Kambi launches its second annual Tribal Sports Betting Report, featuring exclusive data insights from Kambi’s tribal sports betting network
Read More While operators continue to spend vast sums on marketing at the cost of profit, the time will come when they will be judged on the quality of their sportsbook rather than the frequency of their price boosts, writes James Letchford, Director of Pre-Sales Solutions at Kambi.
“The most complex piece of enterprise and end-user software imaginable.”
That is how a Kambi architect described building and operating a sports betting platform, with intricacies in processes, offering and regulation making it “more complex than Netflix or Spotify”.
The factors which account for this are as varied as they are numerous.
In simple terms, the intricacies and technical strength that come with building a sportsbook capable of leading the market are vast. Offering a deep array of markets with high combinability across pre-match and in-play to end users is of paramount importance, but there are many other areas a high-performance sportsbook must get right.
Managing heavy load with spikes in volume is no mean feat, while smoothly handling bet settlement across millions of wagers, ensuring regulatory compliance and providing 24/7/365 stability offer all sorts of potential complications to technical teams.
Dealing with these challenges requires a supply chain capable of delivering on all levels, beginning with the integration of official data partners and proven algorithms that process the data, followed by excellence in trading and risk, which must all be supplied through a fast and intuitive frontend. Only when these elements are working in perfect harmony can an operator begin to deliver a best-in-class service.
With all of that said, delivering a seamless experience and excellent market availability to millions of users across multiple regulated partners is no easy task, which is why so many fall short of the required standards.
Meeting the challenges of the US market
There has never been as big a green field opportunity for the sports betting sector than the one that exists today in the United States. Jurisdictions comparable in size to an entire European country are emerging overnight, and operators are defining their strategies as they jockey for position.
Taking the sportsbook operation in-house is a strategic approach that has been the subject of great debate recently, and some operators have opted pursue this strategy. Being able to point to having ‘full control’ of your tech stack and flexibility over your product roadmap can understandably hold appeal, particularly for investors and a company’s equity story.
However, operating a best-in-class, high-performance sportsbook at scale is a huge challenge on a structural and technical level, to say nothing of the need to develop new product innovations and the latest functionality players expect.
Building a feature which offers the extensive possibilities of, for example, Kambi’s new Game Parlay product, is far from simple, requiring significant expertise and resources to devote to development, testing and successfully launch across multiple states at once.
Having the sportsbook platform in house is perfectly sound in theory, but what does ‘vertical integration’ actually look like? If that sportsbook is simply populated by third-party price feeds, with outsourced products such as game parlay and instant betting functionality bolted on, the operator runs the risk of being left with a disjointed offering that is of lower quality and unlikely to convince customers to return.
Put simply, although extensive marketing spend can paper over the cracks of an average sportsbook, in time that cash will run dry and we expect the winners and losers in the US market will be decided on quality of product, where the battle for not only acquisition, but long-term retention will be fought.
Marketing will, of course, remain an important tool, and a crucial focus area for operators. However, those that succeed long-term will be those that have a high-performance sportsbook that is able to retain customers and reduces the need for expensive reactivation efforts.
The extensive challenges of offering a high-quality sportsbook are something Kambi, as an organisation of nearly 1,000, works to overcome each and every day. It’s a key reason why we remain 100% focused on the sports betting vertical, and why our partners have the product they need to win in the US market.
Originally published on SBC Americas
