Artificial intelligence has been the talk of the sports betting industry over the last year, with operators desperate to learn how to utilize it. At the forefront of the development of AI in sports betting is sportsbook platform provider Kambi, which has a dedicated AI unit. Tzeract is Kambi’s trading division, backed by AI, designed to elevate the sports betting experience. Developed in-house by specialists, Tzeract uses up-to-the-minute machine learning and automation tools to compile odds into feeds with pre-match pricing being margin-driven.
After undergoing its initial stress test during the 2022 World Cup, Tzeract recently partnered with Kwiff to provide its powerful Bet Builder product, marking a significant step forward for Kambi as it continues to expand its range of sports betting services.
In this latest edition of Under the Hood, SBC Americas spoke with Tzeract’s Head of Analytics Business Development, Tomas Ericsson, to learn more about the technology and strategy behind the business, as well as the exciting opportunities it provides operators and end users.
SBC Americas: What technology underpins the Tzeract product division and what makes this AI and ML tech so revolutionary?
Tomas Ericsson: Our product leverages advanced AI and ML technologies to enable both specialization and breadth within and across different sports. What sets our technology apart is its limitless abilities for bet creation and fully automated nature, complemented by the expertise of sports experts who step in when necessary. We provide a language that our partners can utilize to allow players to create and bet on any bet they can formulate in our language, anything from ‘same game parlay’ to more exotic bets such as a six-out-of-ten bet or things we haven’t seen yet.
Partners can innovate and create unique and entertaining user interfaces where the players themselves can seamlessly create these completely new types of bets. Furthermore, our automation enables us to efficiently scale and customize to meet diverse market needs, whether it involves the number of betting offers, the types of bets, preferred data providers, or other specific requirements.
SBC: What impact is Tzeract having on Kambi’s pricing strategy around large sporting events and how does this aid your operator partners?
TE: Same game parlays now account for about half of our Soccer pre-match GGR and are projected to increase further, with more than one in three of these bets being completely unique. Additionally, bet offers like ‘player shots on target’ have become the second most popular bet type during major events for us. With liabilities now spread across millions of different outcomes, we alone manage the complete risk for an event, unlike others who rely on a mix of market copying and manual approaches.
Managing this complexity manually is simply not possible due to the vast number of possible outcomes to be managed. Our platform enables operators to confidently offer these features without worrying about systematic errors exploited by sharp players or excessive liabilities. We detect potential issues and automatically adjust, or in rare cases, suspend problematic offers as needed, ensuring smooth and secure operations delivering sustainable margins.
SBC: While the pricing strategy becomes more effective due to AI content, how does this benefit the player and what tactics do you employ to ensure the player experience is still at the core of your offering?
TE: Really good products allow effortless and efficient iteration, meaning they must be easy to understand and intuitive to use. This principle applies across all industries. The classic sportsbook product has not changed since the days when 1×2 and over/under were the primary options players engaged with. Now, ‘same game parlay’ and player props are the most popular options, with more features to come. The classic sportsbook does not successfully promote the options players really want to bet on.
As we enable operators to innovate and differentiate their products at a low cost, we anticipate sports betting evolving into products that are far more complex in the backend but, at the same time, more intuitive and easier to engage with. These products will better promote the options players want to engage with, aligning with the evolving end-user demand. The player experience has always been at the focus when we develop our solutions.
SBC: How important is the ability for players to customize their bets and how does the Tzeract product allow this?
TE: With more than one in three of the ‘same game parlay’ combinations in the Copa America final being unique, we believe this question answers itself. A ‘same game parlay’ with many bet offers available is no longer a nice-to-have for operators; it is essential to meet players’ expectations and current standards in sports betting. Furthermore, we have tested features that empower both the end-user and the operator even more, and we have received very positive feedback on these innovations. We are confident our platform’s flexibility and customization options will push standards further.
SBC: Data is of course of paramount importance to trading in 2024. How does Kambi leverage data to optimize your operations?
TE: The industry suffers from poor data quality, and in-house data quality improvements are often necessary to reach the required quality in a product. We have streamlined our processes to train models connected to specific data sources, reducing our dependence on any single provider. Since our flow is completely automated, we also enable operators to freely select the data providers they prefer for various events, giving them better control over their product and data costs.
SBC: How does the Tzeract platform integrate into partners’ operations and how do you make this as seamless as possible for partners?
TE: The integration is strictly through APIs, with options to integrate directly into the operator’s sportsbook or to offer stand-alone products embedded in the sportsbook client. We already have two customers who have integrated directly into their sportsbook, taking less than a month by one developer, so the integration is easy and quick. In addition to our APIs, we also offer access to our intuitive UI, the HUB, where operators can seamlessly manage events and settings for the product.
SBC: What can we expect from Kambi and Tzeract from an AI standpoint in the next 12 months?
TE: Let’s first take a moment on what we have done. We have put together a relatively small team of top talents in AI/ML engineering, software engineering, mathematics and sports betting. Over the past two years, this team has developed the platform we now stand on, capable of delivering multiple sports in the classic sportsbook format but not limited to it. Two customers have integrated with us for ‘same game parlay’ products, sharing our passion for innovation, and are now in the process of making more use of our service to explore new offerings and features in sports betting. In parallel, we have powered the pre-match soccer offering for the Kambi network of partners, recently delivering a fantastic service across the Euros and Copa America, delivering on product and margin.
In the next 12 months, we can look forward to several key developments. Firstly, the addition of new sports, with tennis coming soon. Each additional sport will be easier to deliver than the preceding one. We will see innovation driven by collaboration between us and our partners, which we believe will push the bar for the current standard in sports betting.
