The repeal of PASPA in May 2018 was always going turn the focus for operators and suppliers in the industry to the US market. Opening up the sports betting market to be legalized on a state-by-state basis started the free-for-all that has since ensued, with many of the industry’s key companies battling it out for significant market share across the 22 states, which are currently legal.
But none were more prepared for market entry than Kambi. The sports betting supplier got a jump start on the rest by becoming the first to process online wagers in a post-PASPA world, with the launch of the Kambi-powered DraftKings sportsbook in New Jersey back in August 2018.And the supplier has gone from strength to strength in the market since. Launches in Colorado and Illinois during Q2 2020, partnering with Rush Street Interactive to take the first legal online bets in both states, increased Kambi’s US offering to 11 states where its now live, having delivered market firsts in nine of them. Its US focus was also demonstrated in its Q2 report, with the supplier’s geographical dependency on the European market decreasing to 73% from 77% in the same period last year.
There are several factors to Kambi taking to the US market like a duck to water. First, Kambi is already firmly established as a worldwide supplier, with more than 850 employees across seven locations including London, Malta, Stockholm and Sydney. That means the supplier has been offering NFL, NBA, NHL and MLB for a number of years, giving it a strong understanding in the country’s staple sports. That gave it a firm footing to begin its foray into the US.
But as Kambi’s chief commercial officer Max Meltzer, tells Gaming America, there other key elements that have allowed the supplier to stand-out from a crowded marketplace.
“The US has always had the potential to be a huge market for sports betting, and the repeal of PASPA opened up a big opportunity for industry stakeholders,” Meltzer explains.“The US is a nation of sports lovers, and sporting institutions like the NFL and NBA are among the biggest in the world, drawing global interest. As such, the focus of industry conversation has naturally been on the US over the last couple of years, and we are deeply proud of the growth and success of our US headquarters in Philadelphia, which has attracted talent from across the country to support our continued drive in this hugely important market. Forging strong relationships with state regulators has been a crucial aspect underpinning our progress, and Kambi more than any other provider has underlined our proficiency in regulatory matters.”
Being able to broadly differentiate through their technology has also been key. “Kambi partners have the freedom to undertake control of the front end to ensure their sportsbook is differentiated and aligned to their particular brand,” he adds, “building their own client on top our APIs to take complete control of the user experience and allowing them to most effectively direct user navigation.”
From specialising predominantly in the European market to making the jump into the US naturally requires a tailoring of Kambi’s product offering. The biggest difference is the land-based focal point of the US gambling industry, with online betting very much in its infancy. According to the American Gaming Association (AGA), there are 993 commercial and tribal casino properties in operation across the US. That required Kambi to invest significantly in its property offering, to enable it to adapt to the needs of its US customers. And in a post-COVID world, adaptability is key, especially when it comes to supplying casino technology.
Launching our partners in regulated states is naturally a cornerstone of our growth strategy. Aside from our recent partnerships, we are also set to launch the Barstool-branded sports betting app in Pennsylvania with Penn National, with more states to follow. It’s worth emphasising that Penn has potential access to 19 states should they all regulate sports betting.
As Meltzer outlines: “Prior to PASPA’s repeal, we recognised that having a cutting-edge offering for land-based operators would be crucial, and a particularly impressive marker of our progress here has been the impact the Kambi kiosk has had on how players choose to bet in the US.
“Over the past two years, these have generated up to 75% of handle at our partners’ casinos, providing a valuable opportunity for new bettors to familiarise themselves in a pressure-free environment, while having the added benefit of reducing queues for over-the-counter services – quickening the player journey and optimising turnover.
“More recently, the launch of our bring your own device (BYOD) technology has played an important role. With the importance of social distancing set to remain for some time to come, the technology enables bettors to view lines and construct bets anywhere, generating a QR code that can be scanned at the counter or Kambi kiosk, placing their wagers without coming into contact with any surfaces.”
The importance of migrating from online to land-based has been amplified by the pandemic, which caused all major live sport to be suspended from March worldwide.
That included the big four US leagues, which all gradually returned over the summer, with the NFL back in action in mid-September. That led to the supplier’s Q2 revenue falling 32% year-on-year, down to €14.8m ($17.5m) as a result. Despite this, Kambi’s offering in less traditionally popular sports such as table tennis and mixed martial arts (MMA) managed to mitigate the loss of the major offerings, which resulted in a slight revenue growth for H1 2020, compared to 2019.
Bearing in mind that was with a reduced contribution from international tennis and major US sports, the virtually full return of live sport, now the NFL is back, is more than encouraging for the supplier. Kambi has used the period to enhance its NFL product, and overall sports offering, with the introduction of the Kambi Multi Builder. This bet builder allows players to combine several event combinations into a single bet for the first time, giving players more freedom and ensuring the supplier comes back bigger and better from the lack of a sporting offering.
The pandemic certainly hasn’t stopped Kambi’s US footprint from growing. In September, just two weeks after the partnership was agreed, the supplier launched a BetAmerica sportsbook at the Islands Resort Casino in Michigan in partnership with Churchill Downs.
Head of trading Simon Noy recently spoke to sister publication Gambling Insider about how adamant he is that the pandemic has brought Kambi’s solution into sharper focus, and the commercial appetite for its services still remains high especially as US states continue to regulate at pace and accelerate to online as a result.
In terms of future expansion, Meltzer delves into detail about Kambi’s upcoming plans. “Launching our partners in regulated states is naturally a cornerstone of our growth strategy,” he says. “Aside from our recent partnerships, we are also set to launch the Barstool-branded sports betting app in Pennsylvania with Penn National, with more states to follow. It’s worth emphasising that Penn has potential access to 19 states should they all regulate sports betting.
“As a technology partner, we exist to facilitate our partners’ strategies, and our track record underlines that our ability to launch operators in new states quickly and in full compliance with all local regulations remains unmatched.”
Specifically in terms of sports betting, Noy expands, adding: “Betting volumes have proved resilient, and our momentum is definitely building as we now look to build on that. Our overriding aim throughout was to protect our staff and the long-term interests of Kambi and our partners, and we can be pleased with our performance and move forward with confidence as we now look to accelerate.”
While Kambi has managed to expand and perform strongly in the midst of the pandemic, there are of course lessons to be learned. As Noy alludes to, the key for sports betting operators and suppliers is to “ensure that you have as relevant a sport offering as possible at all times. If traditionally popular sports suspend their calendars, then your coverage of more niche sports like table tennis needs to be of comparable breadth and quality.”
The ability to adapt quickly to the more niche offerings has seen businesses such as Kambi, stand above the rest during this current period, with the pandemic instead allowing them to ramp up existing offerings rather than being caught out.
And adaption has been key to Kambi’s US journey, which has allowed it to transition from a major player in Europe to a big name in the states. Being able to firm its status in spite of the pandemic is testament to Kambi’s standing in the industry, which is surely only destined to grow further.