TORONTO — The Canadian owner of PokerStars is joining forces with Fox Sports in a US$236-million deal to launch Fox Bet, a sports wagering partnership in the United States.
The Stars Group Inc. and the unit of Fox Corp. say they expect to launch two products this fall. One will be a free game that awards cash prizes to players who correctly predict the outcome of sports games. The second product will give customers in states with regulated betting the opportunity to place real money wagers on sports events.
The two companies have entered into a commercial agreement lasting up to 25 years that will provide the online gambling company with the exclusive licence to use certain Fox Sports trademarks.
Fox Corp. will acquire 14.3 million newly issued common shares of the Stars Group, equalling nearly five per cent of the outstanding shares, at US$16.44 per share.
The Stars Group says it plans to use the US$236-million net proceeds to prepay outstanding debt and for general corporate purposes.
Under the deal, Fox Sports has the right prior to the 10th anniversary of the agreement to acquire up to half the equity stake in The Stars Group's U.S. business.
Chief executive Rafi Ashkenazi says the strategic partnership positions it to build a leading betting business in the U.S., one of its biggest long-term growth opportunities.
"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," added Fox Sports CEO and executive producer Eric Shanks.
Companies in this story: (TSX:TSGI)
The Canadian Press
