- FOX buys 4.99% in TSG
- The companies will launch FOX Bet
- FOX could purchase up to 50% in TSG
Rupert Murdoch’s media giant group FOX has purchased a 4.99% stake in The Stars Group and is now rolling out a sports betting platform.
FOX Buys 4.99% in TSG – Sports Betting Arrives
Fox. Corp. has acquired a 5% share in The Stars Group Inc. (TSG), a gambling and sports betting company best known for its PokerStars online card room. This constitutes the largest investment done by media in sports betting in the United States.
Fox is paying $236 million to seal the deal with the Toronto-based giant. The deal had a positive effect on the stock market, pumping up the Stars’ shares up 11 per cent before the transaction was sealed on Wednesday.
What’s Next for Fox and the Stars Group?
In light of the latest developments, TSG and Fox Sports will be launching “FOX Bet”, the sports betting arm of the media giant, which will focus on mobile betting solutions for real money sports wagering contests as well as mock F2P sports betting events.
The new products will be pushed on every regulated sports betting market in the United States. Official leagues will use the F2P betting option developed by Fox and TSG to help novice customers experience a real-world betting situation without having to stake real money.
A Growing Relation: The 10-Year Option
Starting with 5% stake, FOX may yet seek to rev up its involvement in the gaming & betting giant. The original deal features a 10-year option which means that over the next decade, FOX can increase its stake in the company to 50%.
Given the development of the market, the United States is slated to be the second-largest sports betting market by the mid 2020s, second only to China.
Online casinos, betting and poker could bring business as much as $9 billion by 2025 Fox Sports CEO Eric Shanks stated recently, most likely citing the Association of American Gaming (AGA)’s 2018 report on the outlook of the industry.
The Stars Group has been successful in leveraging its expertise abroad, particularly with Sky Betting & Gaming, which the company acquired for $4.7 billion. While FOX will be revving up its own involvement with the TSG, the Toronto-headquarted company will also gain exclusivity over FOX’s brands for the next 25 years.
What Markets Will FOX Bet Launch Into?
FOX will likely launch on the entirety of the United States supported by TSG’s expertise. While PokerStars, the poker subsidiary of TSG is trying to break into new markets, FOX Bet will most likely target the high-yielding sports betting markets in the US, including:
- West Virginia
- New Jersey
There is a spate of states that are also pushing with their legislative efforts. Montana and Indiana are the latest states to pass sports betting bills approved by their respective governors. Meanwhile, in places like Iowa, sports betting is fast approaching.
FOX and the TSG will have to balance between launching in new markets and taking the fight to the doorstep of established gaming companies.