While it may have shied away from the industry arms race seen in the weeks following the Supreme Court’s repeal of PASPA, Amelco has quietly been carving out a niche in the nascent US sports betting market. The supplier’s chief executive Damian Walton discusses the current state of the market.
People could have been forgiven for thinking that in the rush by sports betting suppliers to establish themselves in the US, Amelco had been left behind. But then again, doing things quietly and efficiently has always been the supplier’s style.
While it may not trumpet its major client wins, it has carved out significant market share in the global betting and gaming market, and the US is no different. Amelco has already been licensed in New Jersey, where it powers sports betting for long-term partner The Stars Group, and is preparing to expand into three additional states.
Amelco’s development has been underpinned by its modular platform, allowing partners to pick and choose the elements they require. It’s surprising, then, that a key project of recent years has been the development of a white label offering.
The aim is to provide a turnkey solution for clients to quickly launch a sportsbook, casino or iLottery offering – “in six weeks”, chief executive Damian Walton notes – with more operators looking for a cheap and cheerful route into new verticals.
“A lot of businesses, at the start, are looking for a minimum guarantee each month, and a white label solution helps them achieve this across,” he explains. “For us, there’s no difference between putting out our product and a tailored product.”
This does feel like a departure from Amelco’s core business, however. As a technology and trading software provider, it has put great emphasis on offering a modular solution to allow clients to pick and choose the elements they need. But the modular focus remains. The US market could prove to be the best possible endorsement of such an approach.
“What we’re seeing in America is that sports betting is taking off and companies have paired off,” he says. “But they are now looking at their solution, wondering whether they’ve picked the right one, and are realising there are alternatives out there.”
Key to this, he says, is the question of who owns the customer. Walton notes that many deals have seen European and US operators pair up, with the European operator taking on the role of the B2B provider. This sees their technology deployed on behalf of their US partner, with the sports betting operations effectively outsourced.
Now, Walton explains, companies are starting to reevaluate these deals.
“[The operators] are now looking at whether they really do want to use [their partner’s] brand over their own,” he says. “It’s really a question of who owns the customer – we’re seeing a lot of that, operators turning to alternative routes where they own the customers.”
Owning the customer
He believes it is unlikely that things will settle down any time soon, as companies explore the possibility of shifting to solutions that give them full ownership of each player. Walton says he has also seen a greater desire among the US operators to take control of trading. This means that operators are less interested in a single solution from a single supplier, instead building up a composite offering supported by a range of service providers.
“It doesn’t have to be a technology partner that provides this,” he explains. “It can be a solution where the customer is providing that physical trading alongside third party technology.
“Ownership of customers is very fashionable at the moment, so you can segment customers across sports, tiers and margins. This is where people are focusing; they’re not looking for a single solution, rather incorporating a level of differentiation in pricing to different target channels.”
Customer ownership, he continues, has the added benefit of allowing for more in-depth player profiling, not only for marketing related activity, but also for responsible gaming. He says that it has traditionally been left to an operator’s, or supplier’s, trading team to assess risk levels of each customer.
“It can obviously be difficult for traders to distinguish between at-risk punters or someone they can generate a large profit from,” Walton explains. “By taking that responsibility away from the trader as a process, using new technology, you can flag the at-risk individuals.
“One of the things we’ve employed is machine learning, looking at bettor behaviour, to flag these customers as problem punters. That way you can take that control away from traders and elevate it to a separate team that can flag punters who shouldn’t be betting.”
The US market is forcing a change in how European operators and suppliers do business, with the market requiring “an infinite amount of solutions to cater for all the different opportunities” in order to operate.
“You’ve got casino, online, racecourses, so there’s not one solution that fits all,” Walton says. This has prompted previously online-only service providers to enhance or promote retail solutions. The channel is a “natural extension” of any sportsbook supplier’s offering – and a relatively simple shift.
“The difference is you have to power the hardware with application programming interfaces (APIs) in retail, but if you can develop a solution that caters to different channels, and offer differentiated pricing, it’s easy pickings for software providers looking to reinvent their solution for that channel.”
He also notes that to date, the US has largely offered European companies a retail-first opportunity.
This effectively means suppliers have to step back to move forward, launching a US-facing retail solution before moving into online and mobile as regulation permits. “
So you can effectively take your partners into the future,” Walton says. “It’s a clear way to position yourself and your solution in the US market.”