Much ink has been spilled about DraftKings and its changing relationship with chief technology partner Kambi.
That includes Kambi CEO Kristian Nylén publicly calling the SBTech acquisition a “mistake” for DraftKings. Of course, DraftKings and Kambi are still working together on a daily basis for now.
So how are relations behind the scenes? Legal Sports Report caught up with Kambi chief commercial officer Max Meltzer at ICE last month to find out.
LSR: How’s the relationship with DraftKings? There’s been a little bit of sparring in the press following the SBTech deal.
Meltzer: The relationship is as strong as it’s ever been, even though that sounds weird from the outside. Behind closed doors it’s really good. Kristian [Nylén] was with their exec team just recently.
In truth, DraftKings were as transparent as they could be given the confidential nature of the discussions. We’re still their partner and still going to generate a lot of revenues for each other.
LSR: We’ve seen companies like Betsson look to establish themselves as a B2B sportsbook supplier. Do you see newcomers like this as a threat to your US business?
Meltzer: I’d be surprised if there were established European players entering the US that we’d see as a threat. There’s so much that’s gone into where we are now, just from a regulatory and tech scalability perspective. For other people to get there, it’s going to be so tough.
What’s more of a threat is genuine innovation in things like data and quants, little niche areas that are potentially more threatening. But also, the companies doing those things are opportunities for Kambi.
LSR: As potential acquisition targets, you mean?
Meltzer: We’re looking strategically as a business how can we advance our position. And it’s those little things like data, algorithms and modeling that are focal points.
But that won’t be European companies coming to the US. That will be native organizations and specialists who possibly want to work with Kambi to improve our chances of succeeding.
LSR: Can you share any specific products or companies (Kambi) might be looking at?
Meltzer: We’re looking at ways to enhance the customer experience. There’s nothing specific I would give, but there are areas we are looking to improve across the board. The areas you would expect.
LSR: Player props seem like an area of potential growth, given the history of DFS in the US.
Meltzer: Individuals are becoming more important than teams. That’s a betting trend and a societal trend, so props is something everyone would be looking at improving.
LSR: We hear in-play trading is one of the sticking points in the US sports betting market at the minute. Is that a focus for Kambi?
Meltzer: That’s a whole industry question, not just a Kambi question. We’ve probably had the best head-start of any B2B supplier because we’ve invested heavily in data analytics and our quant teams. But yes, people are realizing the NFL is very complex to model.
LSR: The most common area of criticism against Kambi, on social media at least, is the low limits. How would you respond to that?
Meltzer: Every partner sets their own strategy. People misunderstand the process. We don’t just say ‘these are the limits.’
The partner tells us their appetite for risk and it’s adjusted from there. I can’t apologize to a player who can get on with one of our partners but not another.
