iGB@ICE: Werner Becher on the first six months of his Kambi tenure

Yeah, so Kambi was founded 14 years ago by Anders Ström and Krister Nillson, two industry legends of the betting and gaming industry, and of course it's an honor having been selected by two legends as the new Kambi CEO. Krister Nillson, the former CEO for 14 years, stepped down and is now thankfully a nonexecutive board member of Kambi, and he was very supportive getting me up to speed in my first few weeks. And it's of course great to have him still around as a board member. The betting industry is very busy, so there was no time for a cozy start. I moved from Vienna to London, and we tried to get me up to speed as fast as possible. We already signed a few new customers in the last few months, for example Stake, KTO, or Hard Rock. But my focus was on the strategy of the company in my first few months. As you already mentioned, we're not a turnkey-only company anymore. Now from now on we are the home of premium sports betting solutions, so we offer also odds feed and a lot of other products and services to customers. This was very important. I made some changes in the management team, and we launched on the 1st of January on time in Brazil.

Yeah, so I think Kambi is well known as being the global leader when it comes to turnkey sports betting. We want to change this perception in the market a little bit going forward. Our turnkey solution will definitely be our key product, but for further growth, the addressable market for turnkey is restricted. We have all these great products internally. Our clear goal is now to open up our technology and to offer odds feed, managed trading services, all bet builder products also to companies who have an in-house sportsbook and would never take our turnkey solution. We think we have a great product to increase our addressable market and offer these products to other companies to accelerate our growth. And I think it's very important to understand that Kambi, when it comes to sportsbook, we manage the third biggest sportsbook on this planet. Only FanDuel and Bet365 have more liquidity than we have. So we are on a power level with DraftKings as number three globally, with big liquidity, about 17 billion euros of betting turnover on a yearly base. And of course, looking forward to AI now, we've invested heavily in AI for more than three years now. Big data, liquidity is everything, so only a few companies will really be able to leverage AI having enough liquidity, enough data to become pricing leaders, market leaders. Our odds feed products but also our turnkey customers will benefit a lot from the big liquidity we have.

Yeah, definitely. We're the leading turnkey sportsbook supplier and we will stay there. But in addition to offer only turnkey, which is more or less a binary business, either a company takes your sportsbook and outsources everything to you when it comes to pricing, trading, or they decide to have their sportsbook in-house or use other third parties. It was very binary for us. Now with our premium odds feed service, which we call Odds Feed Plus, we can offer services to in-house sportsbooks. And we call it Odds Feed Plus because it's not a normal standard odds feed. Our odds feed is fully traded on our big liquidity, which means our odds are constantly sharpened and ours are much faster, the margin is much higher than standard odds feed can offer. This is why we want to change our perception a little bit now so that customers not only think about outsourcing, but even big ones think about better odds, shorter live delays, more uptime for some. If it's longtail, if it's premium sports, we have a very flexible solution. With one single API integration we can offer our products. I think our products are more important now for even the big ones than they have been only for turnkey in the past.

Yeah, so we are a publicly listed company. To simply administrate the status quo is not good enough, yeah. So we have to fire and start a new growth phase, of course, and we have to continue to grow. Diversity of our customer base is very important. We have 40 plus customers today and we want to increase this customer base by about 10 per year. Kambi is a premium supplier, so we do not offer mass market products with low quality. Our goal is definitely not to have hundreds of customers in a few years because we will fully focus on a premium product, a high quality product out there. But with turnkey, with new markets like South America, Brazil now, but also Africa and Asia coming up, with California and Texas soon to be regulated also in the US, we see for turnkey a lot of growth potential. But also with our new modular products we see a lot of potential for additional growth, offering these specific services to more customers now.

Yeah, so I don't know a lot of businesses without any churn, so I think also at Kambi we have to accept some churn. Yes, we lost some customers. They made strategic decisions to insource technology. I think it was a nice investor story for them if it's for their investors also a good financial and commercial case. I don't know, and I do not want to comment on it. But looking to the betting market and the evolution of the betting market, I think that to have everything in-house is not state of the art anymore. Even Flutter Group and Bet365 start to partly outsource some of their services today, where also our modular strategy now comes in. So this 'not invented here' syndrome, we do everything in-house, I think it's very, very outdated and will not work anymore going forward. So diversification of the customer structure, but also some churn we have to accept, although we are very unhappy about each and any customer leaving us.

Yeah, so again, we do not offer any mass market product. So not all of the 1,100 betting companies out there will probably become our customers. We focus on the top 150 to 200 customers, which are either one of the leading companies in the industry today or want to become one of the leading companies. These are customers who have a high demand for quality of their product, companies who think they have to compete against the Flutters and the Bet365s, and they need a high quality product which is good enough to go into this competition. So these are our customers.

Yeah, so Kambi were the first accepting a bet in New Jersey when PASPA passed. The European market opened up, we were already in life. Also on the first day when the Brazilian market opened up, with B MGM, with Stake, with KTO, with Re Debacco, we already have some very promising customers today in the Brazilian market, and looking forward we will sign some more there. So it's not only Brazil, I think in general the South American market is a boom area for the whole industry now. But we should be careful about expecting too much too quickly from Brazil. I think it's a high ultra competitive market, and a product like ours, a premium product, is the only option you have there to compete against the market leaders. But going from a gray market to a regulated market is always tough, and especially in Brazil, KYC registration process is very complicated for the customer. So it will take some while. It's also off-season at the moment in Brazil, everyone is on some vacations there. So it will take some time that the market really can embrace its full potential.

Yeah, so I think there are more and more countries now following the positive example of Brazil. Mexico, Peru, Ecuador, more and more countries also in South America are now on a trip to regulate their business, which is good for the whole industry. The business gets licensed, gets regulated. But I think all learning from South America is also that coming from the US in the last few years where we all have seen a big gold rush, that you have to localize your product, you have to localize your offer. You can't simply plug and play products from other regions to South America. The demands of the customers are very different. You have to focus on the local leagues and offering, be really focused on what the customers need.

Yeah, so I think the US regulation is very different to what we see in Brazil and South America in general. I would say Brazilian regulation and what our customers see there is more similar to what we've seen in Europe or in Ontario, for example. In the US, there was no gray market before, there was only a black market, and the black market operators got no license. So everyone had to start from a blank sheet. Only FanDuel and DraftKings had a user base they could convert. All the others had to start from zero. In Brazil, we have a lot of operators who have been there for years now, who have a customer base which they can transition now into regulated customers, which is much easier than starting from absolutely zero with your brand recognition and also with an empty user database. For us, the US is very important, but at the moment I think the whole crowd moved a little bit from the US gold rush now to a South American gold rush, and most probably the Asian gold rush in three to five years from now will be the next big thing in our industry.

First of all, I think step back with the US before we go to Asia. Also the US gold rush from our perspective is not over. Yes, it's over for a lot of European operators, but for us it's still 50% of our revenues coming from the US, and with California, Oklahoma, Texas to be regulated, there's much more for us to come. And now also with our modular services, we will not only work with our customers in the US we have today on turnkey going forward, but also with others. For us, there's a lot more potential for continued growth. Asia, I think, again will be the next big thing in our industry. There was the regulation in Europe, now there was the US gold rush, now everyone is in South America. Everyone now is already looking to Japan, India, Thailand, some other jurisdictions in Asia. Everyone tries to get their foot on the ground already now to be best positioned. Probably Africa is also a sleeping giant. Some are there already, but most of the European big operators, US operators are still not there. So there's a lot more potential for regulation coming up, and to regulate, to license in our business. And as you know, Kambi is very strong in regulated markets, so for us there is a big untapped addressable market going forward the next 5 to 10 years.

Thank you for having me. Thanks so much.