The Stars Group, FOX Sports To Launch FOX Bet: Questions, Answers And Analysis

The Stars Group, FOX Sports To Launch FOX Bet: Questions, Answers And Analysis 1

The integration of US sports media and legal sports betting appears ready to take a major step forward.

The Stars Group (TSG) and Fox Sports announced Wednesday a partnership called FOX Bet that will create apps for both real-money sports wagering and free-to-play contests. Fox will pay $236 million for a stake of just less than 5% in TSG.

The media giant also receives an option to acquire up to 50% of TSG prior to the 10th anniversary of the deal that could stretch up to 25 years. TSG encompasses a broad range of gaming operations, including the BetStars brand in the United States.

The new FOX Bet app

Two sports betting products will launch in the fall, according to a press release from the companies:

  • A free-to-play game with cash prizes for predicting game outcomes of sports games. The free-to-play model also exists through the NBA and other professional sports league apps as a means of providing a less intimidating gateway for novice players into the sports betting experience.
  • FOX Bet will give customers in states with regulated sports betting a chance to place real-money wagers on a variety of sports. This is the real meat of the move for Fox Sports and TSG, as the well-established Fox Sports brand wraps a TSG product without much prior traction in the US sports betting market.

What they're saying about FOX Bet deal

Rafi Ashkenazi, CEO of TSG:

“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.”

Eric Shanks, CEO and executive producer of Fox Sports:

“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.”

Questions & answers about FOX Bet

Today's massive news that shakes up both the entertainment and sports betting industries leaves lots of interesting questions to ponder:

What does this mean for BetStars, FOX Bet and NJ

What does this mean for BetStars in New Jersey, and perhaps beyond?

It seems fair to guess that the BetStars brand is going to be retired in US markets in exchange for FOX Bet. The BetStars brand has definitely underperformed in the NJ market, by all accounts, losing out in a major way to the likes of DraftKings Sportsbook and FanDuel Sportsbook.

BetStars is one of a number of operators that has lagged behind those two in the early days of NJ online sports betting, although its not for the lack of a quality product. Clearly, the FOX Bet brand will carry far more weight in US markets than BetStars.

It's also interesting to note that FOX Sports led a round of funding in DraftKings and took equity in the company back in 2015.

So where else will we see FOX Bet?

Other than NJ, it's not exactly clear where FOX Bet might be deployed in the short term. But The Stars Group had a deal in place with Eldorado Resorts for sports wagering in every state where the latter is located.

Based partially on that information, here are other possibilities:

  • Nevada sports betting: Eldorado has a presence in the state with casinos in Reno, so is it wild to think the app could eventually be deployed in the home of legal US sports gambling?
  • Pennsylvania sports betting: BetStars had plans to deploy in PA via a deal with Mount Airy Casino Resort. PA online sports betting should launch any day.
  • West Virginia sports betting: Eldorado owns Mountaineer Casino, and WV online sports betting is already legal.
  • Indiana sports betting: Indiana just legalized online wagering today; the company operates Tropicana Evansville.
  • Iowa sports betting: The state is on the cusp of legal wagering; Eldorado owns Isle Casino Hotel Bettendorf.
  • Other states: Eldorado also owns casinos in several states that are working on legalization of online wagering, including Ohio, Louisiana and Colorado.

Why did FOX only take 4.99% of Stars Group?

The number — a hair short of 5% — is obviously a figure arrived at with something in mind.

The belief is that the small figure will allow FOX to avoid intrusive investigations from regulators on the gaming front. A larger piece of the company could trigger FOX being treated like a gaming entity.

Of course, if it exercises the option to take 50% of Stars down the road, then that's exactly what will happen. But that's a problem for another day.

What does this mean for FOX Sports Net and betting?

Well, it would be pretty great if FOX Sports still owned the regional sports networks — FOX Sports Networks. But it doesn't.

The RSNs were sold as part of Fox selling off its entertainment division to Disney. In turn, Disney just sold the networks to Sinclair Broadcast Group.

FOX Sports, therefore, is going to launch their own national brand in a piecemeal, every-other-state-here-and-there fashion, without the RSNs. That's difficult to square, given that the Disney deal for 21st Century was only just finalized in March.

Unless Fox just developed a taste for sports betting in the past few weeks — and that seems unlikely — holding onto those RSNs would have helped their rollout. There are literally FSN's for both Tennessee and Indiana, two states about to have legal wagering, not to mention others that at least intersect with legal markets now or in the future.

What's this mean for online sports betting more generally?

Well, given the investment of money and effort, we're seemingly going to see FOX Sports and its parent company get involved in lobbying for wide operator access for mobile wagering. That's a formidable new lobbying proponent for that model, which gets some pushback from a lot of corners, including endemic land-based casinos and gaming interests.

FOX is also media brand with all sorts of sports broadcast rights, making it another potential ally — or even foil — to the leagues as they lobby for sports betting regulation. While FOX and leagues may be aligned on some things, Fox is now an operator and may not agree on legislating things like official data and integrity fees.

How much will FOX Bet promote the app and sports betting?

This is an open and pretty big question. While FOX has lots of national properties, sports betting is not at all national in nature, and especially not for how FOX Bet will have to roll out.

FOX does have a daily sports betting offering — Lock It In — that airs on FOX Sports 1. But how much more integration will we see? On NFL broadcasts? Probably not right away. Pre- and postgame shows for any sport? Maybe?

The truly interesting intersection of gambling and sports is streaming of live events. The US sports betting market has barely scratched the surface here, but the FOX deal provides a possible avenue to accelerate that. Could FOX leverage its deals with major US sports leagues to steam games live in its betting app? That would be extremely interesting.

Will any other sports media companies join FOX?

It's difficult to believe this will be the last foray for media companies into the space.

While its footprint and brand obviously pales in comparison to FOX, theScore already has a sports betting partnership and a path into New Jersey.

Not an all-inclusive list, but:

  • ESPN has started upping how much content it does with sports gambling. But with parent company Disney, it's sort of difficult to believe it would get directly involved in becoming a sportsbook.
  • NBC Sports has already shown some interest in the space, and even registered some betting-related domains.
  • CBS Sports has similarly dipped its toe in the sports betting water with its SportsLine product.
  • Comcast has a national reach as well as regional sports networks, and it's been kicking tires on the daily fantasy and sports betting spaces for awhile.

Dustin Gouker contributed to this report.

The post The Stars Group, FOX Sports To Launch FOX Bet: Questions, Answers And Analysis appeared first on Legal Sports Report.

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Andy Nelson

Andy has been writing and posting about offshore sportsbooks for over 15 years. He's also an active sportsbook bonus seeker and seasoned online gambler on US sports.

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