Sports Illustrated Is Joining the Online Betting Bonanza
(Bloomberg) -- Internet gambling operator 888 Holdings Plc has obtained exclusive rights to the Sports Illustrated brand for sports and casino wagers online, the latest in a flurry of deals in the fast-growing business.
888, which is headquartered in Gibraltar and trades on the London Stock Exchange, will pay a licensing fee to the owner of Sports Illustrated, Authentic Brands Group, and additional funds based on the number of customers.
The 57-year-old magazine, famous for its crisp writing, colorful photography and annual swimsuit issue, still generates more than 30 million unique visitors to its website. 888 Chief Executive Officer Itai Pazner told investors on a call Thursday he hopes to obtain a 5% market share in states where the company offers sports betting, and said the brand should open doors for both customers and casinos that want to work with him.
“Local partners prefer to work with brands they feel have a higher chance of success,” he said.
Sports betting in the U.S. has exploded since the Supreme Court began allowing such wagers outside of Nevada in 2018. Sportsbooks and online sites now offer wagering in some 21 states. Nine more have legalized it but have yet to implement it. Online casino games, such as blackjack, are an even larger, more lucrative opportunity.
The agreement with Authentic Brands lasts for up to 20 years, according to a presentation the company released Thursday. It gives Authentic a 4.9% stake in a joint venture with 888 that includes the U.S. Sports Illustrated betting business and options to increase its ownership to 19.9%. It also includes the potential for the brand to be used in physical locations, according to a person with knowledge of the matter who asked not to be identified because all of the terms aren’t public.
888 expects to launch SI Sportsbook wagering in Colorado in the second half of 2021, with other states to follow. It already has agreements to offer betting in New Jersey, Indiana and Iowa. The company operates sites in the U.S. under the 888 brand and provides betting technology for Caesars Entertainment Inc.’s World Series of Poker brand.
Traditional media companies such as Fox Corp. and Sinclair Broadcast Group Inc. have been pairing up with casino and online operators to capitalize on the market’s potential.
888’s revenue soared 52% to a record $850 million last year, driven in part by a surge in online wagering during the pandemic. About 12% of its sales came from the U.S.
Shares of 888 rose 1.1% to 398.60 pence in London. They’re up 40% this year.
Authentic bought the Sports Illustrated name, along with some of its other intellectual property, for $110 million from magazine publisher Meredith Corp. in 2019.
Moelis & Co. served as financial adviser to Authentic Brands, while Stifel Financial Corp. represented 888.
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