US media giant Fox Corp has finally entered the sports betting market. The broadcasting company has announced a sports wagering partnership deal with gaming giant Stars Group, which is a first-of-its-kind in the United States.
Fox Corp, which is owned and managed by American media mogul Rupert Murdoch and his family, has made the largest media investment yet in the US sports betting market by purchasing 4.99 percent of Stars Group for $236 million. Following the announcement, Stars’ shares soared by as much as 11% earlier this week.
As part of the partnership, both companies will jointly launch a new sports betting outlet called ‘Fox Bet’, which will go live later this year. Fox Corp and Stars will offer two products under the Fox Bet umbrella, one will allow customers to play for free, offering them the chance to win cash and prizes by predicting the outcome of sports games.
The other product will join the regulated online betting market in the US, allowing players to place real money bets on the outcome of various sporting events throughout the country, according to the laws and regulations in each state.
Stars Chief Executive Officer Rafi Ashkenazi said offering free-to-play games will attract customers and drive engagement, which will eventually lead to players converting to real money games. Stars aims to establish a leading betting business in the US through a strategic partnership with Fox Corp, Ashkenazi said. Prior to its deal with Fox Corp, Stars Group acquired Sky Betting & Gaming in the UK for $4.7 billion last year.
Stars Group, which operates the world’s largest poker site PokerStars, will obtain an exclusive license to utilize FoxSports trademarks for up to 25 years. As part of the deal, Fox Corp will also allow Stars to advertise on its sports outlets, with the latter paying an undisclosed amount for advertising every year.
Within the next 10 years, Fox Sports can decide to buy half of Stars Group’s business in the US. A combination of online casinos, poker and domestic sports betting could generate added revenue of $9 billion for the media company by 2025, said Eric Shanks, Fox Sports CEO.
This new deal is in many ways similar to Stars’ acquisition of Sky Bet in 2018. After being bought by Stars, Sky Bet became a leading player in the UK online gaming market by capitalizing on its brand recognition and incorporating the most advanced technology into its offerings.
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