Owners of German sports betting firm Tipico are eyeing potential buyers—Amaya in particular—for the company.
The four owners of Tipico have already instructed J.P. Morgan and Rothschild to look for options for the company including a possible sale, The Wall Street Journal reported, quoting sources familiar with the matter.
According to the report, the owners are hoping Tipico’s growth will attract firms such as Amaya Inc., 888 Holdings PLC and even William Hill. The sources believe Tipico will fetch between €1 billion ($1.12 billion) to €1.5 billion ($1.69 billion), in case of a sale.
Founded in 2004, Tipico offers in-store and online sports bets as well as casino games. The company is considered as Germany’s largest private sports betting company with an estimated €500 million in net revenue.
The operator, whose headquarter are based in Malta, is currently the official partner of Germany’s biggest football club, Bayern Munich. Aside from Germany, the company also has markets in Denmark, Belgium and Austria.
There is a possibility, however, that this pack leader’s high valuation will be undermined by Germany’s fuzzy gambling laws, according to SBC News. Industry experts say Tipico can be considered to be operating in a “legal gray zone,” and this might spook potential buyers of the firm.
The German government has been trying to deregulate its state-betting monopoly since 2008, to no avail. So far, only the German state of Schleswig-Holstein has awarded a number of private online gambling licenses, which will allow operators to operate alongside state-owned Oddset. Tipico was one of the operators to receive the said license.
The remaining states, all 15 of them, originally planned to award seven-year licenses to 20 companies in 2012, but the process was derailed by strong opposition from firms—Tipico included—that weren’t given a license. The case is still pending in the Hesse Ministry of the Interior and Sports.
If this ruckus ends with Tipico walking away with licenses to operate in all German states, it will definitely make the privately-held company a very attractive target for foreign investors who are looking to enter the one of the growing European gambling markets. But that still remains to be seen since it appears that 2015 is not going to be a lucky year for German sports betting operators.