- DraftKings has partnered with Kambi for technology services since June of 2018.
- DraftKings acquired betting technology provider SBTech in December 2019.
- The current contract between DraftKings and Kambi will end no earlier than September 30, 2021.
Two industry leaders in the nascent United States sports betting market are going their separate ways. On Thursday, Malta based Kambi and Boston based DraftKings announced an agreement for the dissolution of their partnership. The two companies have worked together since June 2018.
DraftKings is in the process of migrating to a proprietary technology platform so there’s no animus between them and Kambi. In fact, the two companies are acting downright adult-like as they go their separate ways. DraftKings purchased sports betting technology provider SBTech in December, 2019 and the resources gained in that acquisition will be leveraged to create their own system.
The way the arrangement will work: the official end date of the contract between Kambi and DraftKings will be ‘no earlier than September 30, 2021′. Under the agreement, Kambi will continue to receive the same amount of revenue share from DraftKings’ sports betting operations regardless of what technology platform is in use at the time. That bit is necessary since the agreement also gives DraftKings the ability to begin use of proprietary technology prior to that date. Additional components of the agreement concerned the division of duties between the two companies during the transition as well as steps to safeguard Kambi’s intellectual property.
Paul Liberman, DraftKings President of Global Technology and Product, spoke positively of the relationship they’ve had with Kambi:
“Kambi has been a collaborative partner and was instrumental in DraftKings being first to market in New Jersey with our sportsbook. We appreciate the efforts they have made, and will continue to make, in helping to ensure a smooth migration for us as we move on to our own platform.”
Kristian Nylén, Kambi CEO, said the relationship has been good for both companies:
“Since partnering in June 2018, the Kambi-DraftKings relationship has proven to be highly rewarding for both parties, delivering first-class sports betting experiences to players across more states than any other sportsbook, and establishing Kambi and DraftKings as true leaders in their respective fields. The agreement we’ve announced today works to secure a strong revenue stream for Kambi for the next 15 months, while our growing and exciting portfolio of partners leaves me with no doubt that Kambi is well placed to extend its leadership position over the months and years to come.”
Kambi has been one of the early success stories in the US sports betting marketplace as well as being a major player worldwide. Some of their clients include 888 Holdings, ATG, Kindred Group, LeoVegas, Penn National Gaming, and Rush Street Interactive. Kambi employs more than 850 staff across offices in Malta (headquarters), Australia, Romania, the UK, Philippines, Sweden, Australia and the United States.
DraftKings’ move to a proprietary technology platform serves to illustrate a challenge that Kambi faces going forward. As sports betting companies grow there’s a point when it becomes in their best interest to bring technology and related services in house. At the same time, their market niche is becoming more competitive and in some cases more specialized. For example, gaming giant IGT–historically best known for video poker and slot machines–has focused more seriously on the sports betting industry in recent years. They’re a huge ‘one stop shop’ company for gaming IT and services with some seriously innovative technologies.
Meanwhile, smaller companies are having considerable success. ISI Race & Sports was a pioneer in the creation of betting kiosks and they’re working several angles now including a partnership with IGT on their cutting edge CrystalBetting terminal as well as marketing their own turnkey sports betting solutions. Las Vegas based US Bookmaking was founded by Nevada sportsbook legend Vic Salerno and has become something of a specialist in providing sports betting technology and services to tribal gaming customers.