Kambi stock plummets as Fanatics confirms Amelco deal

Investors have dumped stock in Kambi this morning (5 January) after US operator Fanatics confirmed its new sports betting product would be built on source code from Amelco.

Kambi investors were hopeful that merchandising giant Fanatics – which is yet to take a real-money wager in the US – would use the Swedish supplier’s technology to power its sports betting debut.

However, Fanatics betting and gaming CEO Matt King publicly revealed for the first time yesterday that the firm had purchased source code from London-based software specialist Amelco and would use the tech for a sportsbook platform and player account management system (PAM).

King confirmed the news in a hearing with Massachusetts regulators, where Fanatics intends to launch its sports betting operations in 2023. The firm has retail and online aspirations and deep pockets to fund a potential assault on the current US sports betting hierarchy.

King said during the hearing: “It is a proven code base and operating platform in the US, as well as internationally, so we feel very good that we were able to build our business on the back of a world class and proven sports wagering technology.”

However, some on social media have questioned the company’s decision to partner up with Amelco considering the track record of some of the supplier’s other US-facing clients.

.@Fanatics will use the same source code for its sports betting product as:

•Fubo Sportsbook (out of business)
•PlayUp (for sale, under lawsuit)
•Fox Bet (still in business? does anyone know?)
•Hard Rock Sportsbook (live in 4 states) https://t.co/F6F31BxF4s

— Sam McQuillan (@sam_mcquill) January 4, 2023

Fanatics’ intention to partner up with Amelco was first reported by Eilers & Krejcik Gaming and confirmed by Legal Sports Report in April, although the company denied the deal at that time.

I believe this is the first time Fanatics has publicly confirmed it is using Amelco's sports betting platform? pic.twitter.com/uUz4h7sCkT

— Brad Allen (@BradAllenNFL) January 4, 2023

Kambi investors were holding out for hope that Fanatics would become a top-tier US client for the supplier, which has already lost DraftKings to a proprietary solution and is this year set to lose Penn Entertainment’s Barstool Sportsbook following a migration.

The stock dropped by nearly 13% in early trading as a result, wiping out 11% of its market cap in the process.