Why online sports gambling is turning int

The teams line up, the whistle blows: the game is on. Every fan is laser focused on the action in the stadium. Well, maybe not every fan. Today, there is a growing number for whom the outcomes of a game play out in two places—one on the field and one on the screen of their phone. Whether you want to place a bet on football, basketball, soccer, or even professional ping-pong, if there’s a final score and a sanctioning body, you can probably use the internet to wager on it.

Sports betting went online alongside shopping and newspapers in the 1990s, with one small hangup: It was illegal in the United States. Committed American bettors could still place wagers, but the practice required a variety of extra-legal technological workarounds. In 2018, though, the United States Supreme Court declared the Professional and Amateur Sports Protection Act unconstitutional, opening the floodgates to legal online and mobile sports betting in the U.S. Since then, there’s been a gradual, state-by-state loosening of restrictions around sports wagering, fueled by pent-up consumer demand and revenue-hungry local governments eager for a piece of the action. So far, 11 different states have passed laws making it legal for their residents and visitors to bet on the outcomes of sporting events.

The sudden legalization of U.S. sports betting also created a new, high-stakes competition between a group of ambitious app developers and technology providers. To complicate things further, the game is not being played on a regular field, but one whose markers are state lines—a set of invisible, analog boundaries drawn long before cloud computing was even conceived of. Any online wagering operation doesn’t only have to deliver bulletproof reliability at lightning speeds, it also must remain in strict compliance with a tricky set of government regulations that change from one jurisdiction to the next.

“The rules for every state are different,” says Chris Jones, vice president of communications, at FanDuel, the number one sports betting site in the U.S. “At our peak times we have upwards of 800,000 different active markets on the platform, and we need to make sure every one of those is fair, legal, and fully compliant with each state’s regulatory environment.”

Complying with state regulations goes beyond just making sure a user is in a legally valid jurisdiction. Despite the fact that the internet is largely premised on making your physical location irrelevant, every bit of data that passes between FanDuel’s servers and its users must physically stay within the state where the betting originated. That might sound like a tall order, but if you want to operate online betting in Colorado, your servers need to sit in Colorado, lest you end up sitting in a Colorado courtroom.


Before 2018, most of FanDuel’s U.S. business focused on the “daily fantasy sports” category, a market with looser regulations that’s tailormade for cloud computing. Consequently, for the first eight years of its existence, FanDuel’s entire operation ran in the cloud on AWS. Then, suddenly, the company needed to develop an entirely new software stack while building out a template for a series of proprietary data centers so they could develop new games and enter new markets made possible by the Supreme Court decision. “We started off trying to build them ourselves,” says Shane Sweeney, vice president of information technology for FanDuel. “That meant pricing traditional hardware from vendors, building our own networks and infrastructure, then looking for ways to not only scale, but also to build the same thing again, at pace, in several other states simultaneously.”

The process was a slog. “The traditional route was excruciatingly slow,” Sweeney says. “The lead times for hardware were punishing, then, after it all arrived, it still needed to be built, configured, and tested by hand. We couldn’t even test our software until we had the whole thing set up. It was a mess.”

Luckily, an unrelated technological development was underway at the same time. AWS had been fine-tuning a diverse set of hybrid cloud solutions to extend its reach into on-premises, edge, and even remote or disconnected environments that have historically been hard for cloud computing to serve. One of those solutions, AWS Outposts, was designed to make installing and managing on-premises server capacity simple by offering modular server racks that use the exact same hardware and configurations as in AWS’s cloud data centers, but allowing companies to put them anywhere they wanted.

“FanDuel had a whole crew of infrastructure and dev-ops engineers who were used to working with cloud, but now they were making them work with physical hardware on premises,” says Brian Davidson, senior technical account manager for AWS. “They wanted a single set of tools and APIs that worked across all of their workloads, whether on premises or in the cloud. Outposts ticked that box.”

Because Outposts worked on the same toolset as FanDuel’s existing cloud setup in AWS Regions, it could stand up new services with remarkable speed. “When Outposts was announced in 2018 it sounded like it might be a fit,” Sweeney says. “By the time it rolled out in 2019 we had tried building our own solution and found it to be extremely resource intensive. We did some tests in late 2019, and it all just worked. Our services were up and running on Outposts by early 2020.”

If adding new users provokes a performance hit, we’re sunk. If we start bleeding users, our competition scoops them up instantly. With Outposts we can bolt on new capacity at will.”

Shane Sweeney, FanDuel

The modular nature of Outposts meant FanDuel could scale easily as its user base expanded. “We’ve been growing by 11% a year,” Sweeney says. “But if adding new users provokes a performance hit, we’re sunk. If we start bleeding users, our competition scoops them up instantly. With Outposts we can bolt on new capacity at will.” 

AWS Outposts had another added benefit FanDuel hadn’t been expecting. When servers sat closer to customers it came with significant improvements to latency. Indeed, it’s hard to imagine another industry in which there’s a more direct relationship between service quality and revenue than wagering. During major games, FanDuel processes up to 600 wagers per second, and betting options can change as much as 100,000 times a minute. Downtime can mean losses of more than $500,000 per minute.


Perhaps the most powerful aspect of AWS Outposts and hybrid cloud is that it allows FanDuel to build capacity simultaneously in multiple states without worrying about sourcing hardware, creating custom code, or long configuration times on arrival. “We can build and test code for any given state in our regular cloud environment,” Sweeney says. “Then when the Outposts arrive, it’s just a matter of deploying it out to them. With a conventional data center, we’d be loading, testing, and deploying for a month before we processed a single bet. With Outposts, we can have the servers up and running the same day they’re on site. We just plug them in, and from there the process is seamless.”

That flexibility has allowed FanDuel to stand up in-state services in 11 states in 18 months and prep for the nine new states coming online in the next year—all without taking on additional headcount devoted to build-out, maintenance, and upkeep. In the new high-stakes game of online sports betting, FanDuel is playing to win.