Fanatics finally has made a US sports betting play.
The apparel company acquired a copy of platform source code from B2B supplier Amelco on top of which to build, LSR understands.
The deal was first reported by Eilers & Krejcik Gaming and confirmed by industry sources.
What is Fanatics acquiring?
The acquisition covers the full sports betting tech stack, including player account management platform (PAM) and sportsbook engine.
Fanatics will pay an upfront fee for the code and an ongoing revenue share to Amelco. In return, Amelco will handle trading and operations, with Fanatics gradually taking control as it builds out its sportsbook ops team.
Fanatics is currently hiring for more than 20 sportsbook roles.
The road well-traveled
Amelco has now sold multiple copies of its source code to US sportsbooks, including:
A big deal
Outside of the US, the likes of Intralot and Hong Kong Jockey Club also build on Amelco.
Sources said it was Amelco’s largest-ever sale, potentially exceeding $100 million over the lifetime of the deal. That said, the actual numbers will vary based on performance and the speed of Fanatics’ development.
Amelco and Fanatics did not respond to requests for comment.
Fanatics has taken its time
The sports apparel giant has not rushed its entry to US sports betting, having talked up its plans for well over a year. It has been linked with various routes into the sector, including deals for PointsBet and WynnBet.
The company could also have worked out more traditional B2B deals with Kambi and Strive Gaming, its partners in its New York sports betting bid. However, the company chose to own its technology, in line with its previous rhetoric about long-term thinking.
Fanatics CEO Michael Rubin said recently: “We can be the No. 1 player in the world in[sports betting] in 10 years.”
Of course, bringing technology in-house tech also creates challenges. The aforementioned Amelco-powered brands have not made a huge impact yet on the US market, although none have anything like the resources of Fanatics.
The transaction also means, Fanatics will need to work out its own market-access deals.
However, the company has time and money on its side. It is privately-owned and recently raised $1.5 billion at a $27 billion valuation.
The company also has a database of some 80 million customers, although how it will market sports betting to them is an open question. As for leadership, the Fanatics Betting and Gaming division is led by respected former FanDuel CEO Matt King.