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Philadelphia-based sports betting operator Sporttrade has gone live in its second US state after launching in Colorado.

Sporttrade, which is also live in New Jersey, describes itself as America’s only regulated sports trading platform with technology modelled on financial market trading.

Like stocks, Sporttrade users can trade in and out of their sports bets at any time.

The business believes it can offer a differentiated betting experience to players with a fairer product based on price transparency, greater liquidity and reduced transaction costs.

Sporttrade founder and CEO Alex Kane said: “Our launch today proves that Sporttrade can operate in any jurisdiction, with the same great features our customers have come to know us for; instant in-play betting, great prices, awesome liquidity, and the ability to always trade in and out of bets at fair value.

“Thank you to the wonderful folks at the Colorado Division of Gaming, thank you to our growing family of customers, and most of all, I want to thank the fantastic Sporttrade team of employees, advisors, and investors,” he added.

The launch in Colorado was facilitated alongside strategic partner GF Gaming. Centennial State bettors have bet more than $12bn in handle since 2020.

“Having seen what Sporttrade has already achieved with its innovative and successful launch in New Jersey, we firmly believe that the brand and platform make for an ideal partnership for us in Colorado,” said Roger Brown, general manager of GF Gaming and Easy Street Casino.

“Providing a better odds experience for the player is what GF Gaming has always been about, and Sporttrade brings that same priority to the sports betting market in Colorado.”

Hub88 has partnered with TradeArt, the next-generation odds trading platform, in a deal that will provide a strengthened sports betting offering to operators.

The partnership sees Hub88 support TradeArt’s solution, which aggregates and automates odds data streams from various providers, empowering sports trading businesses to select the perfect feed for each event.

The TradeArt offering is available to all Hub88 customers, and through managed trading services, operators can create market specific offerings providing odds for popular sports and events.

TradeArt can easily be integrated via a single API or iFrame and will not require extra effort through the Hub88 platform. Through an intuitive back office, operators can also control and manage the risk down to a customer level.

By joining forces, Hub88 can offer an enhanced sports betting product via its leading platform and provide access to a vast portfolio of options including daily fantasy sports and horse and greyhound racing.

The sports betting product perfectly complements Hub88’s superior casino offering, providing operators with a complete solution to run its business.

Ollie Castleman, head of Hub88, said: “We are excited to partner with TradeArt and boost our sports betting product, adding additional value to our platform.

“This premium data-driven solution for sports trading will be beneficial for all our operator partners that are looking to strengthen their offering and with a localised approach, it is easy to provide players odds on the events they demand.”

Kirill Mavrodiev, director of TradeArt, said: “We are always looking to partner with likeminded companies to create synergies and offer better experiences to players.

“Together with Hub88, we can provide our premium services to even more companies around the globe that are looking to offer a diverse sportsbook.”

Shares in Betsson are trading higher today (11 July) after a trading update suggested the operator is on track to deliver its best ever results in Q2 2023.

Preliminary results

Revenue for the quarter is expected to come in between €235.5 and €237.5m, the highest level ever recorded by Betsson in a single quarter.

At the range’s midpoint, €236.5m, the year-on-year growth rate for revenue compared to Q2 2022’s €186.3m would be 26.9%.

The sequential growth rate compared to Q1 2023 would be around 6.6%.

Operating profit (EBIT) for the latest quarter is expected to land between €53m and €55m, another new record for Betsson and ahead of previous analyst expectations for the quarter.

“The second quarter 2023 has been characterised by continued high customer activity both in casino and sports betting, which has resulted in a strong financial development for Betsson,” said the Stockholm-listed firm in a statement.

Growth drivers

The preliminary sportsbook margin for Q2 is around 8.2%, it added, broadly in line with last year’s Q2 margin of 8.3% but ahead of the rolling average for the last eight quarters, which stands at 7.8%.

Betsson revealed that group revenue has increased across all regions when compared to Q2 of 2022.

Central and Eastern Europe and Central Asia (CEECA) continues to be the firm’s largest geographical region by revenue, accounting for some 43% of the total.

The Nordic and Latam regions are each expected to account for around 22% of group revenue, while Western Europe generated some 11% of the total. The remaining 2% came from the Rest of World segment.

Future outlook

Looking ahead, Betsson said that so far in Q3, average daily revenue is 13.7% higher than the same metric for the full Q3 2022.

When adjusted for currency effects and acquisitions, average daily revenue came in 22.6% higher.

Following the end of Q2, Betsson completed its €120m acquisition of leading Belgian operator betFIRST.

Betsson will release its full Q2 2023 financial results on 20 July.

Simon Trim, strategic adviser to the world leaders in tennis pricing 10star, explains how the landscape for the sport will change from 2024.

After more than a decade of supplying tennis data, news recently broke that IMG had been replaced as the official distributor of ATP Tour data by Sportradar.

While the official price tag for the rights to the data hasn’t been revealed, the price will certainly be in the high hundreds of millions for a six-year deal.

Given the importance of tennis to sportsbooks around the globe – and the established nature of the in-play product that this information “live from the umpire’s chair” underpins – the successful bid is great news for Sportradar’s strategy of acquiring more of the premium-level official data that powers top-tier betting content.

But what does it mean for the sportsbooks themselves?

Details of any sub-licensing are yet to appear, but there is a possibility that operators powering their existing tennis product through an IMG or Genius Sports feed will be forced into a technical re-integration exercise.

While this may be a discomfort, it isn’t catastrophic.

But it’s also likely, given the eye-watering size of the deal, that some of the price tag is going to be loaded onto the operators, especially given the recent history of spiralling data rights’ costs being passed on to sportsbooks themselves.

For operators, the prospect of diminishing returns on such a commercially important sport like tennis is a worrying one.

Even the largest operators have a limit to what they will pay for official data, and for the longer tail of operator currently powered by cheaper sub-licences, the increase in cost could be significant.

For those operators that choose to maintain the use of official data it is going to be vital that the in-play prices they generate from it can maximise their hold on turnover.

Unfortunately, for many, their existing pricing solutions are not capable of this.

The original deal IMG struck with the ATP for data back in 2014 was in many respects the seminal “official data rights deal” and many of the operators that signed up then will have been taking a price feed from the same third party supplier ever since.

However, much has changed in the industry over the last decade to squeeze margins – escalating cost of operations, expensive market access deals, heightened social responsibility measures alongside tougher macro-economic conditions – but the quality of prices being offered by the existing B2B supply chain hasn’t kept pace. 

Given a re-integration of a new feed might be on the cards for many operators, now is also a good time to review how good the pricing service they currently receive is.

To help with this, 10star have recently released a range of SaaS analytic tools and services, called neural, that assess all aspects of a sportsbook’s business from an anonymised data set – including customer skill, market performance and model weaknesses – that can help improve existing performance and identify if a change in provider would yield meaningful improvements. 

10star are the world leaders in tennis pricing, trading and risk management, formed in 2020 following Magnus Hedman’s acquisition of specialist tennis market maker Jasis.

As well as being the primary liquidity provider for betting exchanges, Jasis has also been supplying the world-renowned Pinnacle sportsbook with tennis pricing, trading and risk management services since 2016. 

Given the tendency of the B2B supply chain to copy its prices from both Pinnacle and Betfair it could be argued that 10star is already driving the world market when it comes to tennis trading. 

However, there is a huge difference between taking a service supplied directly by the experts and paying fees to a supplier for an offering that is based on copying those prices. While Pinnacle’s tennis prices are visible to the industry, the underlying 10star probabilities that power these odds and the liquidity they generate are not.

The outcome is that the industry is blindly following a “black box” with no understanding of how the odds are generated and, crucially, no capability to risk manage in-play.

Given that approximately 90% of pretty much every sportsbook’s action on tennis occurs after the game has started, handing over responsibility for this revenue to a supplier that can’t manage it won’t do anything to reverse margin decline. 

Herein lies one of the key problems that the betting industry currently faces. 

Although unbelievable now, in-play was a “new kid on the block” only 15 years ago, with many sports betting operators having little or no in-play product available.

The outcome was that in-play brought them a whole new revenue stream, made more accessible by a shift in consumer behaviour to online from retail, traded from low tax jurisdictions and powered by cheap data.

The result? No need for price differentiation and no need to manage risk – why bother with the expense of an expert trading function when treating betting odds as basic content offered the chance of huge cost savings from buying in lines from suppliers that aggregated market prices. 

That’s largely the supply chain that exists to this day, even though the industry it supplies is a much tougher place.

This is where 10star is different.

Not only have we developed best-of-breed tennis models, we use the liabilities that are generated by the wagers themselves as inputs into the prices we produce, rather than risk manage as an after-thought or ignore it altogether.

Moreover, our tennis model – and all our models – are fully correlated, meaning that if there is a change in the price of a player to win the match caused by liabilities that have been generated on that market, the change flows down through all the related derivative markets automatically. 

Similarly, exposure in derivative markets such as next point or game winner flows back up the model in the same way. 

Using automated risk correlation as the framework of the 10star model makes our models unique in their capability to manage liabilities that are generated in play, ensuring that our partners are optimally positioned in the market to maximise their revenue, right until the last point is played.

All prices move in unison, ensuring operators can’t be “picked off” by markets that haven’t been updated.

Any information from “sharp bettors” is automatically accounted for by the price changes the model makes, overseen by a team of expert traders.  

Furthermore, a decade of managing liquidity generated from the betting exchanges (where the counterparts are anonymous) means we can manage all types of betting turnover from all types of customers, giving our partners the confidence to stand larger positions and lay bets to more skilled or retail customers that are otherwise turned away.

Lastly, our market-leading multiples/combination risk management algorithms mean that we deliver market-leading returns on turnover across all forms of betting, pre-match as well as in-play. 

10star’s expertise in tennis and our ability to provide expert pricing alongside efficiently correlated risk management provides a solution for operators that are trying to pull their businesses out from the industry black hole they have been sucked into, either by following a business model that is no longer fit for purpose or being dragged back by existing suppliers that can’t keep up. 

On the surface, a change to an official data rights provider isn’t particularly important but if operators also use it as the catalyst to pivot from a failing business model then it could present them with a game-winning second serve.

10star is a new, world-leading pricing, trading and risk management service for sportsbooks, gaming and lottery operators.

10star won’t be following the market; it will make it.

A fully integrated solution that provides operators with made-to-measure risk management on top of market-leading pricing and trading, 10star brings the discipline and innovation of financial markets to the betting industry to help generate “alpha” on everything from a single esports title to a fully managed trading service—that means higher returns, lower volatility, operational efficiency and bottom-line uplift.

From the same owner of industry-leading operator, Pinnacle, 10star is launching to enable operators to outperform in increasingly challenging markets.

For more information, visit 10star.com

Simon Trim has over 25 years’ experience in the betting industry, including 15+ at board level. A driving force in bringing the sophistication of spread betting to power the growth in the B2B fixed odds market, he is now strategic consultant to premium market-making and risk management service 10star. 

Recently launched by the same owners as Pinnacle, 10star is looking to utilise this heritage to modernise the sports betting industry by bringing some of the data innovations and risk management techniques of the financial markets to improve the bottom line for sportsbook operators.

Kambi has reported all-time high full-year revenue after a strong Q4 2022 period driven by the World Cup and a busy US sporting calendar. 

Topline numbers

Q4 2022 revenue rose 66% year-on-year to €57.8m, including a €12.6m early termination fee from US operator Penn Entertainment, which is migrating away from Kambi this year and onto its own proprietary sportsbook platform.

EBITDA for the quarter increased by 104% to €27.3m as operating profit (EBIT) came in at €18.7m, up 164% on last year at an operating margin of 32.3%.

Excluding the early termination fee, Q4 revenue hit €45.2m, representing an increase of 30%, while operating profit actually decreased by 15.5% to €6m.

Kambi’s Operator Turnover Index, which illustrates the quarterly turnover of operator clients, soared by 20% year-on-year and by 43% sequentially, with a combined operator trading margin of 8.1%.

Kambi said the busy US sporting calendar was a key driver of growth after expansion into new states including Kansas, Maryland and New York when compared to Q4 2021.

On a full-year 2022 basis, revenue reached €166m amid a modest annual climb of 2%. This was an all-time high for the company.

The Stockholm-listed supplier reported annual declines in both EBITDA, down 20% to €63.4m, and operating profit, down 39% to €34.8m.

In geographic terms, the Americas contributed 55% of Kambi’s Q4 operator GGR as Europe provided 42%. The Rest of World region made up the remainder at 3%.

News nugget

The 2022 World Cup final, which saw Lionel Messi’s Argentina emerge victorious, set a new turnover record for a single match.

The winter tournament played a major role in football recording year-on-year turnover growth despite a reduced number of domestic fixtures in November and December.

Nine of Kambi’s top 10 sports events by turnover in Q4 were World Cup fixtures.

Kambi CEO Kristian Nylén said player engagement was excellent throughout the competition, which also helped to showcase the supplier’s new third-gen algorithmic trading capability.

“This new method of trading automation has been in development for a few years, with the World Cup providing us with the perfect opportunity to stress-test it at scale and we couldn’t have been happier with its performance,” said Nylén.

“Powering our entire pre-match offering, this proprietary capability leverages the full power of data to deliver an even greater product, with more betting opportunities presented to the player in a quick and cost-efficient way,” he added.

Since the tournament, Kambi has fully automated its pre-match pricing to deliver a World Cup standard product across many domestic leagues, while the additional automation of in-play pricing could follow later this year.

Best quote

Kambi highlighted the pricing of its BetBuilder product in the earnings call, which will be wheeled out as a separate product as part of its ongoing modularisation strategy.

In the Super Bowl BetBuilder example above, Kambi partners offered better value via the supplier’s BetBuilder technology than leading US operators using different or proprietary software.

ABG Sundal analyst Oscar Rönnkvist asked how Kambi was planning to make the US sports bettor aware of its supposedly superior pricing. Nylén said the below in response:

“We will really push operators to be aware of how good a pricing they have. We may not have done a great job so far on it, but you can be sure that is top of mind for us. This will become more and more evident when cash out becomes more of a given for BetBuilders.”

Best question

The best question also came from ABG Sundal’s Rönnkvist. He asked what impact Kambi had felt from Mattress Mack’s $75m win on the Astros to win the World Series.

The US store owner placed massive bets with six US sportsbooks, including two Kambi clients in Kindred Group (Unibet) and Penn Entertainment (Barstool Sportsbook).

Kindred paid out £4.4m on the winning wager, while Penn lost $10m.

The answer did not match the question on this occasion: “I don’t want to go into exact details but we took two bets,” said Nylén. “There is some impact on us during the quarter yes.”

Current trading and outlook

After the reporting period, Kambi expanded its footprint in North America via day one market launches in both Massachusetts and Ohio. It also extended its partnership with US operator Rush Street Interactive.

Kambi provided long-term financial targets at a Capital Markets Day event in January, which it hopes to achieve by 2027. The supplier is aiming for 2-3x 2022 revenue of between €330m and €500m, as well as operating profit in excess of €150m.

Kambi expects its global total addressable market (TAM) to hit €50bn by 2027.

Light & Wonder-owned sports betting supplier OpenBet is set to acquire bet pricing specialist Multi Builder, ahead of its $800m sale to Endeavor.

Under the deal, OpenBet will acquire the assets and talent of Multi Builder Limited, as well as the talent of Sportsbook Training Services Limited, in what it described as a “strategic move to continue enhancing its product offering.”

Multi Builder’s proprietary sports technology and quantitative trading models, traded under the brand ‘Sportsbook Models’, will be fully incorporated into the OpenBet product portfolio following completion.

The technology was developed by sports betting veterans Oliver Preston and Jonathan Smith – who together boast more than 40 years’ experience in the industry.

Preston holds experience as a football trader at Sportingbet, as well as data modeller and senior modeller at Sporting Group, while Smith was a trader with IG Sport, senior odds compiler for Ladbrokes and trading development manager at Sporting Group.

OpenBet MD Nikos Konstakis: “The addition of Multi Builder Limited allows us to accelerate [our] growth trajectory, drive innovation and offer next level betting entertainment for our operators’ players.”

Together, the pair has primarily been focused on “creating and powering best-in-class algorithmic sports betting models that deliver quality content depth and improved margins across multiple sports,” OpenBet said.

The integration of Multi Builder into OpenBet’s product portfolio will drive enhanced pricing and trading performance, the brand said, furthering its commitment to delivering “world-class Content, Technology and Managed Trading Services across multiple operators globally.”

As a further benefit to the deal, Smith – who is also a leading sportsbook trading trainer – will now provide training services exclusively on behalf of OpenBet.

Commenting on the deal, OpenBet chief product officer Nikos Konstakis said: “This deal marks another significant milestone into the development of our Pricing & Trading Services strategy, which continues to grow in importance as OpenBet drives operator value through deeper market offerings alongside higher flexibility.

“Through the acquisitions of DonBest and SportCast in recent years, coupled with our internal roadmap, we saw our content and pricing revenue grow by over 100% in 2021. The addition of Multi Builder Limited allows us to accelerate this growth trajectory, drive innovation and offer next level betting entertainment for our operators’ players.”

Multi Builder MD Oliver Preston: “We are extremely proud to be part of OpenBet’s latest expansion strategy, further developing their market leading portfolio. OpenBet is the stand-out sports technology, services and content business.”

Oliver Preston, MD of Multi Builder Limited, added: “We are extremely proud to be part of OpenBet’s latest expansion strategy, further developing their market leading portfolio. OpenBet is the stand-out sports technology, services and content business.

“Their relentless focus on customer and player experience is second to none. Our offering will complement the company’s current products very effectively, enabling it to continue providing quality, scale and depth of systems across global markets. We’ve found a trusted partner in OpenBet and we can’t wait to get started.”

The deal has been agreed ahead of Light & Wonder’s upcoming sale of OpenBet to Endeavor, an American holding company for talent and media agencies which also owns the UFC and Miss Universe contests.

In July, the price of that sale was slashed by $400m, from an originally agreed $1.2bn to $800m. The sale is expected to complete by the end of Q3 2022.

OpenBet is expected to complement Endeavor’s existing presence in the sports betting industry, which it holds through its ownership of sports data specialist IMG Arena.

Fanatics has recruited one of the UK’s leading trading directors as it gears up for its US sports betting launch.

The merchandising giant has hired former Sky Betting & Gaming (SBG) executive Andy Wright to lead its trading arm as SVP of trading.

Wright spent more than seven years with Leeds-based SBG. He joined the operator in 2014 from Sporting Index as head of football trading and rose through the ranks to become trading director in 2018.

At the beginning of 2022, Wright started a new job as trading director for Africa-based KingMakers, the sport and digital entertainment company behind the BetKing brand.

However, iGaming NEXT understands he exited the firm after less than six months as the opportunity to join the newly formed betting and gaming team at Fanatics was simply too good to turn down.

Wright served his last day at KingMakers on Friday 29 April and will start at Fanatics on Wednesday 4 May.

He will report into Fanatics betting and gaming CEO Matt King (pictured), who took charge of the company’s gambling vision after quitting FanDuel for the role in the summer of 2021.

Wright will work for Fanatics on a remote basis, splitting his time between Leeds (UK) and New York (US), where the firm has already laid its betting and gaming foundations.

Fanatics is yet to launch a real-money gambling product in the US but has major aspirations. Last year, it filed trademarks for a casino, sportsbook and mobile betting app.

The company has built a business selling sports apparel and merchandise. It has also launched a high-end NFT business unit called Candy Digital.

Gaming industry equity analysts have suggested Fanatics could become a major player in the US sports betting market – despite its late arrival – because it boasts an engaged user base of more than 80 million digital-savvy sports-mad customers.

The US betting podium is currently occupied by FanDuel, BetMGM and DraftKings, but could be ripe for disruption if King – who led FanDuel as CEO between 2017 and 2021 – realises his vision.

Fanatics, which has both digital and retail ambitions, is expected to invest heavily in its betting and gaming segment. The company’s careers page is currently hiring for more than 50 technology-led roles, including vice president of IT and senior director of platform product.

The tech department will be led by CTO Ian Botts, who joined Fanatics just three months ago. He served as SVP of software development under King at FanDuel.

It remains to be seen whether Fanatics will build its own sports betting technology or flex its M&A muscles to acquire the finished product.