Kambi boosted by Swedish and US growth in Q1
Sports betting services provider Kambi Group has cited the launch of Sweden's newly-regulated igaming market and its ongoing expansion efforts in the US as among the main drivers of a 28% year-on-year increase in revenue during the first quarter of 2019.
Revenue for the three months to March 31 totalled €21.0m (£18.2m/$23.5m), up from €16.4m in the corresponding period last year.
At Kambi, revenue represents fees received for sports betting services rendered to its operators. Re-regulation in Sweden and Kambi’s entrance into a number of regulated states in the US meant the provider expanded its customer base and generated more revenue as a result.
The supplier currently powers five of the eight sports betting offerings launched in Pennsylvania, with Greenwood Gaming and Entertainment's Valley Forge Turf Club launching during the quarter, while sportsbooks were also rolled out for the mybet and Wunderino brands during the period. It also powers a sportsbook for AB Trav och Galopp (ATG), which is the early market leader in Sweden's newly regulated igaming market, with turnover of SEK1.07bn.
Kambi noted that revenue derived from locally regulated markets in the quarter was responsible for 71% of total revenue, up from 50% in the same period last year.
The introduction of gambling tax in Sweden, alongside new business in the US, meant that Kambi paid more in taxes than last year, with this figure up from €300,000 to €500,000.
Kambi noted an increase in costs across the business, with overall spend up from €14.4m to €18.4m. Staff costs were up from €6.2m to €8.3m, amortisation climbed from €2.0m to €2.2m, while other operating expenses hiked from €6.2m to €7.9m for the three months.
Kambi noted that it expects total operating expenses to increase during Q2 by between 4-6% on Q1, with similar cost growth per quarter forecast for the rest of the year. The provider added that this will ultimately be driven by the speed of regulatory development in the US.
However, with higher revenue boosting Kambi in the quarter, this meant that the provider was able to post an operating profit of €2.6m, up from €2.0m in the previous year.
Profit before tax was also up from €1.8m to €2.5m, while profit after tax increased from €1.5m in Q1 2018 to €2.0m in the most recent quarter.
“Building on our tremendous achievements last year, we continue to reach new heights with Q1 2019 one of our best quarters yet, featuring new customer signings, numerous customer roll-outs and continued financial growth,” CEO Kristian Nylén said.
Nylén cited new partnerships with the Mohegan Sun casino in Connecticut, US, and the relaunch of mybet in Germany as major highlights for Kambi in Q1. The provider will supply an online and on-property sportsbook to Mohegan Sun, with a free-to-play variant already live.
Nylén said expansion in the US market remains one of Kambi’s main strategic priorities and the provider will continue to seek out new partners as more states move to legalise sports betting.
“As expected, the regulation of sports betting state-by-state has been a slow process but one which may pick up in the coming months as states push for legislation ahead of the start of the next NFL season in September,” he said.
“Of more importance is that states regulate the right way. As we have seen in New Jersey, where mobile betting represents 80% of the market, online regulation is key if states are to channel players away from the illegal market into a safe and regulated environment.”
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