Rethinking Platform Technology for Modern Operators

Pragmatic Solutions CEO Ashley Lang explains how a strategic reassessment of platform technologies can deliver operators the speed, quality and flexibility they require to stand out from the crowd

Editorial published in 5 Star iGaming Media Magazine, Issue 1, January 2025.

In the fast-evolving world of iGaming, platform technology serves as the foundation for growth, innovation, and operational success. For online gaming and betting operators, defining the right platform strategy is a pivotal decision - one that can influence their ability to adapt to new markets, respond to emerging trends, and deliver exceptional player experiences.

With this in mind, what are the key considerations for operators looking to navigate a spectrum of options for their platform strategy? As market and customer trends shift, can a review of the limitations of traditional platform models deliver greater flexibility, customisation, and efficiency?

This feature explores how operators can define a platform strategy that meets the demands of the modern iGaming landscape. It examines the strengths and weaknesses of in-house, third-party, and hybrid models, offering insights into how operators can align their platform technology with their business goals to achieve sustained success.

In-house, third-party, or hybrid?

When developing a platform strategy, iGaming businesses often face a fundamental question: should they build their platform technology in-house or license it from a third-party provider?

The in-house model enables operators to create a highly customised platform tailored to their specific needs. While this approach offers significant control, it demands substantial investment in development resources, expertise, and ongoing maintenance.

On the other hand, the third-party provider model involves licensing a pre-built platform from an external vendor. This approach delivers faster time-to-market and is generally more cost-effective. However, it comes with significant limitations, such as licensing restrictions that can hinder an operator’s ability to adapt quickly to market changes, expand into new regulated jurisdictions, and innovate with new features or integrations.

Recognising the challenges of both approaches, Pragmatic Solutions advocates for a third, hybrid option: the "CPU model." This strategy combines the best of both worlds by integrating third-party solutions with in-house development.

The CPU model takes inspiration from computing, where the Central Processing Unit (CPU) acts as the core of a system, handling critical but standardised functions efficiently. Similarly, this model positions the platform as the foundation of an operator’s technology stack, focusing on essential services such as account management, compliance, and bet processing, while enabling seamless integration of third-party services.

This hybrid approach strikes an optimal balance between customisation and efficiency, empowering operators to build a platform strategy that meets their unique business needs while retaining the flexibility to adapt and scale.

The CPU model offers several key benefits, including lower upfront costs, quicker market entry, and a shared master codebase that evolves with the needs of other operators in the network. These elements contribute to long-term future-proofing and ensure operators can scale effectively. In fact, there’s no upper boundary to its capabilities in production environments.

To support operators in evaluating platform strategies, Pragmatic Solutions has published white paper that compares the traditional “forced” ecosystem and CPU models in detail. While the document provides an in-depth analysis, the key considerations outlined in this article offer a foundation for making informed decisions.

Forced ecosystem challenges

Forced ecosystem models, prevalent in both in-house and third-party platform technologies, present significant challenges for operators. Operators who license platforms built on these legacy models often face substantial limitations, particularly when adapting to market changes or integrating a mix of best-in-class multi-vendor and proprietary technologies. These integrations are frequently difficult, unsupported, or in direct conflict with the commercial interests of the platform vendor, leading to frustration for operators.

In many cases, contractual restrictions further compound these challenges, limiting the operator’s ability to integrate preferred third-party solutions. Technical barriers and vendor-imposed constraints force operators to rely predominantly - or even exclusively - on the products and services offered by the PAM platform vendor. Unfortunately, these vendor offerings are often not market-leading, leaving operators at a competitive disadvantage.

By contrast, the CPU model, though still a licensing-based approach, breaks free from the restrictions of forced ecosystems. It provides operators with the flexibility to enhance their platform with leading third-party products or custom developments. This approach allows operators to build a tailored technology stack that aligns with both their immediate priorities and long-term business goals.

Seamless integration and scalability

With its API-first, modular design, the CPU model offers operators seamless integration with both proprietary and third-party applications. This means that  businesses have the flexibility to customise their offerings with the integration of local content providers and address market-specific regulatory requirements.

By adapting to local conditions, operators can deliver an experience tailored to each market. This flexibility is essential in the iGaming industry, where swift adjustments are needed to respond to new regulations, market trends, and player preferences.

Furthermore, the CPU model stands out for its stability and scalability. Designed specifically for its intended purpose, the platform leverages containerization and the elasticity of cloud hosting environments to scale efficiently. As a result, there are no upper limits to the platform's capabilities in live production environments.

Data security

A common misconception is that owning a platform inherently provides superior security and data protection. In reality, effective data security hinges on the ability of technology and development teams to implement the latest security measures. This is best achieved through integrating best-in-class services and maintaining strict adherence to established data security protocols.

The CPU model is designed with advanced data security in mind. Its architecture ensures that each licensed platform operates within a dedicated instance hosted on a secure virtual environment, such as AWS. This setup allows operators to maintain control over their security policies while ensuring compliance with regulatory requirements.

By safeguarding data integrity and minimizing the risk of breaches, the CPU model delivers a critical advantage in an industry where data protection is both a regulatory and reputational priority. This robust security framework enables operators to focus on growth and innovation with confidence.

Cost efficiency

Cost efficiency is a critical consideration for operators when defining their platform strategy. Building an in-house platform entails significant upfront investment and ongoing maintenance costs, often redirecting valuable resources away from core business priorities. In contrast, licensing a platform from a third-party provider offers a more scalable approach, with costs aligned to the platform’s revenue generation, enabling operators to better manage expenses as their business grows.

The CPU model further enhances cost efficiency by reducing operational overheads while allowing operators to prioritise customer experience and product innovation. By relieving the burden of in-house platform development, this approach enables operators to allocate resources towards strengthening their market position and driving competitive advantage.

A new approach

As operators increasingly recognise the benefits of the CPU model, many are shifting away from the constraints of forced ecosystems towards platform strategies that empower them to take full control of their technology.

For some, this transition demands a shift in mindset - from a reactive approach of managing frustrations and making do with existing systems to a proactive strategy focused on creativity and long-term planning. This involves identifying core business priorities and aligning them with the right technological solutions to gain a competitive edge.

Fortunately, this shift represents a positive evolution, and Pragmatic Solutions is committed to supporting operators every step of the way. Through consultation and guidance, we help operators navigate this transformation and unlock the potential of a future-ready platform strategy.