Artificial Intelligence is the next major growth driver in the betting space according to Kambi’s CEO Krisitan Nylen following the group’s Q3 earnings presentation, and is an area the company intends to take strides in.
As well as announcing its achievement of significant financial targets, such as a 15% increase in revenue to €42m, Kambi today revealed a new name for its AI-backed trading platform, Tzeract, which Nylen outlined has already had a substantial impact on its performance this year.
Driving possibilities in betting
“I think if you look at the gaming industry, it has always been outside technology that has been driving the industry forward,” Nylen shared with SBC. “First, online, mobile and so on, now I think AI is a massive driver of what is possible in the field of sports betting.”
In praising the emerging tech’s relevance in the industry, Nylen outlined two factors driving this momentum. First, the increasing depth and quality of sports data available to the sector and used to create new markets.
Second, there is a general consumer trend which is seeing these stats and data-based markets rise in popularity. Particularly among younger audiences, many bettors now follow players closely, whilst in the past, they would have followed a team.
Tzeract provides Kambi with a ‘fantastic’ platform for pricing and trading capabilities, offering better quality and a wider range of pricing options, Nylen emphasised.
As mentioned in its Q3 report published this morning, Kambi leadership reiterated that the firm expects to launch live betting on the platform in Q1 2024.
Summarising both the firm’s AI efforts and its wider range of solutions in Q3 and beyond, Nylen asserted to investors: “The Kambi complete product is still a very strong product and we believe we have a strong pipeline going forward to make deals on our complete product.”
“I think what we have done over the last couple of years, giving more and more possibilities to differentiation, has made our product more and more attractive, and that’s what we’re seeing now in signing Svenska Spel and LiveScore Group.”
High prospect partnerships
From a product perspective, the Tzeract AI platform was the key highlight for Kambi. However, it was not the only topic on Nylen and CFO David Kenyon’s agenda during today’s conference call.
The signing of two new partnerships with Swedish state-owned operator Svenska Spel and betting and media provider LiveScore Group are of great significance to the Stockholm-listed B2B firm.
LiveScore Group’s ‘convergence model’ of business – combining its sports streaming and live scores app with the LiveScore Bet and Virgin Bet bookmaker brands – has been a key area of interest, with Group CEO Sam Sadi speaking to the SBC Leaders magazine earlier this year.
When quizzed on what potential he sees for the LiveScore convergence model by SBC, Nylen explained: “They have 30% of their acquisitions in the UK coming from the use of the LiveScore app, so obviously that is an amazing driver of owning your own affiliate.
“The way they have been working with this very deep integration – creating streaming services, the live scores app, news, and combining this with betting – I think is a very strong proposition.”
Kambi plans to take Svenska Spel live on its platforms in time for the UEFA European Championship next year, and expects both partnerships to begin having an impact on its finances in H2 2024.
Responding to an analyst question about the potential of the LiveScore deal, with the caller noting that Nylen projects that the firm will become one of its biggest partners in terms of revenue, the Kambi CEO focused on its new client’s strategy for growth.
“They are looking at international expansion, this is where a lot of this growth will come,” he explained. “I hope we can bring a better product to them so they can grow quicker on existing markets as well.”
A vision for global growth
At the end of Q3, the onboarding of LiveScore Group and Svenska Spel marked the ninth and 10th partnerships for Kambi this year. Nylen also provided investors with some insights into other arrangements, with its deal with BetMGM an area of particular interest.
Having been taken live in the UK by MGM Resorts on the LeoVegas igaming platform and with sportsbook support from Kambi, BetMGM is currently pushing its brand in the country through extensive marketing efforts.
In Nylen’s view, BetMGM is ‘gaining traction’ in the UK, whilst in the Netherlands, he is confident that it can replicate the success ‘household name’ 711 has had in the casino space in the sportsbook sphere.
However, although pursuing UK ambition, BetMGM is of course a primarily US facing operator. Also, for Kambi, 50% of the group’s revenue now comes from the Americas, and so SBC was keen to hear about Nylen’s view on international market developments.
The CEO responded that given its recent string of Eurocentric deals, Europe is currently ‘the biggest market’ for the company, for now, but further down the line, Latin America ‘is the market we will see the most growth in’.
“At this point I really hope for movement in California and Texas and then North America will become the largest growth market,” he said.
“Asia is the largest gaming market in the world by quite some distance and we hope that we can see some regulations there in the future.”
Summarising, Nylen reiterated that Kambi is striving to raise the bar in AI sportsbook trading and is placing innovation at the heart of its product development, as it continues to follow the ‘great strategic route’ laid out at its Capital Markets Day.
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