Sports betting operator Kambi has announced that it is suspending trading in its shares following a dramatic 30% drop in its stock price.
The crash in stock price followed news that DraftKings, with whom Kambi has an existing relationship, has purchased another sports betting operation, SBTech.
Addressing the concerns of investors and shareholders, the CEO of the Kambi Group, Kristian Nylen, issued a statement about the suspension. The statement said that the firm were aware of the move by DraftKings, but emphasised that they had already established a strong presence in the US market:
“Kambi recently signed a renewed deal with DraftKings and, as per that agreement, we will continue to provide the same high levels of product and service that enabled DraftKings to become a leading player across multiple US states. No notice of termination has been given; should that type of information be given, we will inform the market.”
The stock plunge followed confirmation last week that DraftKings, SBTech and Diamond Eagle Acquisition Corp had struck a deal. The arrangement will see the three operations merged to form a combined sports betting and online casino gaming company. The new operation will be led by the co-founder of DraftKings, Jason Robins. It will also retain most of the management team from DraftKings, including Robins’ fellow co-founders Matt Kalish and Paul Liberman.
DraftKings had established itself as one of the most prominent fantasy sports operations in the US and was ideally situated to take advantage of the new sports betting sector which effectively launched in May 2018. The deal with Kambi had been a significant step in DraftKings moving into the sports betting business, but it now seems that they have outgrown the relationship. It remains to be seen what steps Kambi take to secure their place in the growing US sports betting arena.