Kambi CEO: Bally’s deal can make us a major US player

Kambi CEO Kristian Nylén has lauded the potential of the firm’s recent partnership with US casino and sportsbook operator Bally’s, suggesting it will spur greater growth in the business.

Nylén spoke as part of Kambi’s Q2 2023 financial results call, with the NASDAQ Stockholm-listed operator revealing a 42% year-on-year (YOY) increase in its second quarter revenue, which rose to $47.4m (€42.9m) in the period.

Company EBITDA rose 11% in Q2 to €12.9m, with operating profit (EBIT) falling by a quarter to €3.7m. Operating margin also fell 14.1% YOY, with profit after tax down 24% YOY from €3.3m to €2.5m

Kambi’s operational turnover was additionally impacted by the drop in YOY market share of its current US partner, PENN Entertainment, which Kambi is currently in the final stages of a $27.5m deal to sever existing sportsbook ties.

Kambi previously served as PENN’s sportsbook technology partner, but the operator successfully migrated the last of its brands to utilize Kambi technology, Barstool Sports, to an in-house developed platform earlier this month.

While PENN transitions away from Kambi, Bally’s agreed its own sportsbook technology supply deal with the supplier in May, and has already closed its Bally Bet sportsbook ahead of a transition from in-house developed technology to the Kambi platform.

Addressing the recent partnership in remarks during the Q2 2023 analyst call, CEO Nylén outlined his hope that the addition of Kambi technology to the Bally’s platform would allow them to become a “power brand” not only in igaming but also in sports betting.

“With this partnership, Bally’s have decided to scrap their in-house sports betting technology and go with us instead to maximise their opportunity invest the sports betting field, and we’re very pleased to be able to go on a journey with them to help them to achieve that target,” Nylén said.

“I think this is further evidence that Kambi’s complete sportsbook remains in high demand even for larger operators. Bally’s has already launched in two on property locations with us in Louisiana and Mississippi and we’re looking to roll this out faster in more Bally’s properties and also online.

“One of the major things in the Bally’s deal was of course their flexibility and the possibility to work and have a lot of say on how to work with sports betting, similar to many other operators who have chosen to use their own frontend online while being powered by our APIs,” he added.

Bally’s agreement with Kambi covers products, content, and trading on both retail and online sportsbook technology and igaming.

Additionally, Bally’s maintains the option, pending the satisfaction of “certain material performance metrics”, to acquire a license to a limited part of Kambi’s online and retail technology source code.

In the event that Bally’s chooses to exercise the option and pay an agreed sum, the two parties would enter into a separate long-term outsourcing agreement in relation to Kambi’s range of modularized services.

But for Nylén, the partnership with Bally’s does not end with just the US market, with the Kambi CEO suggesting a broader impact on the supplier’s fortunes in the future.

“To fully understand what the Bally’s opportunity means, almost a billion dollars of its revenue is coming from outside of the US. Bally’s has very strong brands following the acquisition of Gamesys in 2021, in Europe and also in Asia and especially in Japan,” Nylén said.

“Bally’s has a network of 21 different radio and TV networks where you can watch professional sports. Bally’s is live in 18 US states, so we think that through this we can be not only a major player in the US but also we see opportunities in Europe, Asia and possibly Latin America going forward,” he concluded.