Sarah Robertson: How Kambi Is Shaping the Future of iGaming & Sports Betting - NEXT.io Podcast

2027 could be the year where Texas regulates. You know, Texas and California are still pre-regulation in the US, and two huge states with huge opportunities, so obviously we're looking really, really keenly there. I think similar to Texas, California has really had some stop-starts with various bills going back and forth. I think there may be an opportunity that looks like they may be able to launch on property or a retail sports betting via the tribal operators.

I'm very well, Pier. Thank you so much for having me. I'm really excited to speak with you today.

Yeah, I think, yeah, I mean, you said it well. I think Kambi is at a really pivotal and exciting time in our journey. As you said, we are on kind of this transformational phase. I think we have a very long history of working in the turnkey space. Obviously, we're a very well-established brand there, working as a market leader for the past 15 years and empowering tier-one customers across the globe. What we have really focused on in the past several years in that turnkey journey is around differentiation. We understood even with the turnkey product that our customers and our partners definitely wanted to have a sportsbook that was flexible and malleable to be able to support the individual strategic goals of those organizations. So we did a lot of foundational work around making sure that the turnkey platform was really, really flexible and could be differentiated along the way. Across that journey, we identified that as the markets were shifting, we have a lot of maturation in Europe, we have a lot of consolidation happening in North America, we have lots of new opportunities happening in LatAm. We identified that we have this really great product, it's a turnkey product, but that only can kind of service a very specific type of operator. So we identified that we really wanted to be able to kind of diversify our product portfolio and kind of build foundationally on that turnkey sportsbook to be able to offer modular products. And that's kind of, you know, very nice to say, but it's a journey that you have to go on. There's a technical change, there's a fundamental change within the business to be able to support that technical change. So we started that journey a few years ago. I think we started talking about it to the market a few years ago around looking at our modular strategy. Along the way, we've had such good success on turnkey though that we wanted to make sure we're supporting that turnkey business as we go on this journey, because turnkey, as you can imagine, continues to be such an important piece of our portfolio, you know, the most important piece. So we wanted to make sure we're supporting our partners, supporting their growth, and supporting new partners in that space, but then kind of looking at, okay, what is the modular product portfolio and what can we offer to more operators. So all of the modular products that we built are based on the foundation of the turnkey sportsbook, which I think is a really nice space to be in because unlike other maybe modular suppliers in the space, although we're bringing new products to market, they're based on tried and tested technology and they're supported by the liquidity we have within the turnkey network. So I think it brings something very unique to the modular space. It brings our scale, it brings our kind of solid tech, it brings the solid people that are supporting that tech to the modular space. So I'm really excited about that transformation. Obviously, that comes with kind of, like I said, operational changes, but we, you know, over the past two years have done a lot of shifting. As you know, we launched kind of a multi-divisional organization now that's supporting these products. So our portfolio consists now of the turnkey sportsbook, the Kambi Sportsbook platform. We have an odds feed product, an MPS product, a frontend product, an esports product, and a bet builder product. So a really wide portfolio. A lot of that has happened, like I said, foundationally from turnkey, but also some via acquisitions. We acquired a company called Shape that supports our frontend business and acquired a company called Abios that is an esports specialist. So it's been a very exciting few years, and I'm really hopeful that the next few years we're going to really reap the benefit of a lot of the work that we've put into setting ourselves up for this.

Yeah, I would say it's not maybe a challenge in a negative sense. It's definitely been kind of an opportunity and it's been a shift, as I mentioned. It's a shift internally, but I think we've been very considered in our approach here. You know, we have, like I said, a vast experience in the turnkey space. We have a wide network of partners, so we really look to make sure that we were setting up in a way that's scalable and can offer support to those customers and be able to continue to deliver a high-quality service. Because one of the things that is foundational to the turnkey sportsbook, but also with our new expanded portfolio, is that we still want to be the home of premium service and premium products, right? So we needed to make sure that all of the shifts internally on how we set up really supported that. So I think we've done a lot of reorg around the business to make sure we can support that commercially, but also technically and operationally. I think from the commercial standpoint, I'm obviously new to the role in our chief commercial role. We're really making sure that we're building out very, very strong teams within our commercial function. We have our marketing, our account management, and our sales team that we're building out core competencies. Many of the people within those teams have had really long tenures at Kambi, so we're leveraging a lot of experience from the turnkey space to those modular products, which I think is really important. I think also as we know, we have a new leader who's come in as our new CEO. He's come from Sportradar and has a big, vast amount of experience with modular products, so that's really helped us with getting up to speed and bringing new ideas to how we look at the business internally. So I think that's been a really, the timing of that has been really great on this journey to have him come in this summer and really help us kind of drive forward. So I think not necessarily a challenge, but definitely a fundamental shift and something that we are going to continue to build upon.

Yeah, so as I mentioned, we built off the foundational turnkey. So the turnkey sportsbook is still kind of a very important, our most important product in our portfolio. And I don't want our turnkey customers or potential turnkey customers to think, okay, Kambi is looking at modular, they're not thinking about the turnkey. It remains our most important function, it remains our largest function, and we have a huge amount of roadmap development and new exciting features and new capabilities that are coming kind of this year and ongoing. So I think we have a really solid product there and we'll continue to develop. But now in addition to that, we have our Odds Feed Plus product which we brought to market this year. We've recently launched with several operators with that product, so we're really pleased with the kind of developments we're making there. And again, as I mentioned, it's all built on our existing technology. The APIs have been built out on the API that can be used internally and that our customers use for turnkey, so very tried and tested and also fundamentally built on that liquidity that we have from the turnkey product. We also have a managed trading service, we have bet builder, esports, frontend as I mentioned, supported by Shape, and we're looking at sportsbook platform only. So really kind of a slice of how we deliver the turnkey sportsbook for maybe those types of operators who want to have some more trading control in-house. So a large portfolio. I think a big focus for us this year will be on the Odds Feed Plus product. We have brought that to market and have had really good feedback thus far from large operators that are looking to expand their portfolio of odds feed suppliers that they take. And I think we have a big strength there because of the foundations that we have in turnkey.

Yeah, I think that's a great question. I think it can be, we kind of fundamentally believe that no, the role of the trader is not gone. Has the role of the trader changed? Yes. And I think we identified, you know, a few years ago, that fundamentally kind of the way that consumers are engaging with a sportsbook is changing, right? They want total flexibility, they want infinite combinations, they want a plethora of bet offers that probably, you know, as that continues to scale, becomes very difficult to support in the way that, you know, historical sportsbooks would have set up with large-scale trading teams who are doing things manually. It's just not a scalable model to be able to support that type of fundamental shift in consumer behavior and how they interact with the sportsbook. So we identified that early on. I think, you know, looking at the data, looking at what the data was telling us across our network of transactional data, we could identify that shift moving away kind of from not necessarily just betting on the 1x2 and the main markets, looking at, you know, those player-specific markets, making sure that those are all combinable. So with that, we made the kind of a strategic decision to heavily invest in AI in our trading organization. We knew we didn't want to get left behind in this space and we identified that we wanted to invest internally rather than maybe leveraging third-party tech in the space. And I think that we had a lot of really solid talent internally at Kambi and we wanted to kind of look at trying to build something ourselves. So we did that investment. We've created a company that we've incubated called Tesseract that has built an AI-powered new trading platform. We launched that across all of our pre-match soccer and we're really reaping the benefits of that now. That will continue to roll across all sports, but we're looking at soccer as the first, obviously it's a very important slice of our offering, and we're really reaping the benefits of that now in that we are really almost beating the kind of manual trader with this new multi-sport model. And really the shift is that, you know, historically we had kind of traders being assisted by models, and now we have models being assisted by traders. We're really lucky at Kambi that we have a really large-scale trading organization that's composed of, you know, really, really senior and talented traders that are experts in their field. So, you know, we'll have these models generating pricing but traders overseeing that. So we really still believe in that combination of human oversight of the technology. So I think we've made really good advancements in the AI space and will continue to invest heavily. Our roadmap is really being kind of driven forward by this shift to Tesseract and to this new platform. So we have big plans for the year and I think the benefit of that is our operators across the odds feed product, across the turnkey products, will be able to have a highly competitive offering. We'll be able to have an offering that has maximum combinability and also have really, really strong kind of unique markets. So, you know, shots on target, player-specific markets, things like that, that are where we want to definitely be a leader in that space.

I think one of the benefits of Kambi and our model is that we run a global roadmap, right? So we work really collectively with our tier-one partners and we have a very diverse portfolio of tier-one partners who all have unique requirements and unique needs that help us drive that global roadmap. So I think that's kind of a nice USP to Kambi, maybe the other suppliers that have, you know, smaller portfolios of customers or maybe only one or two customers. We have, you know, 45-plus customers, many of those are market leaders within their respective markets and they each have unique things that are important to them. But because we run this global roadmap, when we build out something that's unique for one of our partners, that's one of our large partners in the US, all of the European and LatAm partners get to benefit from that, right? So I think that ensures that we have a very well-rounded roadmap of what we're focused on. And typically when we speak to our partners, Kambi and our partners are very much aligned in what we want to be doing. You know, we know that in many markets across North America but also in Europe, we have enhanced regulation coming in, we have tightening across advertising and, you know, capabilities are being, advertising and bonusing, etc., those are being tightened, right? What you can do there. So it means that the product becomes very important and the capabilities of the product become very important. So I think fundamentally Kambi's always really done a good job at that because we're always looking at making sure that we have a super strong offering that's engaging and sticky and has all of the kind of right ingredients for bringing customers back and keeping them on the sportsbook. But also we've done a lot in the past year and we'll continue into 2025, a lot of focus around our engagement features, so our bonusing toolset, our backend tooling, so that we're giving more differentiation to our customers. So that remains a big focus for us as we move into 2025. So I feel like our operator partners are happy with the direction that we're going and we will continue to work collaboratively with them to make sure that we're driving that forward.

Yeah, I think that's a great question. So I think as you mentioned, Kambi in our strategy has always kind of put a lot of focus in being very, very agile and being able to enter new markets at speed. But how we facilitate that is, you know, making sure that we have a scalable technology that has fundamentals around regulation built into the underlying tech so that we can adhere to different regulations and be able to get set up and running with our partners quickly. Because when markets open or when markets re-regulate, we know it's important that it's a bit of an arms race to get in first to ensure you're launching on day one. So you need the technology to support that, which we have, but you also need the organization to support that. You know, we were looking like many others at Brazil well in advance of last year, making sure that we had a localized product, making sure that we had the right operational support, the language support, a very, very localized product to a very, very low level across all the important Brazilian leagues and making sure that that coverage was built up to be, you know, very, very strong. And again, the capabilities that we have now with the AI trading helps us to scale very quickly there, so that's great. So we do fundamentally believe that Brazil is obviously a very big market, as you mentioned, and there's a lot of growth opportunities there. When a market moves from pre-regulated to regulated with a different framework, there always tends to be a shift of operators moving to new suppliers or operators moving into the space because regulated markets come with enhanced challenges, right? You need to have a really strong competitive product, but you need to have a compliant product. So many operators that were, you know, maybe working in Brazil previously are looking to their tech stack and saying, okay, I actually don't have something that's built for these requirements. So that's definitely a huge opportunity for Kambi. You know, we're really strong in that space, so we will continue to have a big focus on Brazil, obviously leveraging off the success that we've had so far. You mentioned KTO and Stake, two new partner signings. We went live with those partners on day one to support their launches, so that was January 1. We also signed with RDP, obviously a large local DFS player there, and launched with them with our Odds Feed Plus product. So again, great testament to the expanded portfolio. And we're also supporting our current partners, so supporting MGM in this space, or LeoVegas MGM in the space as well. So we've got really good foundations, we've got, you know, some market leaders there. We're working very closely with our partners and we have a core focus to continue to look at driving our growth with new partners in that space, but also, you know, driving growth for those partners that are there, making sure that we're facilitating a strong product so that they can capture market share.

Yeah, I mean, it's hard to kind of pinpoint what's going to happen anywhere, right? But yeah, I can talk a little bit about where we're definitely looking and continuing to keep a close eye on. I think in the US, which the US continues to be a very core focus for Kambi, we're seeing some progress in Texas, so looking at what may happen there. There has been, I believe, kind of some progress that maybe 2027 could be the year where Texas regulates. You know, Texas and California are still pre-regulation in the US and two huge states with huge opportunities, so obviously we're looking really, really keenly there. I think similar to Texas, California has really had some stop-starts with various bills going back and forth. I think there may be an opportunity that looks like they may be able to launch on property or a retail sports betting via the tribal operators there. Obviously, Kambi has been working in the US since PASPA, as you mentioned. We launched, you know, in New Jersey on day one, so we've facilitated really long-standing strong relationships with many of the tribal operators across the US. As you know, within our existing portfolio, we work with many tribes across both retail and online. So that's been a core focus on how we're looking at the US is supporting tribal operators. So I think we will be ready and well positioned for both Texas and California should they come in the next year or two. I think in addition to that and probably further down the line is, you know, we're keenly looking at Asia and how that may regulate. Looking at Japan, there was some kind of discussions around Japan late last year, you know, that's kind of died out. But again, I think what we typically try to do at Kambi is making sure that even as regulation discussions start and stop, we are trying to look at business development and understand the lay of the land and how this may look if regulation does come, making sure that we're building out our understanding of what the product requirements would be. Because if there is fundamental things that we need to look at building out, we need to have a long lead time to make sure that we can, you know, have really strong competitive and localized products there. So I think Asia is definitely one we're looking at and Japan. But I would say one of the benefits of our shift to the modular strategy is that we're not just looking at market regulation for growth. We now have the ability to build out the revenue from a diversified product portfolio in markets that maybe would have otherwise been saturated for the turnkey sportsbook. Now we have these other products, so that allows us to grow revenues within the current regulated framework that we work in as well. So I think that's really kind of one of the fundamental things when we were looking at that portfolio is, you know, making sure that we could facilitate growth if regulation does slow down in areas. So that's going to be one of the key benefits of the Odds Feed Plus product. We can bring that to more customers in North America, we can bring that to more customers in LatAm, etc.

Exactly. So this is part of the holy grail in the US, of course, with the big four states in the US with New York, Florida, Texas, and California. Today only New York is live, Florida is live but it's a monopoly, and then Texas and California are the big prizes then for the future of the industry.

Yeah, I think so. We have a really strong foundation, as you mentioned. We have 1,200 employees. I mean, a large portion of those are working on the product, right? So I think we have scale that maybe many other suppliers in the space don't have, which gives us a competitive edge to be able to continue to drive innovation. You know, when you have 700-plus people working on your product, you can drive innovation more quickly maybe than other suppliers in the space. I think when we think about how do we stay ahead of competition or how do we look to the future, I mean, one of the big things that kind of underpins how we think about it is, as I mentioned at the top of the discussion, is we want to be the home of premium sports betting solutions, right? So and all of the new products that we've built out are based on that turnkey foundation that we've invested so heavily in over the past 15 years. So yes, it's very competitive and we see lots of kind of many new niche suppliers coming in, but where we think we have a competitive edge is the experience that we have, the scale that we have, the liquidity, you know, we have the 20 billion plus liquidity that we have and that, you know, that informs everything that we do. That informs our pricing, that informs our player profiling and risk management capabilities. It also informs us on kind of the direction that the sportsbook is headed in. As I mentioned when we were talking about Tesseract, we identified that shift in consumer behavior really early by looking at the customers that we have engaging with our sportsbook and saying, look, you know, we used to only ever see, you know, 1x2 as being the most popular market on the sportsbook. Now we're seeing shots on target as number two in popularity. That's a big shift, right? So making sure that we're analyzing and leveraging the assets that we have that maybe others don't, I think gives us a great competitive edge. And making sure now with our new divisional structure that we're kind of harnessing that, right? So now we have these divisions that are focused on their core outputs, meaning they can incubate and move quickly forward with innovation rather than being, you know, one monolithic organization. So I think that we've set up organizationally to support fast innovation and good growth. And we've got several assets that underpin that that maybe other suppliers in the space don't. So this year we have a really robust roadmap, as I mentioned, and that's when we're building things, that's kind of supporting the turnkey but all the modular products. Like when we build new backend capabilities or new tooling, those are tooling that's going to be available to odds feed customers and turnkey customers. So we're building in a smart way to be able to leverage what we're building across the portfolio.

Yeah, I think, I mean, hopefully we'll have Texas and California live, that would be great. But I think what we want to continue to do over the next few years is make sure that Kambi is powering tier-one market leaders, right? And that's across our product portfolio because we want to be the home, as I mentioned, of the premium sportsbook service or premium sportsbook solutions that can address kind of the individual needs of different tier-one operators. So that is making sure that we are building the brand that is quite strong in the turnkey space across the modular space. So we have lots of work to do to, you know, build out new partnerships, making sure that people understand the value proposition that we're bringing to the modular space. So, you know, big focus on the sales and marketing functions within Kambi, driving that messaging forward. We also will have significantly expanded our AI capabilities, I think, across the next three years. As I mentioned, that's a core focus of the business. So really with that, specifically around the product, right? Really harnessing the investment that we made in Tesseract to be able to drive out our sportsbook offering and the sportsbook flexibility within that offering while still delivering healthy margins for our partners. Obviously, that's incredibly important. And I think what I would really hope as Chief Commercial at Kambi is that we're still supporting our current customers. We have obviously a portfolio of customers that are very important to us and we always like to try to maintain long-term partnerships. So I want to continue to see, you know, strong growth within our existing customer or operator partners so that we're helping them continue to be market leaders, continue to drive expansion for them, and continue to, you know, capture more market share.

Yeah, thank you so much. Thank you.