Kambi Abios Acquisition: Entering Esports Betting Market

In a press release, Kambi announced the acquisition of Abios, a B2B esports company that provides data, odds, and visualization services to industry operators, including Kindred Group, LeoVegas Group, and Pinnacle Sports, as well as major technology companies such as Microsoft.

Kambi expects the deal to be transformative, allowing it “to offer a best-in-class esports product and expedite Abios’ growth,” and build on “Kambi’s strategy to integrate specialized high-tech trading units into its modularized platform,” per the press release.  

“We’ve been looking for interesting acquisition targets that can complement what we do for a couple of years. We have a quite flexible platform on the front end, in that companies can integrate quite easily to our APIs.” Kambi COO Erik Lögdberg told Betting USA. “But on the backend, it’s more closed, and that’s something we’re in the process of opening up. That made it very interesting when we started talking to Abios as they’re in the process of creating an odds product, and together we can deliver richer and better content for sports betting and esports.”

Can Esports Live Up to the Billing?

There has been and always will be a lot of “next big things” in the gambling universe, from cashless gaming to skill games to esports betting. Of those, esports appears to be on the precipice of fulfilling its next big thing status.

Based on the history in Europe, “esports is likely to be a Top 10 product in the US betting industry,” Lögdberg said. “But the ambition is not just to treat it as a sport, that this deserves and needs different packaging, and maybe even needs different channels to reach a bigger audience.”

That sentiment is not an outlier.

Ted Leonsis, head of Monumental Sports & Entertainment, told an audience at a SportRadar Connect Event in February, “Wait until you see esports, gaming, and betting all start coming together and how big that industry will be.”

In the press release, Kambi intimates the impetus of the acquisition was made with an eye towards the future:

“The esports wagering market is on a steep growth trajectory and is projected to double in size by 2025,” providing the company with a future revenue stream “given the current and latent opportunity in Europe and the United States.”

“The esports category has long been under careful consideration by Kambi, and we now feel it’s the opportune moment to take the next step and build out our capability in what is a vertical of great global potential,” Kristian Nylén, Kambi Chief Executive Officer and Co-founder said. “In Abios, we gain the esports DNA we keenly sought, and which complements the heritage and experience we already possess in sports betting.”

A Perfect Storm for Esports

The acquisition of Abios comes on the heels of Entain acquiring esports startup Unikrn and the launch of a dedicated esports sportsbook in Colorado. These developments signal growing interest in US esports betting on the operator side.

On the legislative side, esports was largely ignored during Wave 1 and Wave 2. Esports wagering was authorized in nine states, disallowed by law in one (Indiana) and by regulations in four others, and left unmentioned in 13 others.

More recent additions to the legal sports betting column have addressed esports betting positively, as no other state has expressly forbidden esports betting. Further, New Jersey has active legislation that would explicitly authorize esports betting in New Jersey, an option other states with ambiguous esports betting laws are likely to explore.

Esports betting “is starting to open up in a few states, but it’s still new, and even in the rest of the world, it’s still in the early days,” Lögdberg said. “The product, the supply chain, the data, it’s all quite immature, so we see huge potential in the general market, as well as inefficiencies in the product and supply chain that can further drive growth.”

And all of this is occurring in the aftermath f the unprecedented shutdown of all major sports in 2020 caused by the COVID-19 pandemic. The improbable shutdown seems to have accelerated consumer awareness and interest in esports betting. During the shutdown, bettors sought out events to wager on and inevitably were exposed to esports betting.

As Lögdberg noted, “People were forced into either esports or table tennis, and many continued even after the return of regular sports.”