Fox Sports Buys $236 Million Chunk of Stars Group, Will Be First US Broadcaster to Offer Sports Betting

Posted on: May 9, 2019, 10:17h. 

Last updated on: May 9, 2019, 10:17h.

Shares in Stars Group skyrocketed 11 percent Wednesday on the news that Fox Sports has pledged to invest $236 million for a 4.99 percent share of the the PokerStars parent.

Fox Sports
Fox Sports is set to become the first major US broadcaster with its own sports betting platform, Fox Bet, as it seeks to emulate the SkyBet model in the UK. (Image: Fox Sports)

As part of the deal, the Rupert Murdoch-controlled Fox will have the option to acquire up to 50 percent of Stars Group in ten years’ time. In the meantime, the two companies will jointly launch a Fox-branded online gambling platform, Fox Bet, as the media giant stakes its claim for the emerging US sports betting market.

The deal will also reunite Murdoch with the UK-facing online sports betting giant Sky Betting and Gaming (SBG), which Stars Group acquired last year for $4.7 billion.

SBG’s SkyBet has the largest active user-base in the UK and its growth was driven largely by brand recognition through its relationship with Sky TV, which until recently held the exclusive rights to broadcast Premier League soccer in the UK. Fox Sports is likely planning something similar for Fox Bet.

“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.

DraftKings Tie-In

This is the first time a major US media company has made a direct move for its own sports branded sports betting platform since the fall of PASPA, but the Stars Group will not be Fox’s sole sports betting interest in the US.

In 2015, it invested $150 million to acquire an 11 percent stake in DraftKings, which at the time was only a daily fantasy sports company, but now is a competitor to the Stars Group in the New Jersey online sports betting market.

And while Fox may be the first US broadcaster to embrace sports gambling, there have been clues that others are at least thinking about it.

Late last year, NBC began registering domain names like NBCSportsBet, NBCSportsBets and NBCSportsBetting. It also experimented with broadcasting a live, real-time data and statistics feed for in-play betting alongside January’s game between the Washington Wizards and the Milwaukee Bucks on NBC Sports Washington.

November Launch Planned

According to a joint press release, Fox Bet is expected to launch in November, initially offering two products. A real-money sports betting will operate in states where it is legal, subject to licensing, while a nationwide platform will offer the chance to place play-money “wagers” on sports events for the chance to win cash and prizes, acting as a player acquisition tool.

For Stars Group, the deal will add a further degree of legitimacy to a company that has been accused of being a “bad actor” in America in relation to PokerStars continuing acceptance US real-money players after the passage of the federal Unlawful Internet Gaming Enforcement Act in 2006.