The contract is where the price really lives
Lesson three showed that a quoted rate means little until the revenue base is defined. The same is true of every commercial term. The headline numbers in a supply deal (the rate, the minimum, the term) are agreed early and are often the least contested. The money is decided in the definitions, the exit rights, the remedies and the regulatory clauses that a salesperson may never read. A seller who leaves the contract entirely to lawyers loses value they negotiated hard for, because the lawyers do not know which commercial trade bought which clause.
This lesson works through the clauses that matter in gambling supply agreements, using real agreements that operators filed with the US Securities and Exchange Commission as exhibits. Their prices are redacted, but their structure is public, and structure is what a seller needs to understand. Three are used throughout:
- A 2018 sportsbook supply agreement between a Kambi subsidiary and DraftKings' predecessor, filed in 2020.
- A 2025 amended sportsbook agreement between the same Kambi subsidiary and VIP Play, a smaller US operator.
- A 2024 West Virginia market access agreement between Wheeling Island Gaming and VIP Play, the kind of market access or "skin" deal described in The iGaming Value Chain.
They describe what was agreed between particular parties at particular times. They are examples of structure, not templates or market standards.
Term, renewal and termination for convenience
Term sets the period over which the supplier recovers its integration and certification costs. The VIP Play sportsbook agreement defines its initial period as running from signature to five years after the first live launch, so the clock starts at go-live, not signature, protecting the supplier against the delays described in lesson four. After the initial period it rolls on, and either side may end it on at least 180 days' notice. The Wheeling Island market access agreement runs for an initial term of ten years, reflecting the longer horizon of a licence-holder relationship.
Termination for convenience is the operator's most valuable right and the supplier's biggest risk. The 2018 DraftKings agreement allowed the client to terminate on not less than 60 days' written notice at any time, but made it liable for the cost of third-party services and other committed costs. That pairing is typical: the supplier concedes flexibility and protects itself with cost recovery. When DraftKings later moved to its own platform after acquiring SBTech, an addendum set a termination date of 30 September 2021 and required Kambi to grant reasonable extensions territory by territory where the migration was held up by a gaming authority. Even an exit is negotiated around regulation.
Exclusivity and non-compete
Exclusivity is something operators ask suppliers for, but in sportsbook deals it often runs the other way. The 2018 DraftKings agreement required the client to appoint the supplier as its "exclusive provider" of sports betting services for the term, subject to exceptions. The 2025 VIP Play agreement goes further, with the client undertaking not to offer a "same or similar" sportsbook offering worldwide during the term. A turnkey sportsbook supplier invests heavily in each launch and wants assurance that it will not be replaced market by market.
Exclusivity also has an end date and an after-life. GAN's 2024 annual report describes how its exclusive casino arrangement with FanDuel ended in January 2023, after which FanDuel could use other casino solutions "subject to a requirement to pay us revenue calculated as a certain percentage of their net gaming revenue". A supplier that concedes the end of exclusivity can still negotiate a payment that follows the business it helped build. The same filing shows that exclusivity carries a price premium: GAN attributed a fall in its 2024 B2B take rate mainly to lower contractual revenue rates following the expiry of an exclusivity period with a B2B customer in 2023.
Revenue definitions and deductions
This is the clause that decides the price. The VIP Play agreement defines GGR as total stakes on bets settled in the period "minus total Payouts that are settled in such period", and then defines NGR as "GGR minus" a redacted list of deductions. Its fee schedule calculates the supplier's business fee as a percentage of monthly NGR, with the percentage varying with the cumulative GGR in each contract year, and a monthly minimum guarantee pro-rated for part months. Every element of the lesson three pricing models appears in one schedule.
The Wheeling Island agreement shows how deductions are controlled. Its NGR is GGR reduced by gaming taxes as a pass-through "without mark-up of any kind", and by player incentives and player-related costs, each "not to exceed" a redacted percentage of GGR. The cap matters: without it, an operator that ran heavy promotions could reduce the revenue base, and the counterparty's share, as far as it liked.
Statutory definitions are a useful anchor but rarely sufficient. New Jersey's Casino Control Act defines internet gaming gross revenue as all sums actually received from internet gaming "less only the total of all sums actually paid out as winnings". Contracts usually define their own base because the commercial deductions (bonuses, chargebacks, payment costs, platform fees) are matters of negotiation, not of tax law. A seller should insist that the contract states which deductions apply, in what order, with what caps, and how bonus money that becomes cash is treated.
Service levels and remedies
Service level agreements turn reliability into contract terms. The VIP Play agreement measures availability as A = (T minus D) divided by T, where D is the minutes of downtime in the month excluding excusable causes and T is the total minutes. The definitions of downtime, scheduled maintenance and excusable cause decide what the percentage means.
The remedy is the negotiated part. The 2018 DraftKings agreement stated that the liquidated damages in the SLA were the client's "sole and exclusive remedy" for failure to meet the availability requirements. For the supplier that caps exposure; for the operator, whose sportsbook outage on a major sporting day costs far more than any service credit, it is a significant concession. Operators commonly push for a right to terminate after repeated failures, and suppliers commonly accept it in return for keeping the sole-remedy clause for ordinary misses.
Audit rights and data ownership
When the supplier is paid on the operator's revenue, the supplier needs to check the numbers. The VIP Play agreement allows auditors appointed by the supplier to inspect the operator's records of GGR, NGR, stakes and payouts on at least 48 hours' notice and not more than once in any twelve-month period, with additional audits where a gaming authority or the law requires them. The negotiable points are frequency, notice, who pays (usually the auditing party, unless an underpayment above a threshold is found) and how far back an audit may reach.
Data ownership runs the other way. The 2018 DraftKings agreement provides that all customer data "shall belong exclusively and at all times to the Client". Operators rarely concede ownership of player data. What suppliers negotiate is the right to use aggregated, anonymised performance data to improve products and benchmark performance, which is the basis of the business reviews described in lesson seven.
Regulatory clauses
Gambling contracts carry clauses that ordinary software contracts do not, because both parties' licences are at stake.
Compliance flow-down. In Great Britain, licence conditions require operators to use gambling software manufactured and supplied by holders of a gambling software operating licence, and to contract with third parties on terms that, among other things, enable the licensee to terminate the third party's contract promptly if it breaches the contract or acts inconsistently with the licensing objectives. A supplier cannot negotiate these out; they are the operator's licence obligations. Expect them, accept them, and negotiate the cure periods and dispute processes around them.
Loss of approval and suitability. The VIP Play agreement allows termination where a party is notified by a gaming authority that there is "a reasonable likelihood" that it may lose a gaming approval because of the other party's act or omission, and the problem is not remedied within twenty business days. The Wheeling Island agreement allows either party to terminate if the other, or its licensed officers, directors or shareholders, becomes an "Unsuitable Person" and the problem is not cured within thirty days.
Change of law. The 2018 DraftKings agreement requires a party to notify the other within five business days of becoming aware of a change of law and its anticipated impact, followed by good faith discussion. The 2026 prohibition of fixed-odds betting in Brazil, covered in lesson four, is exactly the event such a clause anticipates; the time to negotiate what happens to minimum guarantees and unrecovered set-up costs is before it occurs.
Regulator approval of the contract itself. Some regimes review commercial agreements. Pennsylvania's gaming law requires the Gaming Control Board to provide for the approval of the terms and conditions of agreements between an interactive gaming certificate holder and an applicant for an interactive gaming licence, which covers market access deals of the Wheeling Island kind. Where approval is needed, the signing date and the effective date differ, and the forecast must use the second.
Change of control and assignment
Acquisitions are one of the commonest reasons supplier relationships end (lesson seven). Contracts address them through assignment and change of control clauses. The 2018 DraftKings agreement prevents either party from assigning its rights or obligations without the other's prior written consent. Operators often seek a right to terminate if the supplier is acquired by a competitor; suppliers seek protection if the operator is acquired by a group with an in-house alternative, typically through termination fees. Regulators add their own clock: the Gambling Commission's published processing time for a change of control application is 12 weeks, which affects when a new owner can make supplier decisions in Great Britain.
Liability, indemnities, payment and disputes
Four further groups of clauses deserve a seller's attention, because each can turn a profitable account into a loss.
Liability caps. Suppliers cap their total liability, usually by reference to the fees paid over a period. Operators push for carve-outs: data protection breaches, confidentiality, wilful misconduct and, in gambling, regulatory fines caused by the supplier's failure. A sportsbook or platform supplier should model what an uncapped regulatory indemnity could cost before conceding one.
Pricing errors and palpable errors. A sportsbook supplier that publishes a wrong price exposes the operator to losses. Contracts allocate that risk: who pays when a bet is settled at an obviously wrong price, and how the operator's own rules for voiding such bets interact with the supplier's obligations. The Betting Models and Pricing course explains how such errors arise.
Payment terms. Revenue-share invoices depend on the operator's own reporting, so the contract should set the reporting deadline, the invoice and payment dates, the currency and conversion rules, interest on late payment, and the supplier's right to suspend service after a period of non-payment. A supplier with many small operators should treat payment terms as a credit risk decision, not a formality.
Governing law and disputes. Most supply agreements choose one governing law and a dispute process, often escalation between executives before arbitration or the courts. In a market where both parties depend on the same regulator, a quiet dispute process that keeps the service running while the parties disagree is worth more than a quick route to court.
The negotiation trade-off table
Good negotiators decide before the meeting what they will trade, for what, and what they will not trade at all. The table shows common trades in a hypothetical content or sportsbook supply negotiation, from the supplier's side.
| Operator asks for | Supplier can give | In return for | Supplier should not give |
|---|---|---|---|
| Lower revenue share | A tier that falls at higher volume | Longer initial term, or placement commitments | A lower rate on the whole volume with no commitment |
| No minimum guarantee | Waiver for the first six months after launch | Agreed launch plan and placement | A permanent waiver with termination for convenience |
| Termination for convenience | Right to exit on notice | Recovery of committed costs and a termination fee that falls over time | Exit on short notice with no cost recovery |
| Exclusivity on new games | A short exclusive window on selected titles | Promotional support for those titles | Category exclusivity with no time limit |
| Uncapped promotional deductions | Deductions for bonuses up to a cap | Audit rights and transparent reporting | An undefined net revenue base |
| Stronger SLA remedies | Termination for repeated failure | Sole remedy for ordinary misses, defined excusable causes | Unlimited liability for downtime |
| Most-favoured-customer pricing | Benchmarking at renewal | Volume commitment | A clause that reprices the whole book whenever any customer gets a discount |
The operator has its own version of this table. A seller who can anticipate it, and who knows what each concession costs the supplier over the life of the contract, can make trades that look generous and are not.
Running the negotiation
A few practices make the difference in gambling supply negotiations.
Lead with the supplier's paper. The party whose template forms the first draft sets the structure of the debate. Suppliers with a standard agreement, kept current with each market's regulatory requirements, negotiate faster and concede less.
Keep a concession log. Record each concession, what it bought and its estimated value over the term. It prevents giving the same thing twice and helps the account team honour the deal after signature.
Involve compliance early. Regulatory clauses cannot be traded away, and a deal that is agreed commercially and then reopened by the operator's compliance team loses weeks.
Know the alternative. Each side's strength depends on what it will do if there is no deal. A supplier with a full pipeline in the same market negotiates differently from one whose quarter depends on this signature, and experienced operators can tell which is which.
The next lesson looks at how relationships with operators are built in the first place, before there is anything to negotiate.