation marked the first time we executed this strategy on such a significant scale.

Preliminary tests in the Indian market were conducted before Q3, focusing on small groups of seasoned players and avid odds enthusiasts who usually operated within a slim margin range of less than 2%. The results of personalized experiences showed that even for these players, a reduction in odds was not critical and did not lead to massive churn.

The final result

Our analysis validated the effectiveness of our strategy, as the client reaped a remarkable 34% profit increase from the personalized odds segment, contributing to 8% of the overall GGR during Q3 2022.

Furthermore, our hypothesis was substantiated that odds and margin variations had a minimal impact on players who engaged in betting solely for the enjoyment of the game. Notably, no churn was observed among this subset of active players.

Currently, we are scaling the same strategy to cater to diverse player segments. The max profit formula is also being extended to encompass a broader spectrum of sports and cater to clients operating in different geographical regions.

To Sum Up

This case proved what many operators suspect but rarely validate at scale: smart margin personalization can unlock profit without extra marketing spend, feature development, or player churn. By segmenting users properly, adjusting odds with precision, and relying on a secure platform, you can also achieve positive results.

With case results, we’re now expanding the model across more sports, more markets, and more player types. The formula is simple: understand who your players are, tailor the value they receive, and let the platform do the heavy lifting. Margin personalization is a proven lever for operators looking to grow without additional risk.