How Kambi Plans To Profit From ‘Weakened’ SBTech After DraftKings Deal

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Kambi is aiming to profit from “weakened” competition following the acquisition of rival sportsbook supplier SBTech, according to CEO Kristian Nylén.

In an interview with iGaming Business, Nylén characterized DraftKings’ choice to abandon their partnership as a “mistake.”

“Of course, I’m disappointed,” Nylén said. “Disappointed because I couldn’t convince them that they are making a mistake, as I still firmly believe DraftKings would be best served staying with Kambi as a supplier.”

Kambi cautions DraftKings on perils

Nylén said his company had the first-hand experience of the issues that stem from being owned by an operator. Kambi was part of Unibet until 2014 when it was split out as a separate company.

“It became easier to gain that high level of trust required to be a true partner,” Nylén said.

Suppliers, of course, have access to sensitive data from their operator partners. SBTech’s acquisition by DraftKings could cause its current partners to re-evaluate their relationships.

“Being an independent company creates a much better focus and makes you able to make decisions that are good for your whole partner network … rather than the operator that owns you,” Nylén said.

DraftKings, however, has previously suggested Kambi is not completely free from its Unibet roots. CEO Jason Robins said this month, the Kambi roadmap was driven by Kindred, to the detriment of other partners.

The firm has also argued the combination will help SBTech improve its US-facing product.

DraftKings deal synergies overstated?

Nylén also played down recent comments from DraftKings CEO Jason Robins, who said the company would save more than $100 million in platform costs through the acquisition.

Nylén said the DraftKings-Kambi platform deal was done on a revenue-share basis, which could have been renegotiated as revenues rose.

“DraftKings risks losing revenue by swapping to a service that may not have the same revenue-driving quality,” he added.

Kambi’s relationship will continue for now

Despite the comments from both sides, Kambi will remain as DraftKings’ platform provider until at least December 2020.

The provider has played down the impact of losing its largest US customer, pointing to the deals with clients like Rush Street and Penn National Gaming, and a nearly 60% market share in Pennsylvania sports betting.

Rest assured, however, the Swedish firm will be looking for new partners to offset the DraftKings loss. SBTech’s current US partners likely will be getting a call.