How the Allwyn-Kambi source code model will be structured

Kambi CEO Werner Becher and CFO David Kenyon have explained the details of the supplier's one-of-a-kind deal to sell its sportsbook source code to Allwyn. Unlike Kambi's previous agreements, this is less a straightforward supplier-operator partnership, as the company has decided to grant the operator a perpetual global licence to its technology offering. 

The partnership entails consideration of approximately €50m ($55.9m) between 2027 and 2030. In return, Allwyn is provided with the capability to develop its own sportsbook platform, with a plan to transfer a small team from Kambi to support the platform’s ongoing development. 

The agreement is the first of its kind for the sportsbook supplier, which has previously partnered with other operators to power their platforms. Kambi has partnerships with Quinnbet in the UK, Olimpo.bet in Peru and Pickwin in Mexico, to name a few.   

A compelling opportunity

This modus operandi was further emphasised by Becher at SBC Lisbon. Speaking to Global Gaming Insider back then, Becher said: "For many years we had a discussion around whether operators should continue to outsource their sportsbook, or whether they should own it or bring it in-house." He then went on to say that this was "not a discussion anymore," as even the biggest operators were beginning to outsource parts of their odds and risk management. 

Fast forward to today and it seems much has changed. This deal with the lottery-led operator would effectively see the creation of Allwyn's own in-house sportsbook through the use of Kambi's proprietary source code and services. 

Essentially, Allwyn has purchased the supplier's sportsbook source code, allowing the operator the freedom to scale and tailor its offering at any time. During the call with investors, analysts and the media, Becher said: "This source code model could provide an attractive alternative solution to larger operators."

However, the CEO noted that this is not the sort of deal the company is looking to make frequently: "You could see more deals like this in the future; but don't expect one every month!"

What happens now?

Following the announcement, Global Gaming Insider noted that Kambi's stock has soared. However, when asked where that leaves the supplier's other operator partnerships, Becher responded: "I've been in touch with our other operators, and I've only received congratulations. As our team working with Allwyn will be ring-fenced, there will be no impact on any other operators."

Moreover, Becher explained that the deal will add value to current partners as more data will be collected for Kambi's network.

Separately, Kambi will provide Allwyn with certain trading services until 2031. However, the executive said: "Kambi's AI trading system lies outside of this deal."

Although building and training a team to transfer to Allwyn will add to Kambi's operating expenses, CFO David Kenyon clarified that the costs are already factored into the approximately €45m to €50m in operating profits. When asked about how this deal will affect personnel, the executives explained that the team set to transfer to Allwyn will be made up of both internal employees and new hires. 

Allwyn’s newly acquired global licence would consolidate its €800m sportsbook operations under Kambi’s technology platform, drastically boosting the B2B provider's forward-looking earnings visibility. 

Certainly, this agreement has created a precedent that future suppliers and operators will surely follow. "We now have another option for large tier-one operators, outside of the turnkey model," Becher concluded.