Kambi Group is a growing presence on the sports-betting scene. The European bookmaker, whose leadership is Swedish, handles a good chunk of the sports wagers made in Pennsylvania and New Jersey.
But Kambi is not exactly a household name.
Kambi is OK with that.
The company last month planted its North American flag in Philadelphia, opening its U.S. headquarters in an office in the Wanamaker Building, which is close to current and potential clients. Kambi is the platform for sportsbooks at SugarHouse, Parx, and Rivers Casinos in Pennsylvania, and DraftKings and PlaySugarHouse.com in New Jersey, though its name is not in the forefront.
“We don’t want consumers to know Kambi,” said Max Bichsel, Kambi’s U.S. sales director. “We want them to know Parx or SugarHouse or Rivers or DraftKings or whomever we’ve partnered with in that jurisdiction.”
For now, Kambi also has a lock on all online Pennsylvania sports betting, because SugarHouse, Parx, and Rivers Casinos are the only Pennsylvania casinos licensed to take internet bets. That will change later this year, when industry heavyweights FanDuel and William Hill-US go online in Pennsylvania.
Through DraftKings in New Jersey, Kambi processed the first online bet outside of Nevada last year after the repeal of the federal sports-betting ban unleashed a growing tide of states legalizing sports betting.
In Philadelphia, Kambi hopes to eventually employ 50 to 60 employees to put an American cast on the product that now comes from its primary operations in Stockholm and in London. Its technology platform calculates odds, assesses risk, and manages the back end of sportsbooks.
And yet Kambi, whose corporate head office is in Malta and whose shares are traded on the Stockholm Stock Exchange, is a cipher except to industry insiders. Its customers are sportsbook operators, not retail bettors.
Kambi differs from large multi-jurisdiction companies like Caesars, which supplies bookmaking services to its own properties, including the Harrah’s, Caesars, and Bally’s brands. It also differs from international bookmaker William Hill, which partners with mid-sized operators to market its sportsbook under the William Hill brand. Kambi stays out of the retail business and works more in the background.
The company was formed in 2014 as a spinoff of Unibet, which is now called the Kindred Group. Kambi reported about $11 million in profits last year on $86 million in revenue.
Kambi provides the engine and chassis upon which licensed operators, such as casinos, can wrap their customized sportsbooks. Kambi traders set betting lines, assess risk, and after an event is complete, settle wagers. The operators process payments and maintain customer information.
The operator takes on the risk, and sets limits on wagers; Kambi is paid based on the operator’s performance, or profit.
With the rapid growth of sports betting in America, Kambi hopes to establish a brain trust of sports betting in Philadelphia. “It was a strategic decision for us to attract talent,” said Bichsel, 29, who grew up in Cranberry, N.J., and now lives in New York.
While other gaming companies chose to locate near New York City, Kambi thought Philadelphia represented a more promising raw talent pool for a bookmaker. There’s less competition in Philadelphia than in New York, where professional sports leagues and sports technology companies have offices, along with Google, Amazon, and Microsoft.
Basically, the company is looking for sports nuts with math skills.
“We’re hoping to take people who have a passion for sports, maybe they’re in another business like finance or whatever, and convert that into what we need from an operational perspective — trading, risk management, sales, partner success,” said Bichsel, who played collegiate golf, which he noted, is a sport whose players are very familiar with wagering.
Phil Richards, Kambi’s U.S. general manager, who recently moved to Philadelphia from the United Kingdom, thinks the region is a good fit for a sports-tech company.
“I’ve never been to a city that’s more sports mad than Philadelphia,” said Richards. That’s saying a lot because Richards, 33, is a London native and an avid fan of Premier League soccer, whose fans are known for their enthusiasm. Richards, a follower of the Crystal Palace club, still has to pause a beat to say “soccer” instead of “football.”
The ‘Kambi Way’
Kambi Group sports-betting traders set odds and monitor wagering action at the company’s London office. The Swedish company is setting up its US headquarters in Center City Philadelphia, where it will operate a similar trading floor from the Wanamaker Building.
Painters and carpenters were putting the finishing touches on the Kambi offices in Philadelphia during a recent visit, installing a vast array of flat-screen televisions so the employees can stay in touch with ongoing sporting events worldwide. Most of the new Philadelphia hires are spending the summer in Stockholm, learning the “Kambi Way.”
Bichsel and Richards say the Kambi Way is fundamentally different than traditional sports betting in Nevada, or through neighborhood bookmakers, who are focused on straightforward bets on winners and losers placed prior to the event.
They say the future of sports betting in the United States is on the internet — dynamic fast-paced betting, sometimes on individual performances that may be unrelated to the final outcome of the game. In Britain, 80 percent of online betting in tennis happens during a match, on individual points or sets. In New Jersey, already more than half the online betting for all sports is conducted in-game, said Bichsel.
Broadcasters are excited about in-game betting, because it keeps viewers engaged even when a one-sided contest is no longer very engaging to watch.
“The bet offerings we make, and the in-play offerings we typically do, are not things I’ve seen in the Vegas casinos,” said Richards, who worked for KPMG and Shell Oil before settling at Kambi.
In-game betting requires fast-twitch operators and risk managers, and very sophisticated computer systems that are processing wagers based upon instant data flows from sports events.
It sounds simple, but if a bettor following a basketball game places a wager on whether the next points scored in a game are a free throw or a two- or three-point shot, that bet needs to be graded and settled before the next play begins — typically one or two seconds.
The systems are coming into place to handle such bets, and experts say that kind of rapid-fire wagering is critical for attracting a younger generation that is coveted by marketers of all kinds. “Once one of our operators secures a customer, the rate at which our operators retain that customer is significantly higher than others in the market,” Bichsel said.
“Online betting is huge, it’s what the consumer wants,” he said. “The traditional Las Vegas model doesn’t make sense, if you have to be on the property and cash a ticket.”
Focused on the casual market
Though Kambi is a big player in the New Jersey and Pennsylvania markets, not everyone is a fan. Sports bettors complain on social media that some moneyline bets offered by Kambi operators have a higher “vig” — the amount the sportsbook keeps — than illegal offshore competitors, who don’t pay taxes or compliance costs of the regulated bookmakers.
A more frequent complaint is that Kambi operators seem to have tight limits on some events that restrict the amount a gambler can bet.
“I can’t tell you how widespread it is, but anecdotally I’ve seen the Kambi products do artificially throttle some bettors more than others,” said Dustin Gouker, the editor and analyst for a group of online gaming publications, including PlayPennsylvania.com and LegalSportsReport.com.
Bichsel acknowledges the online complaints, but says that limits and the vig are set by operators based upon how much comfort they have for risk. Kambi’s job is to stop taking bets on an event when the limit has been reached.
“The operators are in no sense of the word obligated to take a bet from anyone, … just because [bettors] show up and want to bet an amount,” said Bichsel.
Some of the complaints about limits and betting lines may subside as U.S. gaming operators gain more comfort and experience taking sports bets; unlike most forms of casino gambling or horse racing, where the house is guaranteed a percentage, a sports bet involves more potential exposure to losses for operators.
Orignally written by Andrew Maykuth, The Philadelphia Inquirer