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Should Gambling Operators Invent Their Technology?

01 august 2022
Author: James Burton
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Gambling operators and betting companies stick to a growing tendency to create their products instead of purchasing them from third-party suppliers.

Gambling operators' technology: pros and cons

Casino Market has delved deeper into the topic to present information about the current operations of distributors, the opinions of industry professionals and the possibility of the golden mean.

Current Affairs

Several operators in the US already have a line about the patented betting business technology on their platforms. This demand for self-made solutions is supported by huge financial resources.

Large distribution brands make deals with suppliers, for example:

  • DraftKings merged with SBTech;
  • Caesars acquired William Hill;
  • theScore bought out Penn National Gaming, etc.

An increasing number of companies in the US and Europe are starting internal debates about the need for self-making proposals.

The Kindred brand revealed intentions to build its betting program last year, switching from Kambi to a system based on the horse racing platform. The grand partner's representative, Jamie McKittrick, noted that this discussion, in one form or another, exists for about a quarter of a century.

Reasons for Being Independent

The advantages for operators in creating their products include:

  • general funds savings;
  • lower overhead costs.

A sportsbook lies between the distributor and the data source, but according to Sportnco manager David Bonnefous, it is far from acting as a middleman.

The expert claims that sportsbooks reap the most rewards from data suppliers to stand out from the competition and provide clients with more value.

Control Is the Path to Success

Many operators talk less about potential savings and more about independence and complete management as they go to a new level.

According to Andreas Reimblad, a spokesman for the Kindred bookmaker firm, control was the primary driver behind the company's decision to go solo. He claims that by using this strategy, the company will have long-term control over the things it offers and will be able to deliver more original content and customer service.

Mr Reimblad adds that the brand sees concrete changes in the market, which forces developers to adapt to new realities.

Mr Bonnefous says that the creation of internal technologies is a task that requires a lot of work and effort. The development of a proprietary betting solution requires large investments and iterations.

What Does Own Production Mean?

Gambling software development

Since several of Kambi's most well-known clients recently declared plans to switch to internal solutions, the company has given this matter substantial consideration.

The distinction between domestic and outsourced services is a false one from the perspective of a supplier. Each operator delegates various portions of their betting company tasks, even if they choose to manage a larger share of it.

Peter Heneghan, a Bettor Capital lawyer, thinks there are things that brands can use independently.

However, some technologies do not make sense to create, for example:

Mr Henegan claims that although some individuals could be interested in having their trading team, Swish Analytics or another real market solution is still used to assist them.

Will Balance Be the Solution?

In the question of equilibrium, one may envision major international corporations developing or acquiring their technology. Meanwhile, the providers of betting services struck arrangements with higher-level operators.

This shaking of the market has not yet been completely felt. For example, a grand firm Flutter still uses outsourced technologies with certain of its brands. And some medium-sized operators think it makes the most sense to employ their technology.

How Do Others Make It?

Differentiation is important if an operator wants to enter the mature gambling market.

The Kwiff wagering app comes up with something: the firm’s developers base their advertising strategy on a system where each wager can increase its odds. The company claims that this was impossible to meet the needs of consumers using third-party proposals.

Having complete control over a variety of product elements has emerged as a competitive advantage. A company representative Nick Maroudas says this allows the firm to:

  • follow its strategy;
  • easily unfold and change;
  • control processes.

According to Mr Bonnefous, for distributors operating in various jurisdictions, a third-party provider may handle localisation concerns, saving the operator from miring down. He asserted that this was taking on more significance.

Commenting on the potential long-term equilibrium, Mr McKittrick says this might lead to the majority of the market being in the centre of a sliding scale between outsourced and in-house solutions. He thinks that things were starting to alter.

Kristian Nylén, the director of Kambi, stated that the company is in talks with distributors about perhaps dropping the internal version.

Mr Heneghan claims that the growth of internet sports betting in the US followed the development of technology. Investors supported domestic decisions as a result. However, profitability is swiftly taking precedence after the decline in technology equities earlier this year.

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