MASHANTUCKET, CT – APRIL 17: General view of the Grand Theatre before a bout at throne boxing presented by Roc Nation Sports Live on Fox 1 at Foxwoods Resort Casino on April 17, 2015 in Mashantucket, Connecticut. (Photo by Rich Schultz/Getty Images for Roc Nation Sports)

As legalized sports betting continues to become more and more common across the United States, many media companies have sought ways to take advantage of gambling interest. So far most of that has been content-related, but Fox is reportedly set to take it a step further by launching what amounts to their own gambling service this fall in concert with The Stars Group, a Canadian gaming company that owns brands like PokerStars and Full Tilt Poker.

From John Ourand’s report at Sports Business Daily:

The move to launch Fox Bet comes as part of a wide-ranging deal Fox signed with The Stars Group that was announced after the market closed today. The plan is to launch two betting products under the Fox Bet umbrella. One is a nationwide free-to-play game that awards cash prizes to people who correctly predict the outcomes of games. The other gives an opportunity to place real money wagers on sporting events in states with legalized gambling. 

Theoretically, then, as more states roll out legalized gambling, Fox Bet is in position to capitalize on the new markets, including the potential built-in base of free game users. On the other hand, we’ve already seen the downsides of media companies directly investing in similar services; Fox themselves invested a reported $160 million into DraftKings that was heavily marked down less than a year later.

And the move isn’t cheap for Fox, either:

Deal terms have Fox paying $236 million for a 4.99% stake in Stars Group. Fox holds the right to take a 50% equity stake in the company within the next 10 years. Fox will get a brand license, integration and affiliate fees and a minimum advertising commitment from Stars Group as part of the deal. In exchange, Stars Group will use Fox Sports trademarks to launch the service as part of a 25-year commercial license. Stars Group also picked up advertising and editorial integration rights on some Fox Sports broadcast media and digital assets, the company said.

Eric Shanks offered some clarity as to the level of integration viewers are likely to notice:

“There’ll be certain places, like our FS1 show ‘Lock It In,’ where it’s going to be tightly integrated,” said Fox Sports CEO & Exec Producer Eric Shanks. “Probably on some of our radio shows that are on television, more tightly integrated. You will see integrations in our pregame shows, but sitting here today, just announcing this deal, we still have a lot of work to do to say exactly how all of that’s going to be.”

So, this is something. The app strategy kind of makes sense, and it’s tough to deny that an explosion in American sports wagering is on the horizon. But despite all of that, Fox Sports is very much not a gambling company. Tying their brand so directly to the service is very odd, and it also leads to questions of propriety and integrity that don’t really seem worth the potential rewards.

Presumably they have their reasons (it’s money), but it’s still a tough move to grasp.

[Sports Business Daily]

About Jay Rigdon

Jay is a columnist at Awful Announcing. He is not a strong swimmer. He is probably talking to a dog in a silly voice at this very moment.