Both the companies will launch Fox Bet later this year.
The U.S. based broadcasting company Fox Corporation has reportedly announced to have acquired 4.99 percent of gaming major Star Group Inc. to start sports wagering platform. This will be the biggest media investment to date in the growing U.S. sports-betting market.
Reportedly, Fox corporation will pay $236 million to Stars Group for its stake. The gaming giant had bought Sky Betting and Gaming for $4.7 billion.
Later this year, Fox Bet will be launched by both the companies. Fox Bet will offer 2 products designed for staking a claim in the growing world of online betting, one will be free to play, offering customers prizes and cash for predicting the outcome of sports games, and other will provide the real money wagers in states with an option to position with regulated online betting.
Rafi Ashkenazi, Chief Executive Officer, Stars Group, reportedly stated that free-to-play games are an effective way to convert customers to real money games and grow customer engagement and acquisition.
Under the acquisition, Stars Group will get a license to use certain trademarks of Fox Sports for up to 25 years. The company has also agreed to spend an unrevealed amount every year advertising on Fox Sports outlets. PokerStar is also operated by Stars Group.
Additionally, within next 10 years, Fox Sports will have right to acquire 50 percent U.S. business of Stars Group. Online casinos, poker, and domestic sports betting can become a $9 billion revenue market by the year 2025, when sponsorship, advertising and wagers will all tally up, cited reliable sources.
The deal with Stars will allow Fox to diversify. The broadcaster now gets over 70 percent of profit from Fox News, cited reliable sources.
For the record, the Stars Group’s shares went up by 11 percent after the deal in extended trading before being halted. The company has grown 5.9 percent this year through the close on Wednesday.