Why Operators Are Acquiring Companies Like Huddle Instead of Building In-House Solutions

In today’s dynamic sports betting landscape, major operators are increasingly opting to acquire companies like Huddle rather than building in-house solutions. While financial considerations often take center stage in merger and acquisition (M&A) discussions—focusing on multiples of revenue—this strategy is driven by much more than just the bottom line. There are three strategic reasons behind these acquisitions that are shaping the future of the sports betting market.

1. Defensive Acquisition: Locking Down Innovation

One significant reason companies opt to acquire rather than build in-house is to eliminate potential competition. This is a defensive strategy where an operator acquires a company to take their products off the market, ensuring that rivals cannot use the same innovative technology.

In an increasingly consolidated market, gaining exclusive access to innovative products can give an operator a substantial competitive edge. By removing third party solutions from the shelves of competitors, acquiring companies can create a monopoly over unique betting offerings, locking in a significant advantage over rivals.

2. Cost Efficiency and Business Case

The second strategic reason is related to cost-efficiency. Many operators are already paying significant sums to license third party products. From a financial standpoint, it makes sense for these operators to bring these solutions in-house. Rather than continuing to incur recurring costs, a one-time acquisition allows companies to leverage the technology without ongoing licensing fees, making the business case for acquisition compelling.

3. Time to Market and Opportunity Cost

The final and most critical reason behind the acquisition trend is the sheer time it takes to build a solution from scratch. For a tier-one operator to develop innovative solutions in-house, it could take up to five years—an eternity in the fast-moving world of sports betting. By acquiring a company like Huddle, operators can reduce the cost of delay and enter the market much faster with a proven product.

Huddle’s Role in a Consolidating Market

The recent wave of M&A activity has left the market with a scarcity of innovative micro-betting solutions. However, Huddle has emerged as the frontrunner in this space, positioning itself as a leader in the now-consolidated market. As competitors have been acquired, Huddle has continued to step into the void, setting a new standard for operators seeking flexible, robust, and comprehensive micro-betting options.

Huddle’s value proposition goes beyond just micro-markets. What truly differentiates the company from others in the field is its versatile product suite. While some providers have honed in solely on micro-markets, Huddle takes a broader approach. By integrating micro-markets with SGPs, player props, and broader betting markets, Huddle delivers a seamless and comprehensive experience for bettors and operators alike.

We recently had the opportunity to sit down with our co-founder, Leo Gaspar, who provided an in-depth exploration of this very topic. During the interview, Leo shared his valuable perspectives on why companies are choosing to acquire innovative firms like Huddle instead of building solutions in-house.

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