While some jurisdictions like the US have previously banned sports betting and in recent years launched new markets from scratch, other countries like Brazil have been undergoing a more subtle transition, introducing regulation to existing grey markets.

Taking Brazil as an example, the Brazilian betting and igaming market’s net gaming revenue (NGR) was estimated at $2.8 billion in 2023. It is expected to grow at around 18% annually, reaching an NGR of $4.3 billion by 2030. However, although the market is still predicted to grow exponentially, sportsbooks will face a very different reality come January 1, 2025, when operators who fail to secure a gaming licence from the country’s regulator will face legal action and penalties. 

Sportsbook operators wishing to operate in Brazil once the fully regulated market launches on January 1 2025 had to submit their license application by 11:59 p.m. on Monday, September 30. This leaves a 90-day window to transition from an unregulated operating environment into a fully regulated market. But how can operators successfully navigate transitions such as this?

Outsourcing vs developing technology

The first decision operators must make is whether to build their own betting platform or leverage existing tech solutions available in the marketplace. From risk management and odds compiling to feeds and payment gateways, the complexities associated with running a sportsbook are vast, and this decision can make or break an operator’s success.

Robertson says that the complexity and cost associated with building and maintaining a sportsbook lead most operators to either outsource the entire function or take a ‘buy and build’ approach, the latter often being at a high cost. She adds that operators who try to build an in-house sportsbook can struggle to balance the competing demands of scalability, compliance and innovation, making it difficult to stay competitive. 

“Building and maintaining a sportsbook is no easy feat. The technology behind a high-performance sportsbook is among the most complex systems in enterprise software. It requires not just vast operational processes but also advanced product intricacies and regulatory oversight.

“Running a sportsbook at scale is a massive structural and technical challenge, which is why we see so few operators successfully build their own.”

However, even when operators decide to build or purchase their own technology, Robertson says that sportsbooks still tend to outsource to some degree. “This includes specialised areas such as odds setting, trading, bet builder functionality and esports, and is a key reason why Kambi has evolved its own product offering  as the home of premium sports betting solutions, no matter what an operator’s insourcing and outsourcing strategy is.”

Retaining a competitive edge

One of the biggest challenges for operators in regulated markets is facing higher operating costs and stiff competition. In Brazil, once the 90-day transition window commenced on October 1, 89 operators were approved by the Brazilian regulator Secretariat of Prizes and Bets (SPA) to operate during this transition period. In addition to intense competition from regulated, approved sportsbooks that share the same market credentials and credibility in the eyes of prospective customers, operators will also face from January 1 new costs in the form of a 12% tax on gross revenue and between $10,000 and $390,000 in monthly inspection fees.   

Robertson explains what it takes for operators to remain competitive in crowded markets like this: “To be competitive in regulated markets, a high-performance sportsbook needs to put the end user first by nailing the fundamentals.

“Offering relevancy, managing heavy traffic loads during peak sporting events, alongside smooth bet settlement at speed and delivering a strong bet builder with a high degree of combinability across pre-match and live. These are just some of the components that make up a competitive product, but where many sportsbooks come up short.” 

Standing out from the crowd

It is difficult for sportsbook operators to differentiate themselves and stand out from the crowd in these competitive landscapes, where many operators compete for the same prospective players’ attention. For Robertson, the key to success is tailoring a sportsbook to an operator’s specific set of needs in each of these markets.  

“In supporting operators to stand out, we provide the empowerment tools they need to customise and differentiate their offerings. No two Kambi partners need look or feel the same, with a range of tools at their disposal, including full frontend control, price differentiation, odds creation, third-party integrations, and our Kambi Engage ecosystem, which unlocks seamless access to a number of third-party engagement specialists.” 

Managing compliance

Aiding operators with the toolkit to differentiate themselves from the next sportsbook is just one part of the jigsaw, and for Robertson, taking the heavy lifting of compliance off of operators is paramount. “This means staying on top of local regulations, managing day-to-day compliance requirements such as reporting and certification, and ensuring the core sportsbook technology is robust and scalable.”

In fact, Robertson is no stranger to the challenges operators face in markets that are transitioning and introducing regulations. In September, Kambi inked a deal with KTO, one of Brazil’s premier online betting operators, to replace its previous third-party betting platform and power KTO’s sportsbook. The operator was among the first to apply for a Brazilian betting license within the 90-day application period. 

Robertson cites the KTO deal as one of many examples of the value Kambi brings sportsbooks in regulated markets: “Kambi’s platform is designed to be scalable, secure, and adaptable to different regulatory environments. As regulation has expanded across the world, we’ve seen numerous operators switch from their third-party suppliers to Kambi.”

Brazil will be one of many regulated markets where operators use Kambi’s technology. The platform’s global, scalable technology is built to comply with local regulations while ensuring the competitiveness of the offering, turning global knowledge into local competitive power. 

“Our automated offering compliance tool delivers a competitive advantage by ensuring offering compliance in each jurisdiction while optimising the size of the offering. With our vast experience of operating in more than 50 regulated jurisdictions, Kambi is well-positioned to guide operators through this complexity.”

Flexibility and scalability are keys to success

Robertson believes that having technology that allows operators to quickly adapt to dynamic market conditions is key to success in regulated markets. “Only sportsbooks that combine a strong product with scalable and stable technology can compete—and that’s exactly where Kambi excels.”

Kambi’s Turnkey Sportsbook was created to address many of the issues operators face in regulated markets, especially when it comes to managing technical complexity and scalability. As the demand for in-play betting rose and regulation increased, many operators found their in-house tech resources overwhelmed, unable to meet the requirements of a rapidly evolving market. This is where Kambi steps in, offering a solution built from the ground up to handle these challenges. 

“Each of the betting solutions we offer benefits greatly from being part of the world’s leading B2B sportsbook. Our Odds Feed+ is a great example, whereby our vast experience in trading, along with the huge swathes of data we get from millions of bets across our global network each and every day enable us to deliver precision pricing, pre-match and live, on any sporting event from around the world.”

Odds Feed+, Kambi’s full library of odds is seamlessly delivered via a quick and simple API integration through which operators can select a bespoke package of sports and leagues, adjusting on the fly to meet their changing needs. In addition, operators stand to benefit from turnkey services such as bet settlement, offering compliance and trading tools, really putting the ‘plus’ in Odds Feed+. 

“While other suppliers may offer what may appear to be similar products to Kambi, it’s the fact ours are enriched by the role they play in a full turnkey processing such high volumes that sets them apart,” she concludes. 

Though barriers to entry are higher than ever for sportsbook operators, partnering with a supplier that specialises in solving regulation, compliance and operational challenges can prove fundamental. By building features that deliver on the needs of both operators and players, Kambi gives sportsbook operators the confidence and toolkit they need to successfully launch in emerging markets and beyond.