Kambi's European business holding steadier
Legal Sports Report

The Reason US Sportsbooks Are Being Hit Hardest By Coronavirus

Kambi

US sportsbooks have seen a steeper drop-off because of coronavirus-related shutdowns than their European counterparts, according to Swedish provider Kambi.

In the last three weeks of Q1, Kambi’s European operators generated revenues at around 40% of their prior levels.

Meanwhile, US operator revenues were running closer to 20% of previous levels.

Why are Kambi’s US books affected more?

Part of the difference is because US sports stopped a week or so earlier than their European counterparts. But even on an ongoing basis, remaining sports like table tennis and Belarusian soccer are scheduled more favorably for European bettors.

In addition, Kambi also has a much stronger retail presence in the US than in Europe thanks to partnerships with DraftKings, Rush Street and Parx. These revenues, of course, have disappeared completely.

However, the company still performed better than market expectations, in part thanks to those smaller sports.

Table tennis accounted for a third of all turnover from mid-March onward, Kambi said. For the entire quarter, group revenues were up 33% to $24 million.

Kambi: Shutdowns reminder of outsourcing benefit

Looking ahead, the Stockholm-listed firm predicted that the coronavirus shutdowns might serve to remind partners of its utility.

“Kambi believes the current challenging period of fewer sports will serve as a reminder of the benefits of outsourcing,” the firm’s Q1 report said. “The costs associated with running, maintaining and continuously developing a high-quality sportsbook … continue to rise and are only sustainable for the few companies that possess sufficient scale.”

The company said it’s also expecting an acceleration of online US sports betting legalization.

Sports betting in Tennessee gets a mention

Elsewhere, Kambi took a paragraph to swipe at Tennessee sports betting. The operated noted the 10% hold requirement would “reduce market potential.”

The provider also gave a brief nod to the DraftKings-SBTech deal, which closed Thursday.

Kambi will continue to serve DraftKings as per the terms of its contract with the technology and services that has enabled the operator to take a leading position in multiple US states.

It’s not yet determined exactly when that contract will expire and DK will be migrated to SBTech.

Kindred shows green shoots in NJ and PA

Kambi sister entity Kindred also reported its Q1 financials today. The company noted strong growth in its US business under the Unibet brand.

Kindred US revenue amounted to $3.2 million for the quarter, an increase of 53% from Q4 of 2019, despite the impact of COVID-19.

However, the firm posted an EBITDA loss for the quarter of $5.2 million. Nearly three-quarters of that was spent on marketing.

For the first 19 days of April, Kindred said daily revenues were up 84% compared to the full first quarter. The uptick was presumably driven by casino growth, with Unibet products live in Pennsylvania and New Jersey.

Brad Allen
- Brad has been covering the online gambling industry in Europe and the US for more than four years, most recently as the news editor at EGR Global.
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