Exclusive: Black Type and Redzone to merge
EGR understands two UK betting brands have signed an MOU with the deal expected to be completed by the end of the NFL season
UK bookmakers Black Type and Redzone are close to agreeing terms on a merger, EGR can reveal.
The two businesses have signed a memorandum of understanding that would see Blacktype acquire Redzone, but with the Redzone principles becoming the biggest single shareholders of the new joint venture.
The deal would see the merged entities operating as one brand, Redzone.bet.
According to a source appraised of the deal, a merger would help “smooth” both firm’s revenues, with Redzone performing strongly in NFL season but seeing less activity in the summer months, and Blacktype seeing similar trends with the racing season.
It is still undecided which platform the combined firm will use long term, with existing partners SBTech and FSB in the running along with other suppliers.
The combined group would have significant trading and pricing resources of its own and is looking for lower platform fees to reflect that.
Redzone currently operates on the Argyll licence in the UK, with Black Type on FSB’s licence, but the combined firm aims to run on its own licence, recently acquired by Black Type.
The combined company will continue to have a services contract with Argyll for areas like marketing and customer services, with Redzone providing specialist pricing and trading services in return.
The deal is also contingent on Black Type being able to raise third funding round, with one source estimating the deal could be completed by the end of the NFL season in February.
Finally, the cash influx will help Redzone expand abroad – in the US specifically – where the firm is aiming to launch a B2B arm to leverage its pricing expertise called Redzone Data.
The firm is understood to be in discussion with several partners already, including US casino chains.
The company will also launch Redzone Risk, a captive insurance arm specialising in US sports contractual bonuses, as another way to leverage its pricing models.
Black Type and Redzone declined to comment.