While most U.S. sports bettors have never heard of Kambi, many will soon come into contact with the company’s technology in some shape or form, whether they realize it or not.
Based in Malta, the firm specializes in developing B2B sports wagering software, which customer-facing sportsbook brands can use as the backbone of their operation, or integrate into their preferred platform. It offers a range of services, which run the gamut from line setting and business analytics, to player account management and fraud prevention.
After the Supreme Court decision to do away with PASPA, the legislation which limited full-scale sports betting to Nevada for over 25 years, the company suddenly became relevant in the U.S., wasting no time inking deals with nascent sportsbook operators looking to launch both live and online offerings.
Already, Kambi powers three sportsbooks in New Jersey – one by DraftKings, the DFS behemoth which beat out the competition to make it first to market, along with 888Sport NJ and Play SugarHouse.
It is also ahead of the game in Pennsylvania, where three of the state’s six sports wagering licensees have signed on to deploy the company’s solutions in some capacity.
We recently had the pleasure of speaking with Kambi Chief Commercial Officer Max Meltzer, who gave us some insight into the company’s rapid U.S. expansion and explained why premier brands like DraftKings have chosen Kambi over the competition.
Kambi’s early U.S. wins
PennBets: Kambi is emerging as the dominant player in the U.S. market. Why has it so aggressively pursued this space?
Max Meltzer: I wouldn’t necessarily say we have pursued the U.S. online sports betting market “aggressively.” It’s more a case of Kambi being the natural fit for visionary operators in the U.S., operators that want to offer a high-quality sportsbook and harbor the ambition to become the market leader in their respective state, across multiple states or even east coast to west coast and everything in between.
PennBets: What are the implications of the early successes you’ve experienced in the country for the business?
Max Meltzer: In terms of implications, the success we’ve had so far shows that, if selecting the right partner, operators have the ability to execute on their own individual sports wagering strategies and differentiate in line with their brand.
For example, not only were our operators the first and among the first to launch in New Jersey, but they have done so offering very distinct products from one another. If you were to log on to DraftKings or SugarHouse on an NFL Sunday, you’d see two very different books both in terms of look and feel – different front ends, different bonuses, different navigation, different prices, etc. This is due to the freedom we give our operators to manipulate the Kambi Sportsbook and tailor it to their own players.
So while we are of course proactive in expanding in the U.S. to make the most of this opportunity, we are also subject to a lot of inbound inquiries as operators across the U.S. recognize Kambi, not just for the quality of our product, but also our operational excellence and ability to deliver.
Playing by the rules pays off
PennBets: What does Kambi do better than the competition, and how were you able to move so effortlessly into the U.S. market?
Max Meltzer: There are many reasons behind our success which, when taken together, have seen us become the number one choice for those looking for a trusted and quality sports betting partner.
First of all, our unwavering commitment to integrity and corporate probity. Kambi is a [NASDAQ] listed company and therefore holds itself up to the highest of standards. For example, since our inception we have been careful to avoid markets where gambling is prohibited. This was a conscious and long-term decision as, not only is it the right thing to do, but we realized it was likely to be looked favorably on by regulators when moving into new territories in the future – particularly in the U.S. which has always been a key part of our long-term business strategy.
Some other companies took a different route, and have had great success in the short-term doing so, but we are now seeing the benefits of our decision with regulators and operators in the U.S. understandably preferring to work with those that have a history of respecting local laws worldwide. This, coupled with our transparent ownership, gives partners confidence they are doing business with a company that will protect their integrity and reputation.
On landing big fish
PennBets: DraftKings is by far the dominant online player in the New Jersey market. Why do you think the company chose Kambi over your competitors?
Max Meltzer: As mentioned previously, it’s the freedom we offer operators to have as much or as little control of the sportsbook as they wish. You mention DraftKings, and they are of course a huge company with a powerful brand. They also have a large database of active DFS players that interact online with DraftKings on a weekly or even daily basis. As such, when DraftKings were looking at launching a sportsbook, they realized they needed a partner that would not only offer them a high quality product, but one which could provide the flexibility to deliver a sportsbook and experience that married with what its players had become familiar with on the DFS site. In short, it had to be a DraftKings Sportsbook, not an out-of-the-box solution.
How Kambi differs from its competitors is that it offers this freedom, this flexibility, to innovate, to create and to build a sportsbook as desired. Kambi takes all the heavy lifting through the provision of sophisticated technology, a powerful sportsbook core and an experienced trading and risk team to deliver exciting sports betting experiences, while the operators, if they so wish, can work with us to co-create how those experiences are packaged and presented, as well as what levels of vig are applied per sports and per market.
In addition, not only do we have an unblemished record from a regulatory perspective, but time and again we’ve shown the ability to grow operators from a standing start and become market leaders. For example, we’ve helped grow Unibet into one of the biggest sports betting brands in Europe, in a short timeframe 888 has become a tier one sports betting brand, in Colombia BetPlay and Rush Street’s RushBet are among the leading sportsbook brands in the market, while in New Jersey we have an approximate 60% online market share.
On the latter, we have been able to demonstrate our quick time to market, launching three different brands in the space of six weeks while some of our competitors are yet to get their customers online some four months after the market went live. And as you’ll see from the DraftKings Sportsbook at Resorts launch this week [the book launched on Nov. 20, after this interview], we are able to offer the same quality and differentiation capabilities on-property as we do online.
Max Meltzer: Considering only six casinos have applied for a license, having the number and quality of operators you mention choosing Kambi is quite a statement. Both Rush Street and Greenwood Gaming & Entertainment, which owns the Parx Casino, are tier one operators with fantastic premises, great brands and a real desire to become sports betting market leaders. They selected Kambi for many of the reasons listed previously and I’m confident we’ll be able to replicate our New Jersey success in Pennsylvania – a sports-mad, passionate state – when we go live in the coming weeks.
In terms of other casinos, given our NASDAQ listed status, we can’t talk about prospects openly in Pennsylvania or elsewhere but it’s important to understand Kambi’s strategy in the U.S. is not to proliferate regulating states with as many Kambi-powered sportsbooks as possible, but rather to diligently recognize and sign partnerships with groups that have the ability and desire to provide their customers with fantastic, unique sports betting experiences.
The future is wide open
While only six PA casinos have so far ponied up the $10 million fee to open up their own sportsbooks, several others are expected to eventually join the party. Those operators will have their choice of an array of software providers, such as William Hill, Scientific Games, SBTech and IGT, all of which currently power sportsbooks in New Jersey.
With Kambi’s track record outside of the U.S. and its speed and efficiency in bringing products to market in the Garden State, it won’t be a surprise if we see many of these casinos choose Kambi over the competition.