After falling short in its bid to enter the New York gaming market, Fanatics finally revealed its gaming plan. Well, part of it.
According to experts, the apparel company plans to build its own online gaming product. The announcement puts to bed rumors it was seeking to buy an online sports betting platform on which to launch its brand.
Fanatics’ gaming direction
The company acquired a copy of the platform source code from B2B supplier Amelco. The deal covers an entire sportsbook engine, player account management, and a full sport betting tech stack.
This isn’t the first sale Amelco has completed. The company has sold copies of its code to US sportsbooks like Hard Rock Sportsbook and Fox Bet.
Fanatics will pay Amelco an upfront fee for the code and establish an ongoing revenue share structure.
Still a long way to go for Fanatics
Fanatics has taken its time when assessing whether or not to enter the gaming space. In a recent interview with Sports Business Journal, CEO Michael Rubin said there were no domestic businesses that piqued his interest.
“We have the team and the capital, but there’s no [domestic] businesses at their current market value that I have any interest in buying. We’ll grow organically and by M&A, but we’re not interested in any M&A in the US — In the US, the companies are losing so much money, they just aren’t attractive acquisition targets for us yet. Overseas, there’s much better businesses that could be interesting.”
Additionally, CNBC reported that the company would most likely remain private through 2022.
Fanatics recently completed its latest round of funding in which the NFL invested the largest amount, valued at $320 million. The company currently sits on a $27 billion valuation.
Although the first part of its strategy has been revealed, Fanatics has a long way to go before customers can begin using its product.
The acquisition means the company will have to work out its market-access deals, similar to DraftKings and FanDuel. Most gaming laws across the US only allow for a specific amount of operators to enter. But there are some, like Illinois, that still have licenses available.
Fanatics has several things going for it; one is its 80 million customer base. The other is leadership. Former FanDuel CEO Matt King leads the company’s betting and gaming division.