Deal With Penn National Gives The Stars Group New Avenues Toward US State Markets
Toronto-based The Stars Group (TSG) has announced an agreement with Penn National Gaming (PENN) that grants it “options to operate online betting and gaming in states where Penn currently owns or operates casino properties.” The agreement covers nine states, which, brings The Stars Group’s total possible access to US states, given its similar partnerships with other corporate and tribal casino operations, up to 20 of the US’s total 50 states.
As with its pending partnership dealers with other US casino entities, the partnership would online go into effect when a state included in the deal both legalizes regulated online gambling and then approves both the casino as an online operator and TSG as an online-service provider.
According to the TSG announcement , “The agreement grants The Stars Group the option to own, operate and brand real-money online sports betting, poker and casino offerings in each of the applicable states subject to license availability, state law and regulatory approvals. As it relates to sports betting, The Stars Group’s options currently provide first-skin access in Illinois, Indiana, Ohio, and Texas, and second-skin access in Kansas, New Mexico, Maine, Massachusetts and Michigan.”
The stated emphasis on sports betting acknowledges the widespread industry belief that virtually all US states that will legalize various forms of online gambling will give a priority to sports betting, with other forms of online gambling coming along at later dates. This means that the deal will bring TSG’s FOX Bet brand, which also factors in TSG’s recent partnership with Fox Sports, into prominent use in many states in the short term. The deal will also benefit TSG’s prominent PokerStars brand, but at a slower pace.
Rafi Ashkenazi, Chief Executive Officer of The Stars Group, stated, “We are excited to announce this agreement with Penn, a respected leader in the gaming and racing industry in the United States. This agreement further extends our market access platform, as we work to establish our FOX Bet business as one of the leaders in the emerging U.S. online betting and gaming market.”
Penn National Gaming’s Chief Executive Officer, Timothy J. Wilmott, offered this: “The Stars Group is one of the world’s largest publicly listed online gaming companies. Its agreement with FOX Sports positions it to become a leader in the U.S. industry, and we are excited to work with The Stars Group to capitalize on its proven ability to leverage its products to gain share in the growing market for online gaming.”
Penn will allow TSG to conduct most of the work in operating sites launched under the agreement in exchange for front money and a slice of the ongoing revenue. As the presser stated, “Under the terms of the agreement, Penn will receive a revenue share from the operation of the applicable offerings by The Stars Group, an up-front cash payment of $12.5 million, and potential additional cash payments upon and following The Stars Group’s exercise of each option.”
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