FOX Sports is preparing to make its first major sports betting play after signing a deal with PokerStars parent company The Stars Group.
As part of a press release issued earlier this month, the new partners teased the Fall 2019 launch of two online FOX Bet sports betting platforms. In addition to a free-to-play picks contest which will award cash prizes to winners nationwide, the FOX Bet flagship will be a real money online sportsbook operated in regulated American markets.
The press release included comments from Eric Shanks, chief executive officer, and executive producer for FOX Sports, on the company’s attempt to capitalize on statewide legal sports betting
“FOX Sports is already synonymous with the best live sports events in the country and now we are expanding the way we immerse fans in the sports culture they love.
Digital sports wagering represents a growing market opportunity that allows us to diversify our revenue streams, connect directly with consumers and expand the reach of the FOX Sports brand.”
BetStars Brand Set to Become FOX Bet
FOX Sports paid approximately $236 million for a 4.99 percent equity stake in The Stars Group – a Canadian company formerly known as Amaya Gaming – along with a provision providing the exclusive right to purchase a 50 percent stake at any point over the next 10 years.
Along with the global online poker leader PokerStars, The Stars Group has also operated the BetStars online sportsbook internationally since 2015.
In September of last year – four months after the U.S. Supreme Court ruled to repeal a 26-year old federal prohibition on sports betting in every state but Nevada – BetStars entered its first regulated American gaming market in New Jersey.
Rafi Ashkenazi, chief executive officer of The Stars Group, provided further comments on turning BetStars into FOX Bet:
“We believe this strategic partnership uniquely positions us to build a leading betting business in the U.S., which represents one of the most exciting long-term growth opportunities for our company.
Leveraging our proven media partnership strategy with Sky Sports in the UK, we are excited to partner with FOX Sports to integrate wagering into sports media and drive customer acquisition and retention in the U.S.”
Ashkenazi followed up during a conference call with investors by calling the FOX Bet deal a “first of its kind, fully integrated national media partnership for sports wagering in the US.”
FOX Bet is also poised to enter Pennsylvania later this year when the Keystone State adds online wagering to an existing brick and mortar sports betting industry that counts The Stars Group as a licensed operator.
And by virtue of a prior deal with Reno-based Eldorado Resorts, The Stars Group can potentially provide FOX Bet with access to 11 more states: Colorado, Florida, Illinois, Indiana, Iowa, Louisiana, Mississippi, Missouri, Nevada, Ohio, and West Virginia.
Of those, legal sports betting is already available in Nevada, Mississippi, and West Virginia, while Iowa and Indiana recently passed laws of their own.
Stars Group Looks to Replicate Success of Sky Bet
Linking up with FOX Sports will mark The Stars Group’s second major deal with a sports news network, following an April 2018 acquisition of U.K.-based online sportsbook Sky Betting and Gaming (Sky Bet)
In that $4.7 billion deal, The Stars Group absorbed Sky Bet – a subsidiary of Sky News and Sky Sports – and fused the brand with BetStars in jurisdictions like Italy.
Eben Novy-Williams – sports business reporter who covered the FOX Sports deal for Bloomberg – later took to Twitter to compare The Stars Group’s strategy in America to its maneuvering abroad:
“The model here is SkyBet, which Stars bought last year for $4.7 billion.
Sky Bet has heavy emphasis on tech, and grew quickly by utilizing the brand of a regional media giant.”
FOX Bet will follow the successful Sky Bet model by bringing new bettors aboard, and advertising within markets which have yet to regulate, through the upcoming free-to-play pick prediction app.
Robin Chhabra, who was recently named as chief executive officer of FOX Bet, used a conference call with investors to outline FOX Sports’ media penetration among potential bettors. Per Chhabra’s presentation, FOX Sports and its collection of regional networks are viewed in 99 percent of American homes, proliferation which has produced an 80 percent brand awareness rate, and 27 percent of poll respondents reporting that they would “strongly consider” wagering via FOX Bet.