An increased mix of parlays and overall higher hold helped Kambi quarterly revenue jump 24% in the second quarter.
Kambi’s sports betting partners reported a blended 9.9% operator gross revenue hold for the quarter, which CEO Kristian Nylén said dampened overall handle growth to 4% on the Q2 2023 earnings call.
That hold is up from 8.6% last year and above the 12-month rolling average of 8.8%. Favorable basketball and soccer results also contributed to the growth.
The B2B sportsbook platform supplier’s stock rose 2.37% Wednesday in Stockholm on nearly 3.5 times average volume.
Kambi bullish on Bally’s partnership
Bally’s is the kind of high-level operator Kambi has wanted to get back on its books, Nylén said.
Bally’s has sports betting market access in 18 states, which Nylén thinks can make it a “major player in the US.” He also sees an opportunity to operate with Bally’s in Europe, Asia and possibly Latin America.
Bally’s pulled down its Bally Bet sportsbook in June in order to relaunch on Kambi’s tech. Nylén expects “quite a fast rollout during the autumn” of retail and online sportsbooks, with an industry source telling LSR the first launch should be Ohio in August.
An analyst on the call noted Bally’s Japanese brand Yuugado, acquired when the company bought Gamesys in 2021, recently launched sports betting. Nylén said he is “pretty sure” Kambi will take over powering Yuugado at some point, though he did not provide a tentative launch date.
Will more ditch own tech for Kambi?
Bally’s spent a substantial amount trying to get its proprietary platform right before deciding to move forward with third-party tech from Kambi.
Nylén would like to see that trend continue:
“I surely hope so. I think there are definitely more operators out there that are working on a technology that is very likely to not be giving them the best chance to win market shares and also not being very cost efficient for them.”
AI pricing to become own division
Kambi is breaking out its AI-powered trading services to operate under its own division, Nylén said.
The move will allow the group to work quicker and create the best possible product, he said. The soccer product is already “fantastic,” he noted, with the sport serving as the largest revenue driver for the quarter.
Kambi’s pre-match soccer product is now predominantly driven by its AI capability. The product is advanced compared to others, the company said, and recent sportsbook purchases of companies like Banach and Angstrom show growing demand for innovative products, Kambi said in its earnings release.
Improved AI pricing led to a 50% increase in markets, a 75% increase in Bet Builder markets, and a 100% increase in player props.
Final Barstool mobile bets taken
Kambi’s final mobile bets through its partnership with PENN Entertainment‘s Barstool Sportsbook were taken on July 9. The early end to the contract means Kambi will see $15 million in exit fees paid in five quarterly installments.
Barstool moved onto the proprietary technology that runs theScore Bet in Ontario. Kambi will continue to provide services to the in-person Barstool Sportsbook locations.
Barstool market share fell over the past year, with Penn acknowledging the product “isn’t as competitive” as others in the US on its fourth-quarter earnings call. Kambi attributed that dip to not keeping pace with others “after it decided not to adopt certain product improvements made to the Kambi sportsbook.”
