Rise of the betting dev shop: Why operators are turning to specialist developers

For a long time after being acquired by Entain in 2023, Angstrom was a company much spoken about but rarely heard from. Often name-checked on earnings calls, variously from Entain itself but also by BetMGM and MGM Resorts, knowledge about the business didn’t extend much beyond being viewed as a vital cog in the SGP armoury.

From Angstrom itself, very little was heard. But that appears to be changing after the company’s efforts to build a free-to-play game called Seven were foregrounded in a press release from parent Entain this month.

This signals more than a “coming out” for Angstrom’s efforts behind the scenes and provides a pointer to how betting products are set to evolve in the coming years.

“If you had told me – or anyone on the leadership team – a couple of years ago that building a customer-facing, free-to-play (F2P), mass-market app, and creating a brand as well as a product, would be on Angstrom’s roadmap, I don’t think many people would have placed that bet,” says Ross Jarvis, director of strategy at Angstrom.

Autonomous teams using tech to build outside of their remit

Angstrom was acquired by Entain primarily for its US pricing and modelling expertise and the Seven F2P game appears to be moving the company another step on, pointing to the potential for specialist B2B businesses to become internal “dev shops”: relatively autonomous teams that use their tech and domain expertise to develop products outside their original remit.

Leo Gaspar, founder at Adria Nexus Consulting and previously co-founder at Huddle, says the line between providing tech and helping to design the consumer solution is already being crossed. “The strongest specialist companies increasingly understand not only the technology they provide, but the consumer problem that technology can solve,” he says.

“Once that happens, it is quite natural for them to move further into product development.”

Major operators already employ large technology and product teams but those teams must also maintain platforms, manage migrations, meet regulatory requirements, localise products and handle the rest of the technical side of any betting operation.

Marc Thomas, managing director at Algosport, describes some operator platforms as “a little Frankenstein”, having been added to and modified over many years. Consequently, an internal development team may spend much of its time “keeping the lights on” rather than pursuing new products.

‘Best ideas come from knowing what is technically possible before anyone else’

Specialists can bring both greater focus and fewer organisational dependencies. Seven began with discussions between Jarvis and Angstrom CEO Jonathan Blezard before Entain authorised the team to proceed. It resulted in an 18-month development process.

Angstrom’s modelling background shaped the consumer proposition. Historical English Premier League data was used to determine the prize structure, the likelihood of players scoring first or last and how often users could select an individual footballer before being locked out.

For Gaspar, a concentration of knowledge such as this gives specialists an “unfair advantage” during the exploratory phase. “The best ideas often come from understanding what is technically possible before everybody else does,” he says.

The operator brings the assets required to turn an experiment into a scaled product: distribution, brands, customer data, infrastructure and compliance expertise. It leaves the specialist to concentrate on the narrower mandate and domain knowledge needed to test an idea before it becomes entangled in a larger corporate roadmap.

But obvious tension does arise. Operators often acquire specialists for their speed and entrepreneurial culture, only to impose the processes that previously slowed the parent organisation. Thomas’ advice is uncomplicated: “Basically, try and leave them alone.”

He accepts that some integration is inevitable but argues it should happen gradually. Similarly, Gaspar draws a distinction between integration and absorption. “Integration means giving the specialist access to the operator’s assets: distribution, customer insight, infrastructure, regulatory expertise and commercial scale,” he says. “Absorption means turning it into another development team competing for resources inside the same organisational structure.”

The first can strengthen the acquired company; the second risks eliminating what made it valuable. Gaspar proposes a practical test: can the specialist still move from an idea to a meaningful customer experiment materially faster than the wider organisation?

Value of reusable IP

Seven also illustrates the potential value of reusable intellectual property. Entain has initially launched the game around Premier League football in the UK, but its stated ambition is to take it into other brands, markets and sports. Angstrom has already explored how its first-or-last scorer mechanic might translate to touchdowns in the NFL.

Gaspar argues reusable capability is strategically more valuable than bespoke development, provided it does not merely produce identical white-label products.

“You might have one core piece of IP underneath several very different consumer propositions,” he says. “For the operator, each additional implementation becomes faster and cheaper. For the supplier, development creates an asset rather than simply another completed project.”

Thomas says Algosport is experiencing similar demands. Its core products are delivered through its Blackbox software, but partners can build additional services around that technology. The company is also routinely asked to modify or extend products for individual suppliers and operators.

“It’s this flexibility that perhaps extends Algosport’s status from simple B2B supplier to more of a resource or partner for forward-thinking companies,” he says.

The commercial value of these arrangements will not always appear as direct revenue. New products may improve acquisition, retention, reactivation, customer frequency or differentiation. Reusable technology may also reduce development costs and dependence on external suppliers.

Risks for independent suppliers

There are risks for independent B2B companies. A supplier working closely with one operator can gradually become a bespoke development team whose roadmap and revenue depend on that customer. Gaspar describes the essential defence as customising “the last mile rather than rebuilding the engine for every customer”.

Nor will every capability be brought in-house. Thomas points out that even major operators may struggle to justify proprietary development for lower-revenue sports, whereas a supplier serving multiple customers can benefit from economies of scale.

The betting dev shop therefore occupies an increasingly valuable middle ground. It can sit inside an operator, remain independent or operate somewhere between the two.

The competitive question is becoming less about who employs the developers and more about whether operators can assemble specialist capabilities and ultimately convert them into products customers actually want.