FOX Sports is expanding its relationship with the New York Racing Association, a two-part deal that includes a media rights extension and an equity stake in the horse racing association’s gambling platform.
On the media side, the Fox Corp. unit is extending its broadcast deal with NYRA through 2030, giving Fox Sports rights to racing events like the Travers. Fox Sports expects to air at least 700 hours of coverage each year from NYRA’s Belmont Park and Saratoga Race Course.
The bigger part of the deal, however, is the gambling portion. Fox Sports is taking a 25% stake in NYRA Bets, an option laid out in a prior rights agreement with NYRA. This new deal also gives Fox Sports a further option to increase its stake in NYRA Bets to 49.9% in the next several years.
“Fox Sports is really evolving from being a purely media content brand into a content and gaming brand,” Michael Mulvihill, head of strategy and analytics at Fox Sports, said in an interview.
In that transition, it’s impossible to ignore the relationship between the two. Since Fox Sports expanded its coverage of NYRA events a few years ago, NYRA Bets’ handle has expanded dramatically. Wagers on the platform have grown from $7.2 million in 2016 to $225 million in 2020.
“There’s this conversation around how media companies like us—like Comcast, Disney or whoever—how are we going to lever that TV exposure to drive wagers?” Mulvihill said. “We’re already seeing a blueprint for that future in horse racing.”
The TV-aided growth is paying off in another way as well. Fox is buying 25% of NYRA Bets based on a valuation from three years ago, despite the fact that it’s now multiple times higher, according to someone familiar with the deal. Fox’s option for the additional 24.9% is locked into a recent valuation, the person said, meaning any expansion of the platform that comes in the next few years will make that option even more appealing.
NYRA has the exclusive right to conduct horse racing at New York’s Belmont Park, Saratoga Race Course and Aqueduct Racetrack. (Its media relationship with Fox Sports does not include the Belmont Stakes, which is sold in a separate Triple Crown Package).
NYRA Bets is what’s called an advance deposit wagering (ADW) platform, the online version of horse-racing gambling, which was long dominated by wagers placed at the track or off-track betting houses, known as OTBs. While gambling on horse racing has stayed relatively flat in recent years, according to Mulvihill, the portion of bets placed through ADWs like NYRA Bets is dramatically increasing.
The NYRA Bets acquisition means Fox now has ownership stakes in gambling platforms for horse racing, traditional sports betting, online poker and online casino games (the latter three come from Fox’s investment in the Stars Group, which includes FoxBet and Pokerstars). That’s a first for a media company, according to Mulvihill, who said he was not concerned about one cannibalizing the other.
“I think right now they are complementary products,” Mulvihill said. “It’s certainly interesting to think about how in the future our approach to gaming could be more unified, and that’s probably as much as I can say right now.”