Kambi Addresses Takeover Rumors Amid Speculation of Acquisition by Genius Sports

Kambi, a prominent sports betting services provider, recently responded to growing rumors about a potential acquisition by Genius Sports, a major player in sports data and technology. The rumors intensified following recent developments within Kambi, sparking widespread speculation in the media. However, both companies have issued statements refuting the claims of any takeover negotiations.

Kambi’s Response to Takeover Rumors

On Wednesday, Kambi addressed the rumors circulating about a possible acquisition deal involving Genius Sports. In response to the ongoing speculation, Kambi Chairman Anders Ström issued a clear statement, denying any discussions or negotiations regarding a takeover. “While Kambi tends not to comment on rumor and speculation, I can confirm that Kambi is not engaged in any such discussions,” said Ström, aiming to quash any misinformation in the media.

The rumors began to gain momentum after Kambi adjusted its financial outlook for 2027, causing a stir in the industry. In July, the company’s Board of Directors made the decision to nullify its previously released revenue projections for 2027. This decision was attributed to the company’s underperformance in key markets, which was impacted by regulatory challenges. While Kambi did not explicitly mention the markets that contributed to this underperformance, one significant factor was the delayed regulation in Brazil, which had a substantial effect on the company’s potential revenue streams.

Kambi had originally forecasted that its full-year revenue for 2027 would fall between $324 million and $540 million. By comparison, the company’s revenue for the fiscal year 2023 amounted to $187.2 million. The revised outlook led to further uncertainty, which in turn fueled speculation about the company’s future, including the possibility of a takeover.

In the wake of Kambi’s inability to meet its expected targets, there were notable changes in the company’s leadership. Former CEO Kristian Nylén resigned from his position after the company’s disappointing performance. However, Nylén has not completely severed ties with Kambi and continues to serve in an advisory capacity. The leadership transition saw the appointment of Werner Becher, a former executive at Sportradar, as the new CEO. Becher’s extensive experience in the industry is seen as a potential asset in steering Kambi through its current challenges and toward future growth.

Genius Sports Denies Involvement in Takeover Discussions

In addition to Kambi’s response, Genius Sports also addressed the takeover rumors, firmly denying any involvement in such discussions. CEO Mark Locke released a statement in which he dismissed the speculation as unfounded. “As policy, we do not comment on unfounded and ill-informed rumors,” Locke said. “To prevent any further speculation, we can confirm that we are not involved in any discussions of this nature with Kambi.”

The denial from both companies appears to put the takeover rumors to rest, at least for the time being. Nonetheless, the media attention surrounding the potential acquisition reflects the volatility and competitive nature of the sports betting industry, where mergers and acquisitions are not uncommon as companies seek to expand their influence and market share.

Amid the speculation, Kambi has been making strategic moves to bolster its position in the North American market. Recently, the company extended its partnership with Rush Street Interactive (RSI), a well-known online gaming company. The extension ensures that Kambi will continue to provide its sportsbook platform and core trading services for RSI’s proprietary platform, maintaining its presence in a key sector of the sports betting industry.

RSI, which operates in 15 U.S. markets, relies on Kambi’s platform to power its sportsbook offerings. In addition to its presence in the United States, RSI has also expanded into international markets, including Ontario in Canada and several Latin American countries such as Colombia, Mexico, and Peru. This partnership extension further solidifies Kambi’s influence in the rapidly growing sports betting industry, particularly in North America, where the demand for online sports betting services continues to rise.

Kambi and Genius Sports have both taken steps to clarify that no takeover discussions are underway, despite the media speculation that suggested otherwise. Kambi’s recent financial challenges, leadership changes, and the revision of its revenue targets may have fueled these rumors, but both companies have decisively denied any current negotiations.

Source:

”Genius Sports and Kambi deny rumors of a potential merger”, sbcamericas.com, September 04, 2024.