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Defining Sports Betting Tech

An arm of Unibet Group until 2014, the now-independent Kambi Group has grown to become one of the world’s premier suppliers of sports betting software solutions

Defining Sports Betting Tech

Kambi Group PLC is widely considered to be one of the world’s leading independent providers of online sports betting technologies and services, with its client list currently running to more than 40 business-to-consumer (B2C) operators on six continents.

The Malta-headquartered company offers an in-house developed software platform featuring an advanced front-end user interface as well as risk management, customer intelligence and odds compiling functionalities.

Kristian Nylen, chief executive officer of Kambi, notes that the history of the company stretches back more than 30 years to a meeting with Anders Ström. Then studying economics and mathematics at the University of

Karlstad in Sweden, the enthusiastic Nylen subsequently struck up a friendship with the man who would go on to establish betting and gaming behemoth Unibet Group in 1997.

Auspicious Inception

After completing his university studies, Nylen worked in finance, but was soon persuaded to join Ström at the new enterprise his entrepreneurial friend had just begun running from the bedroom of a west London flat. Inaugurated at the height of the dot-com boom, Unibet Group went on to benefit from the growing interest in iGaming and betting to become one of the world’s most prominent operators of domains, offering a vast array of online casino, poker, bingo and sports betting entertainment.

“As Unibet Group began to grow, the sports betting landscape was rapidly changing as regulation in Europe came into play and the popularity of live betting exploded,” Nylen says.

“Running a sportsbook in the early 2000s cost little compared to running one today, with in-play and regulation being the catalysts as they were driving costs. Live betting was still to establish itself when I started working at Unibet Group, but everyone could see that this was where things would go.”

Inspired by such trends, Nylen began advocating for Unibet Group to create a full business-to-business (B2B) sportsbook arm to help iGaming operators get the most from the burgeoning online sports betting sector. This enterprise went live as Kambi Group in early 2010 and was later spun off to become a fully independent enterprise with offices in seven countries—encompassing the United States and the United Kingdom as well as Sweden, Romania, Australia, the Philippines and its home nation of Malta.

“These emerging trends were putting enormous pressures on sportsbooks, which meant that they required ever greater tech resources to succeed,” Nylen says. “We formed the company to empower operators through best-in-class technology while alleviating the need for operators to engage in what was an increasingly resource-intensive process of sportsbook development with early partner signings including PAF and 888.”

American Adventure

The economic potential of regulated sports betting grew exponentially in May 2018 after the United States Supreme Court overturned the Professional and Amateur Sports Protection Act (PASPA). This piece of legislation had effectively outlawed sports betting nationwide, but its revocation meant that individual states were subsequently free to decide whether to legalize sports wagering. New Jersey, Delaware and Pennsylvania were among the first to begin proceeding toward a regulated market.

“I heard the confirmation that PASPA had finally been overturned while in Manila one evening,” Nylen recalls. “I had been visiting our office there and was very swiftly forced to change my plans. It turned into a very long night. Having been prepared for this moment for several years, we were able to quickly finalize several commercial partnerships with U.S. operators in the days and months that followed.”

Nylen says the company utilized its experience in licensed markets across the world, in addition to existing relationships with several American regulators, so as to ensure it was “action ready.” Kambi Group had soon inked deals with well-known operators DraftKings and Rush Street Interactive, to establish the enterprise as a trusted name in the United States sports betting industry.

“We always felt that legalized sports betting in the United States was a matter of when rather than if,” Nylen says. “So, it was always on our radar, and we had been keeping a close eye on it ever since establishing Kambi Group. By focusing on licensed markets and upholding the highest standards of regulatory compliance, we set up our business in a way that would enable it to enter the United States market swiftly when the time was right.

“The relationships we have subsequently been able to build with regulators in the United States have benefited not only us but the industry as a whole. We looked to share our experience in regulated sports betting with state regulators early on to help them to understand what would work with the regulation of sports betting. The ongoing reciprocal dialogue we have with these regulators has also been important in positioning Kambi Group to capitalize and succeed.”

With Pennsylvania one of the first American jurisdictions to have legalized sports betting following the repeal of PASPA, Nylen says Kambi Group decided to open its local hub in Philadelphia, Pennsylvania in the summer of 2019. Nylen describes this metropolis of approximately 1.6 million residents as full of passionate sports fans, before explaining that the company’s office has since grown to encompass more than 70 employees working across every aspect of the business.

“We’ve built a growing team of industry-leading sports traders, sportsbook controllers and risk analysts as well as commercial team members across the likes of sales, communications and partner success,” Nylen says. “The expertise and local knowledge we have been able to assemble in Philadelphia has been critical to our success in the United States.”

Pioneering Firsts

Kambi Group soon began experiencing success in the newly regulated United States sports betting market and processed New Jersey’s inaugural online wager with DraftKings in 2018. This was followed by a number of other market firsts including taking the first remote bet in New York with Rush Street Interactive before accepting the same jurisdiction’s opening land-based bet via Rush Street Gaming’s Rivers Casino and Resort Schenectady property.

“Prior to the repeal of PASPA, we knew that having a best-in-class retail offering would be pivotal to our success in the United States, and we put a great deal of effort into ensuring we were ready,” Nylen says. “Our retail offering is comprised of state-of-the-art kiosks and over-the-counter services as well as pioneering solutions like the ‘Bring Your Own Device’ technology, which enables patrons to build bets on their phones before scanning a QR code with a kiosk or teller. These have put Kambi Group in a great position to capitalize on the expansion of sports wagering.”

Nylen adds that Kambi is also committed to the more than 500 recognized tribes in the U.S., and today works with tribal gaming operators looking to leverage the strength of their brands through sports betting. He says the company is now considered “the go-to supplier for tribal operators,” and says he is delighted to be assisting these in growing their brands.

“Tribal gaming operators have similar values to ours when it comes to integrity and trust, so it made perfect sense to work with them as they look to offer a new vertical to their customers,” Nylen says. “Today we are partnered with seven tribal operators in various parts of the United States who have seen their properties become more profitable through the addition of sports betting.”

Constant Change

Nylen affirms that Kambi Group’s strategy for success in the U.S. is always evolving so as to accommodate a market that is similarly progressing. As part of this flowering, Nylen says the company has begun offering its services including the stand-alone Kambi Bet Builder and sport-specific odds feeds on a modularized basis so as to elevate elements of an operator’s sportsbook.

“Our belief is—and our sales pipeline demonstrates—that the majority of operators in regulated markets across North America and beyond will continue to require a full turnkey solution, and our focus remains on continually enhancing our full sportsbook offer while simultaneously having the flexibility to provide stand-alone elements for those looking to raise the standard of their own sportsbooks,” Nylen says.

“We are always looking to provide our partners with greater flexibility, while limiting these individual elements only to our complete service is to limit their potential. Alongside increasing our total addressable market with operators looking to elevate their existing sportsbook, this will also enhance the levels to which we are able to serve our existing partners.

“As well as providing individual modules from our sportsbook for operators to enhance their platforms and capabilities, we are also opening our platform to enable operators to plug other content into our sportsbook. This will greatly enhance the ability of operators utilizing our platform to bring their own trading to bear. As an example, I would offer taking control of the trading in a particular sport to leverage existing in-house expertise.”

One of the biggest debates currently gripping United States sports betting operators involves the employment of in-house technologies versus the utilization of outsourced solutions. Nylen says his view on this matter is that it is not as straightforward as “one or the other,” and to frame any such discussion in this way doesn’t accurately reflect a landscape that has changed drastically over the course of the last few years.

“My view is that, as the industry continues to mature, we will continue to see more outsourcing of specific products,” Nylen says. “To our knowledge, there isn’t an operator on the market that doesn’t outsource any aspects of its sportsbook, whether it’s incorporating third-party pricing feeds or making use of an external bet builder.

“The question should be to what extent the operator wants to outsource certain components of their sportsbook such as platform, odds compiling, risk management, the sportsbook front end or player account management platform. The extent of this outsourcing will come down to the strategy of each individual company, but there are none operating today with a 100 percent reliance on proprietary technologies.”

Looking further into the future, Nylen says the North American sports betting market is “evolving rapidly,” and will likely look “drastically different in the years to come,” owing to the premiere of new technologies and offerings. He adds that artificial intelligence (AI) and automation are to be key elements to this evolution, as these are finally moving beyond being mere buzzwords into becoming hugely influential to the development of the core sports betting product.

“Kambi has already taken the first steps on this journey by progressing our sportsbook beyond the market with our third-generation trading and shifting from algorithm-assisted human trading to human-assisted algorithmic trading,” Nylen says.

“Trading with algorithms, which represents true automation, enables us to greatly expand the number of available bet offers, fuel the creation of new products and increase the breadth of the combinability we are able to offer through our sportsbook. This AI-powered trading was successfully launched ahead of the 2022 FIFA World Cup and stress-tested at scale in powering our entire pre-match offering.”

Pleasing Possibilities

Nylen says the U.S. sports betting scene has come a long way since 2018, but still has plenty of room for growth, especially with the prospects of legalization in several major states, including Texas and California. He notes that California, with its population of over 39 million people, would instantly become one of the largest markets should it legalize online sports wagering while it moreover hosts a huge tribal gaming presence that could stand to hugely benefit from having the right partnerships in place when regulation does arrive.

Nylen also describes Brazil as another major potential market for Kambi Group as it looks to grow its provision of sports betting technologies. He says the company has already signed a partnership arrangement with local operator Rei do Pitaco, and is now furthermore intent on leveraging its sports betting technology once regulation passes.

“Rei do Pitaco is the largest daily fantasy sports operator in the country after achieving more than 13 million app downloads, and will continue to grow its reach through sports betting once regulation allows,” Nylen says.

“With a population of more than 200 million people, Brazil has the potential to become one of the world’s biggest regulated sports betting markets, and it is widely anticipated that legislation could be enacted over the coming months.”