- Looking at the odds makes behind popular sportsbooks, we can see the impact they have I the overall legal sports betting market.
- SBTech was purchased by DraftKings in the acquisition to make DraftKings go public.
- Kambi reported record highs in its quarterly earnings report.
NEW YORK – With sports betting continuing to expand across the country, it’s time to take a look behind the curtain and the companies actually in charge of the odds used by sportsbooks.
Companies like SBTech, Kambi, and International Game Technology (IGT) are the oddsmakers behind some of the biggest sportsbooks in the US and as sports betting grows in popularity across the nation, these entities also see their share of success.
With the trajectory of legal sports betting headed in a positive direction, these entities will only grow in importance and success.
Odds Makers Grow With The Market
SBTech for example is a major player in the legal sports betting arena. The company provides odds for TwinSpires (formerly BetAmerica), Golden Nugget, Oregon’s Score Board app, multiple land-based operations in Mississippi and Arkansas, and will soon be the sole provider for DraftKings.
SBTech’s impact in the industry is massive; so much so that last year’s cyberattack on SBTech affected multiple sportsbooks across several states.
When the oddsmaker goes down, the sportsbook is incapable of accepting wagers and thusly, loses millions in potential revenue because of this.
The relationship between the sportsbook and oddsmaker is a symbiotic one, and sportsbooks have realized this going forward, making deals to secure lifelong partnerships with sports technology companies.
DraftKings was early with the trend. When the sportsbook moved to go public, they merged with SBTech, a move that instantly proved profitable.
“It’s a big milestone for us, and I think in many ways some of the things we went through, the different ups and downs and curveballs, make it that much more special,” said Jason Robins, DraftKings co-founder, and CEO.
SBTech isn’t the only oddsmaker that has benefited from the legal sports betting boom either. Kambi, partner of Kindred Group and oddsmaker for BetRivers and 888Sport has also seen major success in the legal sports betting market.
According to the quarterly earnings report, Kambi has seen record highs in growth for the first quarter of 2021.
During that time, Kindred Group gained market access for California and Arizona, allowing them to launch Unibet in these newfound markets as soon as they launch.
“Going west is truly exciting and the partnership with Quechan Tribe of the Fort Yuma Indian Reservation will grant Kindred access to two key states in the US market,” said Manuel Stan, SVP US, Kindred Group. “California is likely to become one of the largest markets in the world, with yearly revenues expected to pass $2bn while Arizona, is expected to reach $200m yearly sports betting revenues at maturity. Securing early access to these two key states puts us in a great position to prepare a successful launch together with a great partner with a strong local presence.”
As sportsbooks grow and expand in new markets, the oddsmakers also see growth as well. The cycle continues and everyone involved is so far coming out with major wins.
How Do Odds Makers Make Money
What betting fans may be wondering is how exactly do oddsmakers cash in on their products. Essentially, sportsbooks pay the oddsmakers to make the odds.
Sticking with Kambi, the odds supplier currently makes odds for DraftKings, Rush Street Interactive (RSI), and Kindred Group. These sports betting operations pay Kambi a percentage of all revenue gained using their odds.
So the more money the sportsbook makes from betting events, the bigger the cut that goes to Kambi. Kambi’s record high quarter came following record highs in sports betting revenue mainly from the Super Bowl and March Madness.
So, as sportsbooks saw all-time highs in betting activity, Kambi saw big returns kicked back from sportsbooks.
The Future Of Odds Makers
Looking ahead, there will be more states launching their own legal sports betting markets and expanding on markets already in place. This will give even more power to the oddsmakers as they will be providing lines for multiple markets.
There is a slight issue that may arise, as oddsmakers begin creating a monopoly on the market. If all the major sportsbooks only get their odds from the same few oddsmakers, then all the odds will be the same from sportsbook to sportsbook.
This will make shopping the lines, one of the best ways to get in on the action, to become more difficult.
DraftKings combining with SBTech is an example of how this may be avoided, however, as more sportsbooks begin merging with oddsmakers and hosting their own odds, then this would be a non-issue.
Not every sportsbook has the means that DraftKings has to pull a multi-billion dollar merger off as such, so it is interesting to pay attention to how the market will be affected going forward.
For now, however, the one thing that is certain, is that the entire sports betting world is operated by these oddsmakers, and as the market grows, so will they.
Coming from a background in narrative-based writing, Giovanni strives to write stories that will keep the reader engaged. Although he does pride himself in being accurate, how the story is told is also very important to him. When he’s not keeping readers up to date on sports betting laws and legislation, you can find him writing and recording music, playing videogames, or engaged in heated sports debates with his friends.