Perfect Sportsbook Platform: Proprietary Development vs. Third-Party Providers

Discussions over whether betting managers should elaborate their own systems or rely on contracted solutions have been a long-standing issue. The argument gained renewed intensity after the US market opening in 2018.

Operators are increasingly investing in proprietary developments, but the issue remains: is it worth it? Smart Money experts analyse the available data to provide the most exact highlights of the pressing problem.

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The Allure of In-House Solutions

The principle that if you are eager to get something done appropriately, you should take care of it personally resonates with many sports betting brands.

High-profile mergers and acquisitions underscore this trend:

1. In 2020, DraftKings obtained SBTech. The deal was valued at $635 million.
2. In 2021, Caesars became an owner of William Hill for $3.7 billion, primarily for its technology.
3. In 2021, Penn National Gaming’s $2 billion acquisition of theScore was influenced by the latter’s ongoing development of a proprietary system.

Nick Maroudas, Kwiff’s Chief Technology and Innovation Officer, acknowledges the intense focus on owning all functional capacities. For many managers, the motivation goes beyond potential financial savings. The control and flexibility provided by in-house tech are significant drivers. They supply relevant data highlights to ensure customer satisfaction and inclinations on the spot.

Andreas Reimblad, Kindred’s Director of Sportsbook, emphasises that oversight was critical in their decision to build an in-house platform. As a result, the brand has achieved exclusive user engagement and an enhanced proposition. The team has witnessed a shift in the niche and its functional ecosystem. With that came the vision of the need for website owners to be more flexible and partner with distinct content creators.

The Complexities of Building In-House

At the same time, the desired control requires a lot of effort. An in-house tech in the most sophisticated gambling vertical may be overly burdensome for many market participants. Everything starts with resource wasting, time spending, and countless attempts to try. History tells multiple examples of even the most prominent players getting their hands on the possibility of building a proprietary system and failing.

The process of an internal sportsbook elaboration is not a simple endeavour. David Bonnefous, Sportnco’s Head of Sales, points out that a betting platform acts as a crucial intermediary between the content developer and a site owner. Its primary task is to add value through enhanced data feeds. Despite the appeal of control and differentiation, the goal is formidable and resource-intensive. Mr Bonnefous notes that developing a sportsbook requires substantial investment, iteration, and effort, often without a guaranteed successful outcome.

A Balanced Approach

Despite the push for in-house solutions, complete self-sufficiency is rare. Jamie McKittrick, Kambi’s SVP for Commercial Operations, argues that the discussion is not a simple binary choice but rather a sliding scale. Most teams outsource at least some aspects of their functions. For instance, even Bet365, known for its proprietary products, looks for certain tasks at third-party companies.

Noah de Villiers from Kambi’s corporate development department suggests changing the essence of the question to focus on the extent of outsourcing. Peter Heneghan, Bettor Capital’s Senior Associate, agrees and notes that while functions such as PAM and trading are often insourced, others like geolocation and specialised products are frequently obtained from third parties.

The discussion between individual and outsourced tech is not just for the giants. Publicly listed operators and industry leaders like Bet365 have indeed set the standard for proprietary systems. However, the market reveals a more nuanced reality. Even large-scale players like Flutter continue to use outsourced services for some brands, while mid-sized companies often find in-house solutions for differentiation.

Kwiff, for example, relies on its proprietary products to offer unique betting features (enhanced odds), which would be impossible with third-party integrations. Mr Maroudas emphasises the benefits of control.

The expert mentioned the critical advantages:

• bonuses customisation;
• enhanced CRM strategies;
• app adaptation to exact specifications.

However, Mr Bonnefous points out that third-party suppliers can alleviate the burdens of local adaptation and legalisation in the global market. Each jurisdiction has distinct prerequisites, and outsourcing services can help entrepreneurs navigate these complexities.

The Main Things About the Source of Tech

The substantial investment and challenges in the project development mean complete self-sufficiency is uncommon. A more sensible approach involves a combination of in-house and outsourced solutions adapted to each brand’s needs.

Key considerations for website owners:

• The control grants customisation and flexibility in product offerings.
• Initial investment and long-term savings should be evaluated before the decision.
• The necessity of developing and supporting the tech should be grounded on the project’s goals.
• Handling diverse legal requirements across destinations to certify operations is critical.
• The balance between technology ownership and financial performance will keep the platform afloat.

Businessmen must carefully evaluate their tactics to find a golden medium of the desire for control with practical considerations of cost, complexity, and scalability. Eventually, the goal is to come up with a resilient and differentiated environment that meets managerial and user needs.

Smart Money is ready to present all the relevant solutions and possibilities for bespoke elaboration as well as third-party installations. The experts carefully analyse each project and come to the best configuration approach. Order top-class casino and betting products from our customer support.

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