LeoVegas extends Kambi sportsbook deal as Tipico platform integration continues
LeoVegas has extended its turnkey sportsbook deal with Kambi to the end of 2027, as the operator continues to migrate onto its in-house sportsbook platform.
The deal, which was last extended in 2023, includes a new agreement for Kambi’s Odds Feed+ solution, which will be offered beyond 2027. Kambi had likely been preparing to lose LeoVegas as a turnkey sportsbook client after the operator acquired Tipico’s US betting platform last June.
Tuesday’s announcement raises questions around the migration of LeoVegas’ in-house platform, which MGM CEO Bill Hornbuckle said would be launching in Leo’s “core markets” back in February.
Hornbuckle added the full integration of the sportsbook’s assets was to be completed by the end of H1.
At the time of the platform acquisition, LeoVegas parent company MGM said the agreement would provide it with a purpose-built proprietary sportsbook, to be launched across all its international markets and brands.
This excludes North America, where BetMGM is operated as a joint venture with Entain, which powers the product across the US and Canada.
Of the renewed deal, Kambi said it would run for an additional two years, “during which time LeoVegas will continue its migration to its proprietary sportsbook platform”.
When asked for comment, LeoVegas said the Tipico integration remains on track.
“The extension with Kambi is a natural part of our strategy to ensure business continuity while the integration of our proprietary Tier 1 sports betting product remains on schedule,” a LeoVegas spokesperson said.
Under the new deal with Kambi, LeoVegas’ brands, which include BetMGM and BetUK, will use Kambi’s full library of traded odds.
Kambi CEO Werner Becher voiced his excitement at extending the partnership with LeoVegas, which first began in 2016.
“While we look forward to another two years of turnkey provision, it speaks to the quality of our trading capabilities that LeoVegas also secured access to our Odds Feed+ solution, taking our partnership into a new phase,” Becher said.
Impact of deal renewal on Kambi
This renewed partnership will be a welcome move for Kambi, which has lost core clients like Penn Entertainment as a number of operators have moved onto in-house platforms.
Kambi’s Q1 revenue and net profit both declined year-on-year, with CEO Becher stating the company’s results were “far from the future level [we] aspired to”.
The supplier said at the time it was focusing on diversifying its offering and client base to help it return to growth.
In an analyst note dated June 2024, Norwegian investment bank ABG Sundal Collier said Kambi would likely not be impacted by the loss of its LeoVegas deal until after 2026, due to potential consensus revisions.
“We believe LeoVegas accounted for ~3% of Kambi’s revenue in 2023, but forecasts called for it to become a larger customer over time following MGM’s international efforts (e.g. with BetMGM UK). As such, the long-term earnings will likely take a hit,” the note said.
“However, we do not rule out the potential of MGM becoming a modular client; for example, we see BetBuilder as an attractive product for a company building an in-house sportsbook, as many big operators have out-sourced that product according to our research.”
Operator-supplier relationships are becoming more ‘flexible’
In a recent interview with iGB, Kambi SVP of Commercial Operations Jamie Mckittrick said the company is evolving to meet the growing demand for more flexible relationships between suppliers and operators.
“While our turnkey sportsbook remains our core offering, we have adapted to market changes by expanding our portfolio of sports betting products,” Mckittrick said. “This ensures we can deliver premium solutions tailored to operators of varying sizes, geographic footprints and strategies.
“The development of products such as Kambi’s Odds Feed+, which provides unrivalled quality and adaptability for operators requiring a premium odds service, is a prime example of this adaptation.”