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. 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. Investors seemed to be bullish on Stars, as shares were up 20% in after-hours trading. Fox Corp was up 6% after hours. 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? : Eldorado has a presence in the state with casinos in , 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. : 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. : 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 . : Indiana just legalized online wagering today; the company operates . Iowa sports betting : The state is on the cusp of legal wagering; Eldorado owns Isle Casino Hotel Bettendorf . : The state is on the cusp of legal wagering; Eldorado owns . 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, which FOX likely wants to avoid. 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. This is 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. has started upping how much content it does with sports gambling.<doc-sep>Fox Sports is entering the legalized sports betting arena “ambitiously, aggressively, but also responsibly,” the division’s chief, Eric Shanks, declared during the Fox Corp. investor day Thursday. Fox Bet, a new offering catering to those newly permitted to lay wagers in multiple states after a Supreme Court ruling cleared the path, will be “up and running by this football season,” Shanks said. He did not offer a detailed look at the service, which was made possible by a partnership between Fox and Canadian gambling outfit The Stars Group, which was announced yesterday. Fox will become the first established media company to put its name on betting products aiming to compete in states with legalized betting against companies like FanDuel and DraftKings. In exchange for a $236 million investment in Stars, Fox gets about 5% of the company. Related Story Rupert And Lachlan Murdoch Kick Off Fox Investor Day: The push into betting was among several key points in Shanks’ presentation to Wall Street investors as the company showed off its newly slimmed-down make-up in the first detailed way since the mid-March closing of the Disney deal. That transaction saw two-thirds of Fox migrate to Disney, leaving broadcast, news and sports holdings. (Disney CEO Bob Iger affirmed on Wednesday that the company does not have any plans to explore sports gambling.) Fox Sports chief Eric Shanks Live sports across the traditional media landscape has become a crucial element for anyone with a stake in TV or streaming, and Fox is particularly well-positioned to take advantage of it, Shanks said. “You see it now, or you regret missing it forever,” he said, noting the company will carry the Super Bowl in February and has locked up baseball’s World Series in a long-term deal. “Our rights portfolio is second to none,” he said, describing sports viewing as “the single most essential trend in our business.” In 1998, Shanks said, 25% of the top 100 programs in total ratings were sports. By 2018, with on-demand viewing and streaming redefining primetime, the percentage surged to 88%, with 63 of the top 100 programs being NFL broadcasts. (Fox indicated its view of sports by having lead play-by-play man Joe Buck deliver the introductory “please be seated” announcements today, and even disclosures about “non-GAAP accounting measures.”) For advertisers, Shanks said, “content is essentially fungible.” If brands want to reach incremental audiences, off-network, recycled programming “will always likely be available to you.” On the other hand, “if you want to build reach in chunks of five, 10 or 15 million at a time … Fox Sports is the most powerful option.” One chart that flashed on the screen tallied up total minutes of viewing in 2018, arriving at 615 billion as the total across Fox Sports and its cable siblings, FS1 and FS2. Unspoken during Shanks’ portion (though acknowledged by CEO Lachlan Murdoch and COO John Nallen) was the unloading of 22 regional sports networks as part of the Disney deal. Disney recently sold 21 of the networks to a Sinclair Broadcast Group-led set of buyers, with the flagship YES Network sold back to the New York Yankees, with Amazon and Sinclair also in the mix on that deal, which has yet to formally close. Murdoch and Nallen both reaffirmed that Fox Corp. decided early on in the auction of the RSNs, which was agreed to by Disney as a condition of regulatory approval of the merger, that they would not seek to re-acquire the networks.<doc-sep>BetStars NJ will be rebranded as FOX Bet thanks as part of FOX’s partial acquisition of The Stars Group. The will mark the first we’ve seen a completely integrated media partnership for sports betting in the United States. Initially, FOX will receive just less than a 5% stake in The Stars Group but will have an option to buy half the company’s equity at the 10-year mark. You can signup for the BetStars app which will eventually become FOX Bet here . For FOX, the deal makes sense. It’s a monster opportunity to enter the legal sports betting space, a thriving market that’s expected to skyrocket in coming years, while The Stars Group receives a significant jolt brought by the household brand name recognition of FOX that instantly puts some shine on what had previously been a secondary product in the initial stages of U.S. legal mobile sports betting. The implications of this partnership can’t be describe as anything less than substantial, with FOX Sports’ massive reach and recognizable brand on the surface of a sports wagering enterprise, it’s expected that FOX Bet will immediately become an industry giant upon its launch later this year. That’s the power of having: multiple sports networks a radio presence major sports television rights a substantial social media reach This hypothesis isn’t unfounded, with Europe’s Sky Bet, broadcast and sports wagering merger, having had tremendous success. At the most basic of level, the emulsification of a sports television network and sports betting enterprise means seamless and effortless built-in advertising opportunities, the increase in streaming and television betting content, and the eventual organic integration of sports wagering into live television broadcasts. That last part is particularly big. Brands such as DraftKings and FanDuel are still major players that will continue to compete in this rapidly expanding space, but FOX Bet may quickly jump ahead. Why show up to a party as an outsider when you can just throw a bigger and better party yourself? That said, expect similar union between established media giants and sports betting operators to form in the coming months as both sides look to maximize returns in a rapidly evolving industry, one that’s true ceiling remains unknown. For now, what does this mean for New Jersey legal sports betting? It’s expected that the current app will remain largely the same, both in terms of appearance and functionality, with only changes to its name. Mobile sports betting is also expected to launch in Pennsylvania in the coming weeks, and FOX Bet will likely offer a similar product within state lines, thanks to its pre-existing licensing partnership with Mount Airy Casino.<doc-sep>
Fox is planning to debut a legalized sports betting product in partnership with Canadian gambling company The Stars Group, marking the first time a large legacy media company is branding a betting product. Fox Bet will launch in the fall of 2019, the company said in a statement. Initially, Fox will debut two products, a free-to-play game and a real money wagering platform in states with legalized gaming, which will rival companies such as FanDuel and DraftKings. Fox will invest $236 million in The Stars Group in exchange for about 5 percent equity in the company. The Stars Group rose more than 10 percent after hours and has a market capitalization of about $5 billion. As part of the deal, Fox Sports said it will grant an exclusive license to The Stars Group for the use of certain Fox Sports trademarks to online sports wagering. Prior to the 10th anniversary of the commercial agreement, Fox Sports has the right acquire up to a 50% equity stake in The Stars Group's U.S. business. "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," said Fox Sports CEO Eric Shanks in a statement. So far, legacy media companies that own broadcast rights to sports, such as Comcast and Disney, have stayed in the background with sports wagering. While Disney has considered investing in DraftKings and Comcast Ventures has invested in FanDuel, major media companies have stayed away from fronting the business or marketing branded products. "I don't see The Walt Disney Company, certainly in the near term, getting involved in the business of gambling, in effect, by facilitating gambling in any way," Disney CEO Bob Iger said during his company's first-quarter earnings conference call in February. "Getting into the business of gambling, I rather doubt it." Sports gambling has been legalized in eight states. A total of fifteen states could legalize by the end of the year and 30 by next year, according to Patrick Keane, CEO of The Action Network, a research and analytics company dedicated to sports gambling. Still, mobile betting companies must get licensed and operational after legalization. New Jersey is the only state where there is robust competition for operational legalized sports betting. Thus far, FanDuel and DraftKings account for more than 80% of the New Jersey market. WATCH: How the gambling industry will continue to grow