Going in-house: Are the cost savings ever worth it?

Every sports betting and gaming operator would, in an ideal world, like to own their own tech. But for smaller operators at least, is the cost saving appeal something of a myth?

Soft2Bet Product Owner Ivan Piorischin (pictured) discusses the pros and cons of going in-house, the influence of mega mergers on the “cost-savings via synergy” concept, and balancing a dual commitment to servicing external partner operators and in-house brands.

SBC: Recent years have seen some tier one operators bring elements of their platform and back office in-house. Do you expect this trend to continue?

IP: It’s not always that simple. There are some operators who believe that they have the resources and expertise to deliver their own back-office tools, so this trend will likely continue.

We’ve seen various tier one operators deliver in-house games and produce their own platform products in recent years, but this hasn’t occurred across the board or with the success that some of these may have hoped for.

The reality is that dedicated platform providers have more expertise in this area and know how best to deliver the platforms which are best suited to the relevant requirements, having fine-tuned their products over years in the business.

SBC: Is this related to the wider move towards business consolidation and operator mergers?

IP: The current consolidation phenomenon may have a part to play. Mergers tend to have cost-savings via synergy as a key priority and this often means the incorporation of the same platform across many more brands. It’s a logical step but once again, there’s no guarantee that in-house sportsbook and casino platforms will be better than those integrated from outside, even when you have unlimited funds.

Saying that, the trend for mega-mergers seems to be slowing, and the speed of regulation across various markets is picking up. This gives the opportunity for smaller brands to make their mark in less saturated jurisdictions, and there’s no doubt that these operators can take full advantage of outsourced platforms so they can concentrate on marketing and acquisition.

SBC: Soft2Bet has developed a hugely varied portfolio of casino and sportsbook brands using its proprietary platform – what are the advantages of taking such a platform?

IP: Easy integration, flexible design and access to a vast array of content and premium payment technology. We’ve proven across our range of in-house and B2B brands that we can be fully flexible to partner needs and their brand requirements, and new entrants to a variety of markets will find a first-rate platform that can be integrated and launched in no time at all.

SBC: And conversely, what are operators missing out on when it comes to using their own technology? Are the cost-savings ever really worth it?

IP: Cost-savings can be a myth when it comes to delivering in-house tech. Yes, you may save in the long term, but this implies that the platform delivered is to the quality that is required. If players suspect an inferior gaming experience, they’ll be turned off and have no qualms in taking their business elsewhere.

The best approach in our experience is to focus on your own expertise, and with operators this tends to be in marketing and content delivery. In that regard, it could be sensible to take complementary acquisition and retention tools in-house alongside a data-rich outsourced platform.

SBC: And finally, Soft2Bet is a platform provider for external partner operators and in-house brands; how do you balance these commitments when applying updates to the platform?

IP: We’re a client-driven business and never hold back updates which can benefit our partners. If we feel a new launch or platform tweak is ready to go, we’ll release it to our entire network, should they want to. Each and every client has its own demands and requirements which we constantly strive to deliver. 

Some may be bespoke to their operation, but others can be useful across the board, and this network effect can be a major advantage of partnering with a platform provider.