Media giant FOX Sports and The Stars Group (TSG) announced in early-May a partnership that will create FOX Bet. The newly created FOX Bet will provide both free-play and real-money options to residents of states with legal sports betting.
FOX paid $236 million for a 4.99% stake in TSG. Fox Sports will also have the option to acquire up to 50% of TSG after 10 years. The current deal could be for up to 25 years. As part of the deal, Fox Sports will grant an exclusive license to The Stars Group for the use of certain Fox Sports trademarks to online sports wagering.
Rafi Ashkenazi, Chief Executive Officer of The Stars Groups, released a statement expressing how TSG believes this could result in huge growth for both companies. “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.”
The Chief Executive Officer and Executive Producer of Fox Sports, Eric Shanks, agrees with Ashkenazi. “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.”
TSG stock rose more than 10 percent after hours and has a market capitalization of about $5 billion.
What To Expect From The Deal
The two sports betting products are expected to launch sometime in the fall of 2019. Their goal is to be fully operational before the beginning of the 2019 NFL season.
The free-play option will allow participants to predict the outcomes of different sports games with the possibility of winning cash prizes. Their cash feature will act just like a sportsbook. Bettors will be able to place real-money wagers on a number of different sporting events.
TSG already has operations in New Jersey, through Resorts Casino Hotel in Atlantic City. Now Fox Bet needs to find its way into the rest of the states with legal sports betting. TSG’s deal with Eldorado Resorts will certainly be a big help.
– Eldorado has properties in Reno so FOX Bet will have a great opportunity to find its way into the biggest gambling state in the country.
– Pennsylvania online sports betting is expected to be operational within the month. BetStars already has a plan to be up and running in Pennsylvania via Mount Airy Casino Resort. Launching in Pennsylvania before either or both FanDuel and DraftKings would be a huge advantage for FOX Bet.
– West Virginia’s Mountaineer Casino is owned by Eldorado. West Virginia mobile sports betting is currently on hold due to disagreements between technology provides. Although, once it gets back to operational, FOX Bet will have a way to operate in the state.
– Indiana has just legalized sports betting this month, including mobile. Eldorado operates the Tropicana Evansville in the state.
– Iowa has just become the most recent state to legalize sports betting. Eldorado owns Isle Casino Hotel Bettendorf.
– Other states that could soon legalize sports betting that Eldorado has properties include Ohio, Louisiana, and Colorado.
Can FOX Bet Compete With FanDuel and DraftKings?
New Jersey is the number one state right now for mobile and online sports betting. So far, FanDuel and DraftKings account for more than 80% of the New Jersey market. FOX Bet will be looking to make a name for itself that will rival with the likes of FanDuel and DraftKings. Trying to be a third legitimate contender in the market was something that would have been difficult for TSG to do on its own. Now with the help of Fox Sports, TSG can reach a wider market due to the resources they acquire in the deal.
FanDuel and DraftKings have been dominating the market due to their success of attracting a customer base with free promotions and excellent advertisements that reach every market. Fox has the capability to reach an even bigger market and get their product in front of as many potential customers as possible. With their free-play option, FOX Bet can attract a large basis of customers to their application. Once signed up, they will be right where FOX Sports and TSG want them.
About TSG and FOX Sports
TSG provides technology-based product in the gaming and interactive entertainment industries. Collectively, their brands have millions of registered customers throughout the world. They are considered the industry leader in online and mobile betting, poker, casinos, and other gaming-related content. The biggest names owned or licensed by TSG include:
– PokerStars Casino
– Sky Casino
– Full Tilt
– Sky Vegas
– Sky Bet
– Sky Bingo
– Sky Poker
TSG is one of the largest licensed online gaming operators in the world. They currently operate in 21 jurisdictions, including Australia, Europe, North America, and South America. Their goal is to become the number one iGaming provider in the world and with the help of Fox Sports, they have a great opportunity to do so.
FOX Sports represents FOX Corporation’s wide range of multi-platform US-based sports assets. FOX and its brands have the capability to reach over 100 million viewers in a single weekend. The FOX Corporation has ownership of multiple television networks, mobile programming, digital programming, web sites, broadband platforms, licensing relationships, and joint-venture businesses.
FOX Sports includes a number of different television platforms which include, FS1, FS2, FOX Deportes, and FOX Soccer Plus. FOXsports.com and the FOX Sports App provide live streaming of Fox Sports content, instant score updates, statistics, and alerts. Joint-venture businesses include the Big Ten Network and BTN 2go.
They also have a licensing agreement that has established the FOX Sports Radio Network. FOX Sports can certainly help TSG reach an even larger audience. With the two companies working together, they can certainly manage to compete with FanDuel and DrafKings.