GVC and DraftKings, amongst many others, have openly praised the benefits of ‘owning their own technology’. However, what does this actually mean in a specific sportsbook instance?
G3 enlisted the insight of Oliver Niner, Commercial Director at Atlas IAC, to ask how viable this proprietary goal is in the current supplier landscape and whether that which operators aren’t saying about their supply lines is crucial to understanding the B2B architecture?
We’ve heard plenty before about the benefits of owning technology, but is the reality that the tech backends of operators are hugely complicated and reliant on partners at various levels?
Long story short: yes. Worthwhile backends are invariably sophisticated or complex. That’s why we keep their wiring out of sight and under the hood! Of course, complexity can create its own inherent challenges, but it’s also a harsh reality that many operators have overcomplicated backend matters unnecessarily.
Sometimes this is because they take on integrations and other tasks, which they assume will will be straightforward, without fully understanding the backend technological requirements. It’s certainly a scary time to be stuck on a legacy platform where the road to redemption looks long and costly. Even the eventual success stories, such as the merger of Paddy Power and Betfair (both of which ran off OpenBet), was fraught with issues trying to maintain core services for each brand’s client-base while operating from two platforms that didn’t always speak to each other.
Ultimately, the question any operator thinking about doing it themselves needs to ask is: am I a true technologist? If not, it’s better to outsource your plans to the real pros. it’s inevitable that agile, automated tech will take over from heavy, expensive legacy platforms – despite the entrenched relationships that the gaming sector holds in the latter regard. It’s akin the world getting off oil. There are understandable reasons for staying on it. Trouble is, they’re all bad, outdated and will doubtless scupper your long-term future.
I liken it to a film director hiring the best actors but forgetting to write a coherent script. Even the finest improv or innovation skills (whether they come from the operator, supper or broader ecommerce) can’t rescue a dud screenplay, bereft of plot or planning. Which is why we’ve gone to such great lengths at Atlas IAC to create inherently brilliant tech, built on hard-won experience and astute recruitment of the finest minds in the business.
Just take our group leader who has worked on no fewer than 13 platforms in his time. Applying those learnings – from both positive and challenging journeys – gives our team a competitive edge in identifying the modular components that are the key to scalability. Indeed, we’ve staked our business model on this core expertise.
Is ‘taking control of tech’ something shareholders like to hear? Are they interested in hearing the more nuanced side of the story?
I suppose it’s a hackneyed mantra whose shareholder appeal or validity must be premised on the specifics of particular strategy. Which territory are you targeting? How many brands do you have to accommodate? How do you plan to market any given product? All these questions need answers too. Sure, owning your own tech ostensibly allows you to become master of your own destiny. However, that can prove a double-edged sword for death or glory.
Naturally, shareholders want to find the quickest path to sustained and diversified revenue streams. However, that can come at huge expense. Just take a mega-merger company like GVC whose product strategy has been to house everything under one roof. Ultimately, that consolidation of a web of companies was a success, but it came at significant expense and proved a protracted process. Against that, worries over outsourcing have mostly evaporated from our business.
You just need the right company taking the tech controls, without relinquishing too much rein, so that you remain a commercially agile enterprise. Betway, as an instructive case in point, do things their own way but thanks to their Microgaming partnership, they know how to scale. Atlas IAC’s incredibly modular platform, coupled to a flair for understanding the salient credentials of any outsourced team of techies, ensures similar scalability. At the end of the day, that’s what should matter most to shareholders.
Do you have to be proficient in technology to be an efficient operator?
You don’t have to be great at tech to be a successful operator. A company like Kindred Group had a solid long-term partnership with Kambi and has acquired wisely, namely 32Red, while Sky Bet benefitted from excellent corporate governance and being very effective at corralling and controlling their suppliers. Of course, we probably shouldn’t overlook the glaring reality that Sky was in a privileged position to align a betting asset with a media asset – after all, Sky Sports weren’t up against much terrestrial competition for broadcasting live sport.
As you suggest, while they’re understandably not in a rush to talk about them, even Bet365 have notable dependencies outside their prospering operation. This is why our modus operandi at Atlas IAC is so modular. We’re approaching everything from a scalable, self-contained point of view that affords our partners unmatched optionality and adaptability.
Should operators be concentrating on other areas, such as marketing and lobbying?
Absolutely. One of the main reasons for Atlas IAC’s highly-automated software is that it lets companies focus their attentions elsewhere, from value-added risk-management decisions to optimised marketing strategy. Automated CRM is even within our grasp. In fact, I believe high-volume AI systems present a key battleground of the future for marketeers implementing successful strategies. Because we cover the entire sports betting and gaming value chain, we can also offer valuable machine-learning insights around data collection and effective modes of personalisation.
As for broader marketing, the likes of Paddy Power, Bet365 and Sky Bet have provided some of the best and most ingenious campaigns in wider ecommerce. So effective, in fact, that they’ve had to be reined in by regulators! The challenge nowadays, however, is how to make your brand stand out in an increasingly homogenized marketplace for prices and products. After all, this trend towards limited product differentiation will only lead to dilution. Companies like RedZone have shown what can be done by standing out and creating a US Sports niche with direct links between product and market.
Against that, beware the folly of hiring marketing “creatives” who simply don’t understand the industry – just take the glut of 20-something marketeers whose “all you need is LADbible likes” tactics are as misguided as they are uninspired. Challenger brands need more oomph, even if that means daring to be a disruptor by being a bit subversive (cue 1XBet).
At Atlas IAC, we can help you better profile your customers, unpack their motivations and synergistically engage them with insights that speak to their passions. The rest is up to you.