Why operators are resorting to expert developers: The rise of the betting dev shop

Angstrom’s shift from sports modeling into free-to-play gaming is indicative of how the line between supplier, operator and internal product studio is becoming ever more blurred.
MGM Newcastle Betting
Angstrom was a greatly talked about firm that was not heard from for a long time after being acquired by Entain in 2023. It was mentioned frequently on earnings calls – by Entain, BetMGM and MGM Resorts – but awareness of the business rarely extended far beyond its perception as a key part of the SGP armory.

There was little to be heard from Angstrom himself. But that seems to be changing when the company’s work on developing a free-to-play game called Seven came to the fore in a press release from parent Entain this month.

This is more than a “coming out” for Angstrom’s behind-the-scenes work and offers a glimpse of how betting products are to evolve in the next years.

“If you’d told me – or anyone on the leadership team – a couple of years ago that building a customer-facing, free-to-play (F2P), mass-market app, and creating a brand as well as a product, would be on Angstrom’s roadmap, I don’t think many people would have put that bet.” Ross Jarvis, director of strategy at Angstrom

Autonomous teams led by technology working outside their scope
Entain acquired Angstrom primarily for its US pricing and modeling knowhow and the Seven F2P title looks to take the company a step further, hinting at the potential for specialist B2B firms to evolve into internal ‘dev shops’ – relatively autonomous teams harnessing their tech and domain expertise to build products beyond their original brief.

“The line between providing tech and helping to design the consumer solution is being crossed already,” says Leo Gaspar, founder at Adria Nexus Consulting and former co-founder at Huddle. “The best specialist companies know not only the technology they are selling, but also the problem for the consumer that technology can solve,” he says.

“Once they’ve done that, it’s very natural for them to move further into product development.”

Major operators already have huge technology and product teams but those teams also have to maintain platforms, manage migrations, fulfill regulatory requirements, localize products and do the rest of the technical work that goes into any betting operation.

Some operator platforms are “a little Frankenstein” having been added to and changed over many years, said Marc Thomas, managing director at Algosport. Therefore, an internal development team may spend much of its time “keeping the lights on” instead than developing new products.

“The best ideas start with knowing what’s technically possible before anyone else does.”
Specialists can provide more attention and less organizational dependency. Seven started with talks between Jarvis and Angstrom CEO Jonathan Blezard before Entain greenlit the team. The result was an 18-month development procedure.

Angstrom’s modeling background informed the customer pitch. The prize structure was built on historical English Premier League data, the probability of players scoring first or last and how often users could pick an individual footballer before they couldn’t.

For Gaspar, this concentration of information provides professionals a “unfair advantage” during the exploratory phase. "The best ideas often come from knowing what is technically possible before anyone else does," he explains.

The operator has the assets to develop an experiment into a scaled product: distribution, brands, consumer data, infrastructure and compliance expertise. This enables the specialist to concentrate on the more limited mandate and subject knowledge needed to test an idea before it becomes mired in a broader corporate roadmap.

But obvious tensions develop. Operators often hire specialists for their speed and entrepreneurial mentality, only to impose the systems that hindered the parent organization. Thomas’ advise is simple: “Basically, try and leave them alone.”

He acknowledges that some integration is inevitable but says it should be done step by step. Similarly, integration is distinguished from absorption by Gaspar. “Integration means giving the specialist access to the operator’s assets: distribution, customer insight, infrastructure, regulatory expertise and commercial scale,” he explains. Absorption means it’s part of the next development team fighting for resources inside the same organizational structure.

The first can buttress the company being bought. The second risks wiping out what made it valuable. Gaspar offers a practical test of this: can the specialist still get from an idea to a meaningful consumer experiment considerably faster than the larger organization?

Value of reusable IP
Seven also shows the potential worth of reusing intellectual property. Entain has launched the game initially around Premier League football in the UK but said it wants to move it into other brands, markets and sports. “I’ve also thought about how the first-or-last scorer mechanic could work for touchdowns in the NFL,” Angstrom said.

Gaspar argues that the value of reusable capability is more strategically useful than bespoke development, if it is not just producing the same white-label items.

“You could have one core piece of IP underneath a lot of different consumer propositions,” he explains. The operator becomes quicker and cheaper with every subsequent implementation. “Development is not just another finished project for the supplier, but creates an asset.”

Algosport is feeling comparable pressures, adds Thomas. Its basic products are offered through its Blackbox software, but partners can create other services on top of that technology. The corporation is also regularly called on to change or extend items for particular suppliers and operators.

It’s this flexibility that possibly elevates Algosport from a mere B2B provider to more of a resource or partner for forward-thinking companies,” says.

These arrangements will not always be reflected as direct income, but are of commercial significance. New goods can enhance acquisition, retention, reactivation, customer frequency or differentiation. Reusable technology also could lower development costs and reliance on outside vendors.

Independent suppliers’ risks
There are hazards for B2B enterprises that are independent. A supplier that partners closely with one operator can slowly become a bespoke development team whose roadmap and revenue depend on that customer. Gaspar characterizes the core defense as customizing “the last mile rather than re-engineering the engine for each customer”.

And not all capabilities will be insourced. And even big operators might not be able to justify proprietary development on lower-revenue sports, says Thomas, whereas a supplier with several customers can gain economies of scale.

The betting dev shop, then, finds itself valuable midway ground. It can exist within an operator, be autonomous or exist somewhere in between.

The challenge is no longer about who hires the developers but if operators can collect expert capabilities and eventually turn those into goods that buyers genuinely want.