Kristian Nylen “How to make it in America”
Kristian Nylen, Kambi CEO
Kambi chief executive officer Kristian Nylen speaks to 5 Star about the sportsbook supplier’s eye-catching start in the US, their customer wins and why it has the best product in the market
How was Kambi prepared for PASPA?
The repeal of PASPA presented Kambi with what is arguably its greatest business opportunity, with the US likely to be our most important market in a few years’ time. We’ve started well and carved out a good position – and reputation – in the market. This has been possible due to our focused approach to regulated markets, always gaining the approvals of regulating bodies and always avoiding markets that could cause conflicts in relation to that – so avoiding black markets and unlicensed markets. It’s easy to go into those markets if you are seeking the quickest route to money – short-term success – but it’s not a long-term strategy for a reputable business such as ours.
We wanted to be ready for businesses in the US, and elsewhere for that matter, that would want to partner with a safe, reliable and elite sportsbook and that’s why, with PASPA being repealed, we were the obvious choice and I think that’s resonated with US regulators, casino groups and whoever else might be looking for a sportsbook partner. So I’d say that our preparations have always been embedded in the organisation through our regulatory approach from day one.
Just days after the PASPA judgment, you announced the Rush Street Interactive signing. Can you tell me a little about that?
Rush Street Interactive is a visionary company. It’s success with their SugarHouse brand – both the bricks and mortar casino in Pennsylvania and the online brand in the New Jersey market – is there for everyone to see. What’s really great about that business is its deep understanding of the customer – both how to attract and retain them through really clever marketing and the delivery of a quality product.
While the US was of course the main prize for them, they first wanted to work with us in Colombia. Not only did they see the potential of the regulated Colombian market and the success they could have with the Kambi product there (currently has a top 3 position in Colombia), but also the opportunity to test the product ahead of a US launch. We rolled out a Colombia-facing sportsbook with Rush in June, so they could also learn how to interact with the Kambi system and empowerment tools, to test out and try new things – and it was a great learning curve for them. This gave them a great base to work from when going into New Jersey, which I think has been proven by the success they have had. If you look at the figures posted by the DGE, SugarHouse is third in terms of sports betting revenues, way ahead of the major casino brands in the market. In fact, such was the quality of the integration of the Kambi Sportsbook into the Rush Street platform that we have, in effect, created a full igaming turnkey solution, one that can be offered to operators in other states.
Furthermore, with state-by-state regulation placing a focus on bricks and mortar casinos, the fact the Rush Street group has casino properties in Pennsylvania, Illinois and New York gives us important market access in major US states. We recently launched on-property sportsbooks in Pennsylvania through its Rivers and SugarHouse casinos and we are hopeful we will soon be able to accept wagers on the floor of the commercial casinos in New York.
And the signing of DraftKings?
DraftKings is an incredibly ambitious organisation driven by some very smart people. They are constantly looking at ways in which they can drive player engagement, entertainment and revenue in the US and around the world. Sports betting was always going to be something of interest to them – they just have such a great sports culture in the organisation. So once sports wagering became a business reality, they really wanted a partner they could trust, someone that would give them speed to market and a product which could compete with the best B2C operators out there. They wanted the freedom to differentiate from the rest of the market – they certainly didn’t want a me-too product.
The people at DraftKings have a wealth of technical expertise so that they could see the value in our product – that they could take our open platform and APIs and really create something that was unique to DraftKings. They looked at Kambi and saw a company that gave them the freedom to grow, the flexibility to build and innovate. You can see from the frontend they built on our Sportsbook core and how they leverage our price differentiation tool and bonusing capability.
Of course, we also took the first legal online bet with them. DraftKings set that target for themselves and we worked closely with them to achieve it. As mentioned previously, since our inception we have been focused on building a scalable business able to launch partners quickly in to regulated markets across the world. In New Jersey, we were able to prove that together we were the right group to take that first bet – the DGE trusted us with that. And that’s something we are very proud of and illustrates exactly who we are as a business.
How has the market developed so far in New Jersey?
I think it was assumed the established casino brands would be among the leaders in the New Jersey sports betting market, but that’s not really been the case so far. DraftKing’s leads the market while the Kambi-powered SugarHouse sportsbook has been outperforming the likes of MGM and Caesars, which gives us even greater belief in the quality of our product. According to the figures released recently by the DGE, and with 888sport having also launched, Kambi-powered operators had an approximate 60% market share in November, which shows we’ve made a good start up against some big brand competitors. Of course, it’s still early days and we continue to improve our product and give our operators the freedom to evolve theirs.
Kambi wasn’t really known for retail ahead of the US, have you had to make any changes to the product?
I think part of the reason for that perception is the great success we’ve had online, but it’s fair to say we probably undersold out retail product in the past. By that I mean we needed to be more ambitious and communicate better to the market about what we had to offer with our on-property solution. In recent years we have invested significant resource into developing a land-based product suite to match the quality we offer online, and we have successfully done that. We have a tremendous solution because what we have done is taken our online technology and translated that into retail the sphere, meaning we bring the excellence you are used to online; the depth of markets, the quality of in-play, the speed, and the presentation into the land-based environment. Furthermore, we’ve developed that in a scalable way, which is no mean feat.
We’ve long been powering the retail sportsbooks for Napoleon Games in Belgium and Televisa’s fleet of casinos in Mexico, for example, and earlier this year we struck deals with major retail operators in Romania and Sweden. Coupled with what we’ve done recently in the US, launching with DraftKings in New Jersey and the Rivers and SugarHouse casinos in Pennsylvania, and more recently Parx Casino, we’ve proven we have an appealing on-property solution for the US market and, importantly, that we can deliver. To be honest with you, executing on-property was probably the one small doubt we had about ourselves when going into the US, but after what we’ve achieved in recent months, it shouldn’t have been a concern at all and I’m confident we now offer the leading online and on-property sportsbook in the US.