Daily fantasy and sports betting operator DraftKings and B2B sports betting supplier Kambi have reached an agreement to cooperate on DraftKings’ migration from Kambi’s back-end platform services to SBTech’s.
Both companies agreed to work towards a termination date for their partnership of 30 September, 2021, but DraftKings will have permission to leverage its proprietary technology before then.
Kambi will receive full revenue until this date, even if DraftKings migrates earlier.
DraftKings will migrate its operations to SBTech’s platform, after shareholders of Diamond Eagle Acquisition Corp. approved the acquisitions of both companies, and the public listing of the new entity under the name DraftKings Inc. in April this year. The merger was first agreed upon in December 2019.
Kambi chief executive Kristian Nylén said Kambi would support DraftKings if the migration process takes longer.
“We have had conversations with DraftKings about how to support them,” Nylén said.
The two have also agreed that DraftKings will take additional steps during the transition period to safeguard Kambi’s intellectual property.
Commenting on the agreement, DraftKings’ president of global technology and product, Paul Liberman, said: “Kambi has been a collaborative partner and was instrumental in DraftKings being first to market in New Jersey with our sportsbook”.
Nylén said the operator-supplier partnership proved successful for both businesses.
“Since partnering in June 2018, the KambiDraftKings relationship has proven to be highly rewarding for both parties, delivering first-class sports betting experiences to players across more states than any other sportsbook, and establishing Kambi and DraftKings as true leaders in their respective fields,” he said.
“The agreement we’ve announced today works to secure a strong revenue stream for Kambi for the next 15 months, while our growing and exciting portfolio of partners leaves me with no doubt that Kambi is well placed to extend its leadership position over the months and years to come.”
DraftKings is expanding its operations rapidly across US jurisdictions, having recently received a temporary sports betting permit in Illinois, launched West Virginia’s first online casino app, and entered the online casino market in Pennsylvania, all during July this year.
The merged company reported losses of $74.0m for Q1 2020, despite bringing in combined revenue of $113.5m, up $43.5m year-on-year.
Today (24 July), Kambi announced that its revenue for the first half of 2020 ticked slightly upward to €42.7m (£38.9m/$49.5m) in the first half of 2020, despite second-quarter revenue declining 31.6% to €14.8m.