There have been quite a few interesting new companies to appear on the United States sports betting scene over the past year but none have made the splash of Stockholm based Kambi. Kambi might not have the name recognition of other players within the industry but that’s likely fine by them. They provide ‘B to B’ sports betting services focusing on technology, risk management, user interface design, odds/trading, etc. In other words, their work is primarily done ‘under the hood’.
Over the past few weeks they’ve made strides to secure and grow their revenue base in the United States. The most recent–and most significant–came earlier this week when they announced that they’ve signed a contract extension with DraftKings that served not only to lock up their New Jersey revenues but expand their presence into eight new states. The new states include Colorado and Iowa which could rank among the most significant US jurisdictions within the next couple of years.
Kristian Nylén, Kambi Chief Executive Officer, hopes that the partnership continues to grow:
“Over the course of the past 12 months, Kambi and DraftKings have developed a symbiotic relationship, working closely together to deliver a high-quality sportsbook, which has only improved over time.”
“I’m delighted the extension of our relationship through this new agreement will enable players in other states to enjoy the same exciting sports betting experiences that have helped DraftKings become a market leader in New Jersey.”
DraftKings CEO Jason Robins said that Kambi’s back end technology has been crucial to his company’s success:
“Kambi has been a key partner for DraftKings, providing us with backend sportsbook technology that has enabled to us to offer our customers an engaging product in a highly competitive market.”
Another big announcement came in late July when Kambi announced a partnership that will see them powering sports betting in Penn National’s brick and mortar casinos.
Jon Kaplowitz, Penn National’s SVP of Interactive, likes what he sees with Kambi:
“Sports betting represents an exciting growth opportunity for Penn National. By controlling our front-end product and leveraging our vast casino footprint, our Company is well-positioned to execute on a sports betting strategy that maximizes value to shareholders. Utilizing Kambi’s best-in-class managed-trading services and omni-channel software allows us to effectively capitalize on this strategy.”
Kambi (STO:KAMBI) is listed on the First North platform in the NASDAQ Stockholm exchange and their share prices have been on a roller coaster ride over the past few years. Shares are down 20% in the past quarter but over the longer term the company has experienced astounding growth as in 169% growth in the past five years. The price of Kambi shares experienced a nice bump immediately after the announcement of the DraftKings extension rising to SEK166.90 but has since leveled off to the current price of SEK159.90.
There’s plenty of debate in financial circles about whether Kambi’s long term share price jump is justified and over their prospects going forward. The gaming industry worldwide is extremely competitive and that includes the backend technology component as much as at the retail level (if not more so). That being said, Kambi does good work and have been exceptional in customizing their offerings to the needs of individual companies and properties. It also can’t be under-emphasized that the big gaming companies in the US and Europe have all had a positive experience working with them.