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While legalized sports betting is becoming more prevalent in the US, many media companies have looked for ways to take advantage of gambling interests. Until now, most of these activities were content-based, but Fox is poised to take another step by launching its own game service this fall, in concert with The Stars Group, a Canadian gaming company with Full Tilt Poker.
From John Ourand's report to Sports Business Daily:
The decision to launch Fox Bet is part of a broad agreement that Fox signed with The Stars Group, which was announced after the market closed today. The plan is to launch two wagering products under the umbrella of Fox Bet. One is a free nationwide game that awards cash prizes to people who correctly predict the results of the games. The other gives the opportunity to place real money bets on sports events in states where the game is legalized.
Theoretically, as more and more states deploy legalized games, Fox Bet is able to capitalize on new markets, including the potential base of free game users. On the other hand, we have already noted the disadvantages of media companies investing directly in similar services. Fox themselves invested $ 160 million in DraftKings, which was sharply reduced less than a year later.
And the move is not cheap for Fox, either:
Under the terms of the agreement, Fox is paying $ 236 million for a 4.99% stake in the Stars Group. Fox has the right to take a 50% interest in the company over the next 10 years. Fox will obtain a trademark license, integration and affiliation fees and a minimal advertising commitment from Stars Group as part of the transaction. In exchange, Stars Group will use the Fox Sports brands to launch the service under a 25-year commercial license. Stars has also obtained advertising and editorial integration rights on certain Fox Sports broadcast and digital media, the company said.
Eric Shanks explained the level of integration that viewers would probably notice:
"There will be places like our FS1" Lock It In "show, where it will be tightly integrated," said Fox Sports executive director and executive producer. Eric Shanks. "Probably in some of our radio shows that are on television, more closely integrated. You'll see integrations in our pre-match shows, but if we've just announced this deal, we still have a lot of work to do to say exactly how it's going to be. "
So, it's something. The strategy of the apps makes sense, and it is hard to deny that an explosion of American sports betting is looming on the horizon. Nevertheless, Fox Sports is not a gaming company. Linking their brand so directly to the service is very strange and also leads to issues of ownership and integrity that do not really seem to be worth the potential benefits.
We can assume that they have their reasons (it's money), but it's always hard to grasp.
[Sports Business Daily]
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