2018 Reaching new heights kambi.com Annual report and accounts Kambi is a leading provider of premium sports betting and technology services, driven by its vision to create unique and engaging sports betting experiences for players, together with its customers. Through its data-led Sportsbook core, Kambi not only provides a market-leading user experience, but acts as an incubator for operator innovation and differentiation. Coupled with its range of empowerment tools, enabling operators to control important customer-facing elements, Kambi can springboard visionary sportsbooks to success. Kambi is fully compliant in regulated markets and listed on First North at Nasdaq Stockholm under the symbol ‘KAMBI’. Annual report 2018 and accounts Inside this report Strategic report 04 Kambi at a glance 06 Introduction 08 Chairman and CEO statements 10 Overview and highlights 12 Strategic review 14 Sports betting market 18 The US opportunity 22 Kambi customers 24 Business model 28 Sustainable and responsible business 32 Kambi people 34 Corporate governance 36 Share performance 38 Risk factors 40 Board of directors 42 Senior executives 42 Corporate governance report 44 Directors’ report 46 Financial report 48 Independent auditor’s report 50 Financial review 54 Financial statements 56 AGM and company information 89 Glossary 90 Annual report and accounts 2018 Kambi Group plc Strategic report Strategic report Creating premium sports betting experiences across the globe. 4 Annual report and accounts 2018 Kambi Group plc Strategic report 5 Annual report and accounts 2018 Kambi Group plc Strategic report Kambi at a glance Powering the world’s leading Sportsbooks Kambi delivers the ultimate We have accelerated the success of some The drive and passion of approximately Sportsbook service to more of the biggest brands in the industry. By 700 highly skilled people, working across working in close partnership with our seven countries fuel Kambi with the than 20 online and retail customers, Kambi stimulates innovation, strength of resource to push, and stay, operators across the globe. and guides the co-creation of scalable ahead of the competition. Publicly listed, From our innovative, in-house and unique tools that empower operators licensed and fully compliant in every to develop genuine and exciting sports regulated territory in which we operate, developed software to customer betting experiences – relevant to their Kambi is the first and only choice for intelligence, risk management, business and market. operators with the ambition to lead in their sports betting market. odds compiling, and front-end Active in six continents, our scalable user interface, Kambi leads model demonstrates the most Kambi Group plc is listed on from the front over other sports effective means of excelling in today’s First North at Nasdaq Stockholm international market. As the costs and under the symbol ‘KAMBI’. betting suppliers. complexity associated with developing and maintaining a high-quality and regulatory compliant sportsbook continue to rise, so too does the demand for Kambi’s Sportsbook and services. The results speak for themselves. The number of visionary operators using the Kambi Sportsbook are higher than ever before, having increased more than 50% in 2018. The success of these operators provides clear evidence of its effectiveness and efficiency as a means of operating a leading sportsbook in regulated and competitive markets. 700 passionate and highly skilled people working across seven countries. 6 Annual report and accounts 2018 Kambi Group plc Strategic report Active in six continents, our scalable model is the most effective means of competing in today’s international market. 7 Annual report and accounts 2018 Kambi Group plc Strategic report Introduction Reaching new heights Kambi’s success is predicated The challenge of developing and Entry into the US market naturally on the enjoyment players take maintaining a highly engaging and resulted in increased revenue for exciting sportsbook increases in Kambi. However, the bulk of our growth from our Sportsbook platform. complexity year-on-year and requires the continued to come from the rest of the In order for Kambi and its continuous evolution of technology and world, underlining the solid foundations operators to grow, we realise trading teams. This places rising pressure upon which the Kambi business is built. on organisations which operate their In particular, the rapid development of we must deliver exciting sports own proprietary sportsbook, and makes customers signed during the previous betting experiences to players it extremely difficult for new players to year demonstrates our ability to provide in a safe and responsible way. enter the market. operators with a springboard to growth. At Kambi, the player always Kambi successfully anticipated this The respected Power 50 list – an annual comes first. This has, and always challenge and built a solution which frees ranking of the biggest and most influential existing operators from the constraints gaming operators in the world – now will be, our primary driver. of running the core sportsbook function, features nine Kambi-powered operators. while also significantly reducing the Jumping up from six in 2017, this includes barriers for new entrants. Launched in three customers in the top 10, and 2010, our scalable and fully customisable illustrates Kambi’s ability to attract Sportsbook platform has fast become and retain top tier operators, as well the number one choice for visionary highlighting a trend towards high-quality operators and players across the globe. third-party sportsbooks. We believe this trend will continue, with increased This winning position was reflected in regulation, rising costs, heightened 2018, with Kambi’s most successful year competition, evolving technologies, to date. Our outstanding achievements and changing consumer habits, making included: the addition of a record number Kambi’s services ever more attractive to of customers, recording our highest ever ambitious and visionary operators. revenues, entering multiple new and regulated jurisdictions, and conducting In 2018, Kambi reached new heights, a major roll-out of our retail product. bringing sports betting entertainment to Kambi also played a lead role in a historic millions of players around the world. With moment for the global sports betting the momentum of this success behind us, industry – processing New Jersey’s first we move into 2019 with confidence. legal online bet, following the full repeal of the United States’ federal sports betting ban. historicKambi processed the first legal online bet in New Jersey following the full repeal of the United States’ federal sports betting ban. 8 Annual report and accounts 20172018 Kambi Group plc Strategic report Our visionary Sportsbook is a powerful incubator for innovation and differentiation. 9 Annual report and accounts 2018 Kambi Group plc Strategic report Chairman and CEO statements Chairman’s Statement Lars Stugemo Digitalisation has been However, potentially the most changing the way businesses transformational event of the year was Kambi’s expansion into the US, where operate, consumers behave we took the first legal online bet outside and information is shared. of Nevada following the repeal of the This evolution is pushing country’s federal sports betting ban. Since that historic bet, Kambi has built the boundaries of what we strong positions in the two largest states thought was possible, from to have regulated so far, New Jersey both a technology and product and Pennsylvania. perspective. Moreover, it’s Looking ahead, a combination of drastically raising the bar digitalisation and regulation will see the industry become even more in terms of the end user widespread globally, yet increasingly experience and expectations. local and fragmented. This will place an even greater burden on product and This trend continued in 2018 as digital compliance organisations to deliver businesses across a wide spectrum exciting, localised and regulatory leveraged newly unearthed information compliant products to their customers. to satisfy changing consumer habits – whether that be through the These industry challenges will only development of new products, and/or heighten the appeal of suppliers such as delivering relevant experiences to the Kambi. We are already the number one end user at the right time. provider to tier one operators, reflected in the fact we power the sportsbooks of For Kambi, our end users are the bettors three of the top 10 operators in the world, – the players. As industry innovators, according to the recent Power our focus, as always, is on consistently 50 ranking. providing players with new, exciting and thrilling ways to enhance the viewing of Bearing in mind our proven track record their favourite sports, teams or players, coupled with the industry’s direction of through the provision of a high-quality travel, I believe we’ll be required to create sportsbook to our network of operators. even more entertaining experiences in 2019 and beyond. And if we continue Clearly our capacity to excite and deliver to succeed in bringing excitement to relevant betting opportunities was a players, we’ll naturally deliver growth key driver behind Kambi’s record 2018. to our operators. During the past year, we signed eight new customers – a company record, with the number of players using the Kambi Sportsbook across our expanding network rising by approximately 50%. Kambi now operates across six Lars Stugemo continents, creating local market leaders Chairman in each. And in addition to adding new customers last year, we also continued to renew contracts with some of our major clients, with both Kindred and Mr Green committing to Kambi for the long-term. 10 Annual report and accounts 2018 Kambi Group plc Strategic report A view from the CEO Kristian Nylén When we sat down in 2009 to This was evident in 2018 as Kambi made in Sweden. I’m proud to say we have a write the initial business plan its debut in the US. Kambi’s readiness market-leading retail solution, one which provided the springboard for our partners gives players the same quality they have for Kambi, we took a view on to succeed in New Jersey.