The value in data – obtaining, using and protecting data in sports and betting

In 2002, the Oakland A baseball team went on their famed 20-game winning streak (popularised by the 2011 film starring Brad Pitt, Moneyball). One of the keys to their success was making use of advanced statistics and analytics to drive decision-making for playstyle and recruitment. Since then, data-driven decision-making has become part and parcel of how professional clubs operate their teams as well as their social media and game-day sales strategies. An article by Forbes quoted that the market for sports analytics was expected to reach almost $4 billion in 2022, and arguably that may be an undervalue. The same quantitative analysis is now also being applied to another billion-dollar industry, sports betting, in order to enable bookmakers to calculate odds and offer an increasingly dynamic and moment-to-moment “in-play” betting experience.

Given the value of sports data to bookmakers, it is perhaps unsurprising that it has found its way into the court room. In 2020, the Court of Appeal was asked to rule on a case involving horse racing data and its use for the creation of odds by “off-course” bookmakers (The Racing Partnership Ltd & Ors v Sports Information Services Ltd). The claim was brought by The Racing Partnership to protect the exclusive rights it had been granted by racecourses to collect, aggregate and export racecourse data obtained on-course to off-course bookmakers, in order for those off-course bookmakers to update, and ensure the accuracy of, the odds they offered. The Racing Partnership claimed that Sports Information Services (a former exclusive licensee which had been succeeded by The Racing Partnership) had encroached upon that exclusivity as well as infringing other intellectual property rights claimed in the relevant data.

Where does the value in the data reside?

The value to the intermediaries in having the exclusive right to collect and export that data was clearly reflected in the substantial sums that the likes of The Racing Partnership and Sports Information Services were willing to pay for those exclusive rights to utilise it. Additionally, the value of the racing data to the off-course bookmakers arose not only from the reliability and accuracy of the information as it appeared on-course, but also from the speed with which it was provided to them. In the world of horserace betting, speed of data transfer is essential to bookmakers as the value of the data can have a relatively short shelf-life. The data is also “dynamic”; data points can shift and change up to the very last moment before a race begins, whether that’s the on-course bookmakers’ odds or the unpredictable weather and track conditions.

In the past decade, particularly in the UK and Europe (though increasingly in the US too), we’ve seen a huge surge in “in-play” sports betting across other sports. In a similar fashion, this style of betting requires bookmakers to continuously change their odds during the course of a game as the relevant data and probabilities change. In football, for example, in-play odds may be dependent on the live score, overall ball possession statistics, injuries, individual player form, or chances created as the game progresses. Data reliability, accuracy and speed of transfer from the data collectors at the relevant matches to the “off-premise” bookmakers is crucial to allow them to update their odds and keep them relevant.

How can it be protected?

A curious feature of The Racing Partnership case was the patchwork of legal rights that The Racing Partnership relied on to try and protect its exclusivity in the racing data, which included copyright, database rights, contract law and the law of confidence. Unfortunately for The Racing Partnership, none of these legal rights were found to have been breached/infringed on the facts. That said, the Court of Appeal accepted that these rights could potentially be used to protect data and therefore to exclude third parties from extracting value from it in certain circumstances.

The challenges associated with protecting commercially valuable data through legal means make it imperative for players in the field (no pun intended) to operate flexibly in order to maximise the protection available depending upon the type of data in question, and also to implement appropriate processes and operational management for the acquisition, collection, storage and maintenance of the data. For example, where data may be protected as confidential information it must satisfy a three step test: it must have the necessary quality of confidence, it must be imparted in circumstances importing an obligation of confidence, and there must be an unauthorised use of that information to the detriment of the rights holder. In The Racing Partnership, the Court of Appeal overturned the first instance decision and found that the data had not been imparted in circumstances importing an obligation of confidence, because the relevant contracts did not provide for any express restrictions on the dissemination of data. Here, the lack of operational management of the data in question through contractual restrictions proved fatal to a claim for breach of confidence.

In-play sports betting data may not seem confidential, particularly in circumstances where a sports match is broadcast live on television (and indeed this was a point raised in this case in relation to horseracing). However, access to that information in real-time and the rapid transfer of that data to bookmakers will allow them to update their odds before the information is broadcast on television. Otherwise, viewers of the broadcast would be able to place bets based on outdated, more favourable, odds. Therefore, for the very short period of time between the instance of the data point (e.g. a goal being scored), to that information becoming publicly available (e.g. the TV broadcast of the goal), the data, if managed correctly, might be considered commercially confidential information.

What could detract from the value?

The commercial value and viability of sports data may also be affected by regulatory hurdles. An obvious example is where data being collected is personal data and therefore subject to the requirements of data protection law such as the GDPR. In October 2021, a group of professional footballers in the UK sent letters before action to 17 data companies, including betting, entertainment and data collection firms, for trading of their performance data over a period of six years. They assert that the fact that players do not give consent or receive payment for the unlicensed use of their data (which they say amounts to personal data) contravenes the GDPR. If their claim is successful, this could lead to a monumental shift in the way data about sports players can be collected and used.

How can the value be extracted?

As sports organisations become more and more sophisticated about their use of data, they will want to be the parties who control and extract the primary value from it. This is likely to result in their placing more robust restrictions on other third parties with access to the data who wish to collate and export it themselves. Bearing in mind the challenges associated with relying on IP rights and the law of confidence, the primary restrictions within an organisation’s control are likely to be found in the terms of their contracts with those third parties. However, depending on the data in question, other restrictions and steps may also prove invaluable, such as encryption of recorded data, access control, greater security at fixtures, and internal data protection policies and governance.

The many commercial uses of sports data can make it a valuable asset, particularly for bookmakers, individual clubs, and managers of sports teams and players. Whether the use case is betting, detailed analytics (to drive decision-making on performance, tactics, etc.) or to inform ways of engaging with supporters (e.g. by social media campaigns or ticket pricing decisions), much of the value in the data comes from its confidential nature and any exclusive rights that a party has to utilise or analyse it. Sports organisations should ensure they take appropriate steps to protect the data if they want to extract its value while it remains within their control.