In May, FOX Sports and The Stars Group announced a groundbreaking deal to launch FOX Bet, a first-of-its-kind national media and sports wagering partnership in the United States. The companies launched two products recently: FOX Sports Super 6, a nationwide free-to-play game, awarding cash prizes to players who correctly predict the outcome of sports games; and the eponymously named FOX Bet, which gives customers in states with regulated betting the opportunity to place real money wagers on the outcome of a wide range of sporting events in accordance with applicable laws and regulations.
The deal is the boldest wager yet on sports betting by a national media company. It comes at a time when states across the country are adopting new laws following the United States Supreme Court’s decision in Murphy v. NCAA that allowed states to legalize sports betting. The sweeping changes provide exciting opportunities for new business, but also present significant challenges and uncertainty. In early October, Flutter Entertainment (the owner of FanDuel) announced an all-stock acquisition of The Stars Group, emphasizing the growth opportunities presented by the US sports betting market and touting a dual-brand strategy behind FOX Bet and FanDuel in that space.
Adam Reiss
Adam Reiss is Executive Vice President and Associate General Counsel for Fox Corporation and led the legal effort on the FOX Bet transaction and the negotiations with Flutter. We sat down with him for a discussion about the challenges and opportunities these transactions present, as well as his thoughts on the future of legalized sports betting in the US.
Question: Emerging from the sale of 21st Century Fox’s film and TV studio to Disney, the new standalone Fox Corporation seems to be diving into sports betting head-first. What’s driving the company’s enthusiasm?
Answer: As the provider of the best live sports events in the country, we see FOX Bet as an opportunity to expand the ways we connect with sports fans and enhance their experiences. We think the FOX Bet transaction fits well with our efforts to drive engagement with our content. It’s a long-term play, but highly compelling.
Q: The partnership with The Stars Group is the first national media and sports betting partnership in the U.S. What sorts of challenges did that present?
A: Where do I start? Clearly the uncertainty of whether, when and how states will adopt sports betting laws and regulations injects significant complexity into charting out a long-term strategic partnership like this one. The substantive differences between laws among the few states that have adopted legalized sports betting to date are staggering—physical sportsbooks versus mobile betting; in-person versus mobile registration; pre-existing regulation of casinos, fantasy sports and horse racing; licensing; taxes; the list goes on. But, in my 15 years at Fox, I have worked on numerous joint ventures and strategic partnerships, with each having its own nuances and idiosyncrasies. So we have experience with finding creative solutions to complex problems, evaluating risk and moving forward when a deal makes sense.
Q: Beyond the regulatory issues, what else do you see impacting the evolution of FOX Bet — or sports betting generally — in the U.S?
A: There are several constituencies. First and foremost is fan engagement. It will be important to follow how sports fans are consuming content, what types of content keeps their interest, and how the sport betting industry serves those fans. The leagues too will have a meaningful role as they pursue their goals, including protecting the integrity of their sports. Addressing the role of sponsors and advertisers in this market will also be important, as sports betting and mobile apps create new opportunities for them. Technology will also be a big driver in how operators comply with regulatory and other restrictions, how consumers interact with mobile sport wagering and how frictionless the overall experience is for those consumers. And, of course, the conduct of the industry itself will play a critical role, in terms of responsibility and self-discipline.
Q: Some of Fox’s competitors have indicated that they are approaching sports betting more slowly, focusing, in many cases, solely on programming related to sports betting. Why do you think that is?
A: I can’t speak to the strategic motivations of other media companies. What I do know is that Fox has a history of making bold moves—many of which have been transformative for our company. That said, getting into sports betting is not a decision we took lightly. Fox plans to do so aggressively and profitably, but also responsibly. We enter this space fully aware of the challenges associated with sports betting and with constant awareness that we are a media company with a responsibility to our audiences. We can learn from studying the missteps and corrective measures taken in other markets around the world, where mobile sports betting is more mature than in the U.S.
Q: How do you see the acquisition of The Stars Group by Flutter impacting FOX Bet and the US sports betting market?
A: FOX Bet is already off to a great start in its early days. In concert with FanDuel, we believe both brands will benefit and continue on their path to being market leaders.
Q: Speaking of lawyers, did you hire specific sports betting counsel for this deal?
A: For advice on state gaming regulations, we worked with Behnam Dayanim at Paul Hastings, who was incredibly helpful in getting us up to speed on such matters. It’s a steep learning curve. For the transaction itself, we turned to our long-time counsel at Jenner & Block. Carissa Coze and her team have worked with us on joint ventures and other M&A transactions for as long as I can remember. We’ve been in many trenches together and Carissa really understands our business, so there’s no one I’d rather have by my side on deals like these.
Q: Being an Executive Vice President at Fox and working on deals like this must be highly demanding. How do you decompress?
A: It’s true, these deals require constant attention and long hours, so when I have downtime, I try to spend as much of it as I can with my wife and daughters.
