September 23, 2019 Continent 8 Team

Editorial: The impact of the Cloud for sports betting operators (SBC News)

Continent 8’s Head of Solution Architecture Justin Cosnett was featured in SBC News with an editorial focusing on sports betting operators and the cloud. Discussing costs, infrastructure, hybrid models, dedicated options and more, he gives a thorough analysis of utilising cloud solutions.

Justin Cosnett, Head of Solution Architecture

Continent 8: The impact of the Cloud for sports betting operators

Cloud technology comes in many forms. The most well-known are the ultra-scale cloud providers like Amazon’s AWS or Microsoft’s Azure.

The benefits of cloud from these providers are clear. Unlimited compute and storage capability charged on a usage (OPEX) basis. Arguably it’s “cheap” too – I’ll come back to that.

Online gambling companies, as with other online businesses, utilise cloud, and have done for a few years for various purposes; whether test and development or business analytics or content delivery.

Regulation has usually limited ambitions to opt for an “all cloud” model in the past, with the potential cost savings in maintaining, managing and hosting infrastructure encouraging many to consider moving as much to the cloud as they can.

As regulators look at cloud and its potential impact on the future, it’s a topic of discussion we have with our customers, competitors and even internally regularly. After all, Continent 8 has several cloud products, albeit more specifically designed towards the online gaming industry than the ultra-scale providers.

I’d best address the “cheap” statement – cloud provision can mean that an operator doesn’t have to purchase, maintain, manage and host infrastructure.

Usually, no capital expenditure (CAPEX, every 4-5 years) on equipment, reduced internal staffing (or outsourcing) to manage infrastructure, and no hosting and power fees.

In addition, and perhaps the most important part for a sports betting operator, that infrastructure, staffing and hosting needs to be scaled to cover the potential maximum usage.

Examples like a Football World Cup, NFL Super Bowl or UEFA Champions League where the infrastructure must be able to perform and scale to the consumer base. The rest of the time that equipment and staffing, whilst not “idle”, isn’t being used most efficiently.

This is where many chief technology and finance officers will begin a conversation when reviewing cloud migration – the efficiency of “pay for what you use, have limitless availability” is seemingly very appealing.

Note: Ultra-cloud providers are also now providing platform as a service (PaaS) and containerised development tools which can be consumed on demand with no underlying “server” infrastructure interaction at all. Some of this software is proprietary to the cloud provider, with obvious potential cost implications in the long term.

It’s for this reason that Continent 8 initially enabled customers’ journey to the cloud through private cloud connectivity (CloudConnect) several years ago. As discussed in a recent white paper, this connectivity offers financial benefits in reduced cost to Internet Bandwidth and therefore reduced DDoS mitigation costs, and technological benefits in reliable, low latency, private dedicated connectivity direct to the cloud providers network.

Our first customer on this journey was a sports betting operator, utilising (Microsoft Azure EU) cloud for “burst compute” – to provide a scalable infrastructure capability during international sporting events to add scale.

Movement “to Cloud” has been occurring (mainly) in Europe, where operators have either designed a “split” infrastructure capability to enable regulatory adherence and make use of cloud (a hybrid model), or where applicable used cloud in specific jurisdictions. Continent 8 similarly offers “incloud” capability in most European regulatory jurisdictions.

However, cloud should not ALWAYS be considered “inexpensive” – the scale of efficiency will vary dependent upon utilisation, and in fact most enterprise or “heavy” compute and storage consumers can actually spend more over a 3-4 year period than if they used dedicated, hosted equipment.

Cloud usually benefits the smaller operator or new market entrant, or as a burstable commodity available to large enterprises in a hybrid model. The Continent 8 Malta ‘start up Cloud’ being a good example. There are challenges for regulators, as well as compliance officers, in the use of cloud and where data is stored, the service level agreements and its impact on “substance”.

Some of these considerations were covered in previous white papers from Continent 8, and we expect to see further moves in regulation and supplier activity which could change the operating environment in Europe.

As ultra-scale cloud providers “capture” more data and compute through models which encourage data storage upload (for free in many cases), there can be more punitive data download or export models to be considered, and how those models will fare as the NEW cloud customer market starts to shrink.

There is, however, a new dynamic which Continent 8 has been facilitating; the move “from cloud”. Mostly beginning in the USA to fulfil the new regulatory environment – Continent 8 has seen an explosion in operators seeking a non-cloud OR dedicated (private) cloud option.

A combination of new market entrants or software designers bringing “developed in the cloud” solutions, and, previously non or less regulated “Fantasy Sports” providers “grown in the cloud” now need to create implementations in specific states or even facilities.

In many cases these companies do not necessarily have in-house skills or experience in procuring and managing and hosting production online gaming infrastructure, and so are looking to either bring in these skills or seek services from providers to produce a “cloud” experience on dedicated infrastructure.

Continent 8 meets this USA challenge with our private cloud solution, we take a customer’s cloud requirements (compute, memory and storage) and translate them into a fully managed dedicated infrastructure stack which is hosted and powered in a suitable environment.

This solution enables customers to concentrate on running the software and virtual instances, whilst Continent 8 managed the hardware infrastructure; including storage, maintenance, break-fix, networking and monitoring.

Combining this private cloud solution, with private connectivity to public clouds, customers are still able to reap the benefits such as data upload, whilst maintaining regulatory adherence to service this new market avoiding punitive data download.

In summary, any sports betting operator not already utilising cloud is likely a minority or soon will be. However, the move to cloud isn’t necessarily an end result, and care should be taken to ensure that access to assets and the ability to move them to another supplier or even to dedicated hosted equipment should be considered or even maintained as an option when reviewing spend and future development.

Read the editorial on SBC News.