Fanatics Buys Code from Amelco, Sign It’s Entering Sports Betting Alone

Posted on: April 15, 2022, 01:59h. 

Last updated on: April 15, 2022, 02:38h.

Fanatics is reportedly acquiring source code from Amelco in what could be a sign the apparel giant is preparing to enter the sports wagering space on its own.

Fanatics founder Michael Rubin (left) seen with NBA Commissioner Adam Silver in 2017. The company is acquiring technology to bolster is sports betting ambitions. (Image: Vox)

Amelco is a UK-based business-to-business provider of technology services to the financial trading, lottery, online casino, and sports betting industries, among others.

Amelco builds bespoke trading and sportsbook solutions tailored to our customers’ specifications,” according to the company. “Our modular scalable solution is suitable for all sizes of business. Customers are able to mix and match modules that best suit their business model.”

Financial terms of the rumored transaction weren’t disclosed. But some sources believe the deal is possibly valued at north of $100 million — making it the largest ever for Amelco. Licensed by the UK Gambling Commission, Amelco has clients around the world. In the US, those include commercial and tribal online casino and sportsbook operators.

Fanatics Sports Betting Ambitions

Fanatics, which was recently valued at $27 billion in private markets, has long held sports betting goals. But in the eyes of some market observers, the company has been slow to act.

After missing out on a New York sports betting permit, the deal with Amelco is the clearest sign to date that the sports apparel behemoth is planning to execute its sports wagering strategy. Moreover, buying code from the British company could signal that Fanatics is willing to enter this realm on its own, rather than using acquisitions to get into the regulated sports wagering game.

The Florida-based company has long been at the center of industry consolidation rumors, including speculation it held merger talks last year with Rush Street Interactive (NYSE:RSI) and Swedish gaming giant Betsson.

The company was also thought to be a potential suitor for TwinSpires — controlled by Churchill Downs. It’s also rumored that Fanatics held discussions with Australia’s PointsBet (OTC:PBTHF) before deciding against a takeover of that operator.

Amelco Code Buy Makes Sense

Purchasing code from Amelco jibes with Fanatics founder Michael Rubin’s view that the company must take a long-term approach to sports wagering — one that includes being mindful of costs.

Acquiring technology meshes with that objective because tech is one of the biggest expenses sportsbook operators face, prompting many to turn to acquisitions to bring tech stacks in-house.

Additionally, Rubin is mindful of other sports betting-related costs — namely the big dollars established operators allocated to promotional spending simply to lure customers with no guarantees of those bettors’ long-term loyalty.

The Fanatics founder believes his company can leverage its existing database of tens of millions of customers to acquire sports betting clients at significantly lower costs than entrenched rivals.