Kristian Nylén, Chief Executive of Kambi Group Plc, has underlined the sports betting technology firm’s strengthened US commercial prospects, having settled terms to finalise its key contract with PENN Entertainment.
This morning, Kambi disclosed the deal closure terms of its lead sportsbook supplier contract with PENN, a partnership that the Stockholm-listed technology group has serviced since 2019.
To date, Kambi has led PENN’s wagering launch across 15 US states, consisting of 13 online licences, and servicing a further 25 retail sportsbook venues.
Final arrangements will see PENN begin to migrate in Q3 2023 its flagship Barstool online sportsbook onto its proprietary-built systems and will be followed by the planned transition of its US venues by 2024.
The end-to-end process will see Kambi pocket $28m in technology and service fees, providing its technical support for the migration, described as a fair settlement by Nylen as “it provides Kambi with continued revenue until 2024”.
“The agreement gives both parties clarity and certainty on the future, ensuring the partnership can continue to be a success until the completion of the migration.”
Moving forward, Nylen stated that Kambi would work on a case-by-case basis with regard to PENN’s continued market access strategy for 2023 and 2024.
“It’s not for me to announce Penn’s launch plans but what I can say is that they will be among the states preparing to launch in the coming months and where it makes commercial sense for Kambi to support PENN in the absence of its own sportsbook.”
Nylen dismissed current US market narratives, which indicate that operators and their investors faour ‘virtual integrations’ led by proprietary-owned technologies.
He responded: “There has been a trend among some of the larger operators to own their own technology, but that doesn’t mean to say they need or want to own all of it.
“In the main, these operators are seeking to complement in-house technology with high-quality, third-party sports betting products.
“As a prime example, bet365 recently said they were looking at outsourcing as a method to improve their sportsbook, which I feel is a good indicator for where the industry is headed.”
Providing a long-term view of the market’s development, Nylen underlined that US wagering would mirror established trends, in which the best technology suppliers would dominate the market’s supply chain.
“Over time, I believe the proportion of products being outsourced by these vertically integrated companies will only increase, leaning more on high-quality providers such as Kambi to not only improve the quality of their sportsbook but to increase their efficiency and profitability.
“That said, most operators will still demand a high-quality turnkey solution, so our focus is on continuing to push the boundaries of our full sportsbook offer, while simultaneously making available standalone elements for those looking to raise the standard of their own sportsbook.”