With the upcoming launch of Fox Bet, Fox Sports is placing a huge wager on legal sports betting as not only a growth driver for revenue but also for fan engagement and viewership on its platforms.
Fox is partnering with the Stars Group, and will be leveraging that company's existing technology that was used to build the Sky Bet platform in the U.K. The companies plan to launch two Fox Bet products in fall 2019. The official Fox Bet product will let users in states with legal betting place real wagers on different sporting events.
In addition to the companies’ new 25-year commercial agreement, Fox bought a 5% ownership stake in Stars Group for approximately $236 million.
As part of the deal, Stars will get to use Fox Sports branding for new products. and will get access to certain exclusive advertising and editorial integration rights on certain Fox Sports broadcast media and digital assets.
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Fox Sports will receive brand license, integration and affiliate fees, in addition to a minimum annual advertising commitment from Stars on certain Fox media assets. Before the companies hit the 10-year mark of the commercial agreement, Fox Sports has the right acquire up to a 50% equity stake in Stars’ U.S. business.
During Fox’s investor day presentations today, Fox Sports CEO Eric Shanks said that his company will lend its on-air talent to developing both free-to-play national programming and live wagering.
Fox predicts sports wagering in the U.S. will be close to a $7 billion market by 2025, and there will be an additional $1 billion opportunity in marketing and sponsorship. Shanks said Fox found that 27% of Americans would consider using a Fox Sports-branded wagering platform.
“We’re entering the space aggressively, ambitiously, but also responsibly, with great care to respect the interests of both the betting audience and the non-betting fan alike,” Shanks said.
Fox is counting on its name recognition to help it stand out in an already crowded gaming marketplace.