Has Kambi been planning to expand into the esports market for a long time, or is this a relatively new idea?
It's not new. We've been operating an esports product for probably five years now, gradually growing it, and turnover has also gradually increased. There was a bit of a step change during the pandemic, where you literally had to choose between esports or table tennis as a customer.
I think what was encouraging though was that when sports returned, the interest for esports had increased a lot, and it stayed quite high, so I guess that made us even more interested in esports. The thinking was that this will continue to grow and will be one of the bigger sports potentially long term, if you do it right.
When we first met with Abios earlier this year we saw directly that this was a fantastic opportunity for us - in a more niche area - to be able to deliver something really good. Esports betting is much more immature than other sports as the structure in the value chain or in the data is not there like the way you have it for football or tennis, for instance. So we saw that with the right technology and the right people, you can do so much more here. The idea is that we come with sports betting and trading expertise, they come with real expertise about esports, those types of end users, and the data, and if we put that together, we believe we can build a much better product for esports and sports betting to further increase the interest in it as a betting product.
You mentioned that esports is an immature market, but is there a timeframe for when you see this market really coming to the fore?
From a product perspective, I think there will be a big change once someone really cracks how to do in-play with it. That goes all the way to the type of data that is delivered, but closer to our operation, it comes down to what type of algorithms and operation is set up around it to deliver really good in-play experience, both on the trading side and on the UX side, so that the end user has all the relevant information presented to them that motivates placing a bet. It will be gradual. I think in one year from now, the esports product will be significantly better and go on from there.
Can you see either Europe or the US leading the way in terms of potential? Is one currently leading the way?
I think Europe is ahead for a simple reason, and that is regulation, and of course in general sports betting is ahead in maturity. But when the US first opened, esports was not allowed. Now, state by state it’s starting to open up. So I think the biggest growth area will probably be in the US, but again the product and the industry is immature in Europe as well, so there's certainly potential there too.
Why did you choose Abios? Did it have something that stood out from other companies?
Abios certainly was the main choice. They have been working with our customers for many years, delivering content to them on the UX side. So through that, we have known the people for a few years now and I think what stood out was that we felt it was a very good cultural fit. They have the same drive as us to aim to deliver the highest quality, the best experience - whether that's focusing on traditional sports or on esports. And they're a very good team, we're very impressed by what they have achieved around data management with relatively few people in a short time.
I think the biggest growth area will probably be in the US, but again the product and the industry is immature in Europe as well, so there's certainly potential there too
Obviously it's a very fresh deal and it's very exciting right now, but what is the long-term vision with Abios?
One thing of course is to integrate the two operations and technologies into a betting and trading product. I think that will be one of the focus areas now, to bring our trading and algorithmic experience together with their esports and data experience to create a better offering, both for pre-match and in-play.
Organisationally, we want them to continue as one company, as one unit, continuing to do what they do - both selling into the Kambi network but also outside the Kambi network. They also deliver content outside the betting industry, and we see that continuing. We think they have built something great, and we want to make sure that we can leverage that, but also that we don't limit their possibilities. We want them to have an absolute continued focus on esports and what they have done so well.
Finally, can you ever see esports betting overtaking traditional sports betting?
No, I don't think so. At least not in the next 10 years. After that, it's anyone's guess.