In-house versus outsourcing: Working together for sports betting success

David Bretnitz, Kambi’s VP of sales — Americas, gives his insight on in-house versus third-party tech stacks, and questions whether the ongoing industry debate is as binary as it appears

Should operators outsource their sports betting technology or build it in-house? It is a debate as old as the sports betting sector itself, deeply ingrained into the fabric of our industry.

However, it is a discussion that has become a hot topic once again in recent years, particularly within the US market, even though the binary premise of in-house versus third-party warrants further scrutiny based on recent trends.

The first thing to acknowledge is the myriad of challenges that come with running a high-performance sportsbook. Such technology ranks among the most complex pieces of enterprise and end-user software imaginable, encompassing a vast web of product intricacies, operational processes, offerings, and the regulatory management that accompanies it.

This complexity means not a single operator today handles all sportsbook operations internally. From Apple to Intel, companies in mature tech sectors often turn to third-party suppliers.

In the case of sports betting, every operator, to some degree, employs outsourced services, most frequently in the area of pricing, whether it’s incorporating third-party pricing feeds or utilizing an external same game parlay (SGP) product.

The real question isn’t whether to outsource or keep in-house, but rather to what extent one should outsource? And which elements should they be? This could include platform, odds compiling, risk management, sportsbook front-end, or player account management platforms. The degree of outsourcing varies based on each company’s strategy, but no operator operates today with a 100% reliance on proprietary technology.

Some operators take a limited approach to outsourcing, while others primarily rely on outsourced solutions. Yet some larger US operators have trended towards bringing more elements of their sportsbook technology in-house, this doesn’t imply these giants either need nor want to own all aspects. Bet365, for example, has begun to outsource several aspects of its sports betting portfolio. In the US, the market now appears to be reaching a stage of maturity where it is simply not economical for operators with their own proprietary technology stack to manage all elements of a sportsbook in-house.

These operators are increasingly seeking modular solutions to increase the quality and efficiency of their largely in-house sportsbook, evidenced by several top-tier sportsbooks outsourcing to third-party pricing, SGPs, and micro-markets providers.

Successful operators need to have a strong product throughout the whole sportsbook — from NFL to table tennis. For most, it’s difficult to develop a premium NFL product while ensuring all lower-tier sports and leagues are also market-leading. This is where specialist third-party providers come in, empowering operators to place the time and investments in their box office sports while outsourcing other elements.

This outlook on the future of sports betting informs Kambi’s ongoing product strategy. While our focus remains on pushing the boundaries of our full turnkey sportsbook offer, sought by most operators in regulated markets, we are also providing premium standalone elements for those seeking to elevate their sportsbook offering.

In Kambi’s case, the fact our pricing modules come from within a complete sportsbook with vast amounts of data means we can provide a top-tier product, boosting operators’ revenue potential.

In short, the debate between outsourcing versus in-house isn’t binary. It’s about finding the perfect balance and leveraging the strengths of both approaches. By working with the right partner, operators can build a dynamic and competitive sportsbook to compete at the highest level.

The above article originally appeared in EGR North America