The Stars Group Partners with Fox Sports in US Market
The deal was a long time in the making, at least from the perspective of The Stars Group and its desire to once again garner a significant presence in the United States market. And on May 8, the deal was announced. The Stars Group and FOX Sports entered into a national media and sports wagering partnership in the US.
PokerStars was the largest online poker site in the US for many years, beginning at the time of the poker boom when Chris Moneymaker transformed a PokerStars online satellite into a multimillion-dollar World Series of Poker Main Event win. PokerStars grew at an impressive pace, with the US market as one of its most lucrative and prominent.
That all changed on April 15, 2011, or Black Friday, when PokerStars was one of four top online poker sites to be targeted by the US Department of Justice. The domain was seized, funds were in limbo, and executives were indicted.
When all was sorted, PokerStars came out ahead. The company bought Full Tilt Poker’s assets and paid its players when that company drowned, and PokerStars eventually authorized the use of some of its fines to the US government to pay players who had been victimized by UltimateBet and Absolute Poker.
Essentially, PokerStars paid its dues, made nice with the US government, and became compliant with every market around the world with online gaming regulations in place.
The company ultimately became a part of The Stars Group, which set foot back in America with its approval for a New Jersey online poker and casino games license in 2015. In 2018, it was approved for internet gaming in Pennsylvania as well.
PokerStars may never be the online poker giant with American players again, as the dynamics of the industry have drastically changed in the past decade. But as a part of The Stars Group, it will return.
The Stars Group and FOX Sports deal opens the door for that return in a big way.
— Michael Gentile (@SpookyBugs) May 8, 2019
The commercial agreement involves The Stars Group and FOX Sports working together on several levels related to sports wagering in the US.
The partnership will involve the launch of two products in the fall of this year.
One will be FOX Bet, a product that will allow customers to play real-money bets on the outcome of sporting events in states that have legalized such wagering. The events available will depend upon each state’s individual regulations. The second product will be a free-play game that will allow customers to predict the outcome of sporting events for cash prizes, and this will be available in most states.
The Stars Group will have an exclusive license to use designated FOX Sports trademarks for immersive games and online sports wagering, advertisements, and editorial integration on some FOX Sports broadcasts and digital outlets.
As for FOX Sports, it will receive fees from the brand license, integration, and affiliates. The Stars Group will also adhere to a minimum annual advertising commitment on FOX media outlets.
.@FOXSports is planning to launch their own gambling service, Fox Bet, this fall.
The media giant is investing $236 million in The Stars Group, a Canadian gaming company that owns @PokerStars, as part of a partnership to launch the service. $FOX $TSG #CheddarLIVE pic.twitter.com/nbor3Y6vlk
— Cheddar (@cheddar) May 9, 2019
The entirety of the deal runs for up to 25 years.
Fox Corporation will acquire more than 14.35 million newly issued common shares in The Stars Group at $16.44 per share, which is nearly 5%. That comes to approximately $236 million.
Just before the tenth anniversary of the deal, FOX Sports will be able to acquire up to 50% equity in The Stars Group’s business in the US market.
FOX Sports CEO and Executive Producer Eric Shanks noted that the expansion is a positive market opportunity in digital sports wagering and a chance to diversify the company’s revenue streams, connect with customers more directly, and expand the brand’s reach.
The Stars Group CEO 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.” He added that it leverages the relationship already in place with Sky Sports in the UK market.
Fox Sports Fox Corp. purchased a 4.99 percent stake in The Stars Group for approximately $236 million.
The companies plan to launch sports betting app Fox Bet this fall and will begin taking bets in states with regulated mobile sports betting. https://t.co/brYLIb05ZK
— Ben Fawkes (@BFawkesESPN) May 9, 2019