Technology in the US market: To build, to buy or to lease?
They can build a platform in-house from the ground up, acquire an existing platform provider or “lease” a solution from one of the many technology suppliers serving the market. There are pros and cons to each but what, ultimately, is the best solution?
In most cases, this will depend on how big the operator is willing to spend, as well as its desire for control over its platform and its appetite for risk.
We are already seeing the different approaches unfold, with some operators finding success and others having to make an often costly u-turn – Bally’s Interactive and its $125m acquisition and then shuttering of bet.works is a very good example here.
So, let’s take each option and run through the pros and cons.
Build your own platform
The main upside of building your own platform from scratch is the complete control you have over your technology. Because it is proprietary, it can be tailored to the operator’s exact requirements from day one, allowing them to deliver the player experience they want to.
With an owned platform, there is no concern about joining a development queue with other brands using the technology, or innovative features requested by the operator ultimately hitting the wider market and becoming available to others using the platform.
Owned technology also opens the door to mergers and acquisitions, and unlocking tremendous synergies when acquired assets are migrated over to the operator’s tech stack.
The downside to this is that building a robust, modern, compliant platform from scratch is a massive undertaking. You only have to look to the operator giants in established markets such as Europe to see just how long it has taken them to finesse their platforms and at eye-watering expense.
The level of expertise to plan, develop, iterate, test and deploy a platform is almost impossible to put together from a standing start. Then there is the time it actually takes to do this – we’re not talking months, but rather years.
Of course, the greatest risk with this approach is that the technology simply does not work in the way the operator intended to. This can lead to a sub-par player experience, even after tens of millions of dollars have been invested over many years.
Get it right though, and the operator quite literally has a platform for success.
Buy a platform providerBuying an existing technology provider is the middle ground here. Operators that do this gain access to a proven platform and a team of talent and expertise already in place to operate, maintain and develop the platform.
The business is also revenue generating, so operators can chip away at the purchase cost. When they are ready, they can then look to terminate the SLAs they have with other operators using the platform and use it solely for their brands.
DraftKings is a great example of this with its acquisition of SBTech. By acquiring its platform provider, the operator has been able to unlock more flexibility and personalisation, and can push development and innovation in the direction that it wants to.
But this approach doesn’t always work, as evidenced by Bally’s Interactive and bet.works. Operators are not platform providers, so it can be difficult for them to identify the right technology to acquire and also how to develop technology to meet their needs.
Bally’s said the decision to shut bet.works was that the platform was not capable of delivering the player experience required to be competitive and that there were more efficient and nimble solutions on the market that could be leased.
Lease platforms designed specifically for the US market
Partnering with a proven platform provider is perhaps the best option for operators, regardless of whether they are a local operator or one of the industry power players.
There are many upsides to this approach. The technology is already developed and proven and is being constantly developed to meet and exceed ever-changing player expectations. These solutions are also fully complaint and offer the highest levels of player protection.
Operators can run their brands from these platforms without having to build out entire teams of developers and technical specialists and can work with their provider to bring new features and functionalities to their players.
They also benefit from the on-going development of the platform and the learnings of all of the brands running off the technology.
Most platforms offer everything the operator needs to run a successful sportsbook or casino, from odds and games to payments, KYC and customer support. This allows operators to focus their efforts on branding, marketing and customer acquisition and retention.
In the case of Strive and our Infinity Engine, operators can access a PAM that has been developed specifically for the US market and to overcome any challenges operators face. This includes effective bonusing that can deliver a strong ROI.
Our pioneering bonus engine allows operators to send the right bouns to the right player at the right time, based on their unique behaviours and betting activities. This ensures bonuses are highly targeted and deliver true value to the player.
A longstanding land-based and digital gaming industry figurehead, Jamie is responsible for pushing the Strive brand and player services to the next level and beyond. With 25+ years of experience in leadership roles with industry leaders holding roles such as VP of VIP Marketing and VP of Sportsbook.