Fox has paid US$236 million for a 4.99 per cent stake in Canadian gaming giant Stars, as part of a mammoth 25-year agreement in which the US broadcaster plans to launch its own sports-betting division.
Under the terms of the agreement, the companies plan to build two wagering platforms by the autumn. One will include a nationwide free-to-play game including awarding cash prizes to players who correctly predict the outcome of sports games.
The second, which will be named Fox Bet, will be a traditional sports gambling platform made available to customers in states with regulated betting in accordance with the applicable laws and regulations.
Eric Shanks, Fox Sports chief executive and executive producer, said: “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."
Also included in the deal, Fox Sports will grant Stars Group an exclusive license to use a selection of the company’s trademarks for a range of immersive games and online sports wagering applications.
The deal also includes the integration of exclusive branding and editorial rights, of which Stars has agreed to purchase a minimum amount of annual advertising on Fox Sports’ linear and digital assets.
Fox’s agreement with Stars, which last year bought Sky Betting and Gaming for US$4.7billion, saw shares in the Toronto-based company rise by 11 per cent in extended trading, while the company’s overall value rose by 5.9 per cent on Wednesday.
Looking forward, Fox Sports also has the right acquire up to a 50 per cent equity stake in Stars’ US business within the first ten years of the agreement, subject to conditions and gaming regulatory approvals.
Stars chief executive Rafi Ashkenazi said: “We believe this strategic partnership uniquely positions us to build a leading betting business in the US, 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 US.”
Elsewhere, Fox’s rival Disney is looking to integrate betting into its sports programming, however, the media giant has no plans to invest in the gambling industry.
Disney chief executive Bob Iger told investors: “On the gambling front, we have said we would integrate it into our programming, but not to the extent that we would be facilitating gambling as an entity.
“In other words, we will provide programming that I guess will be designed to enlighten people who are betting on sports, but that is as far as we would go.
“I think you will see more of it integrated in the programming but we just don’t intend to go into the gambling business.”