When U.K.-based 888 Holdings sought entry to the U.S. online betting and gaming market, it carefully reviewed possible partnerships. The company tracked what was happening, notably with agreements between media companies and operators.
“We looked at every deal that was out there,” says 888 Senior Vice President and Head of US, Yaniv Sherman. ‘Every deal that you saw signed, we were in play at some point. We tried to learn from every deal, some that were successful, some not.”
In early September, 888’s deliberate process will finally pay dividends when it partners with one of the best-known sports brands to launch the SI Sportsbook in Colorado.
Sherman recognizes that agreements between media companies and gaming operators can be unwieldy and that media, branding, and gambling interests have varying business models.
“That’s why when we spoke to Sports Illustrated and ABG (Authentic Brands Group, SI’s parent company) in particular, I and the team prioritized commitment over perceived value,” Sherman says. There are brands as good, or dare I say, better. … But if you really want to create value here, and if you really want to create something different, I think that you need to match each side’s commitment.”
The terms of the deal include Sports Illustrated getting a 4.99% equity stake in the joint venture. 888 receives an exclusive license to use SI branding on its platforms.
“Sports wagering represents a large and high-growth market,” said ABG Chairman and CEO Jamie Salter in a statement, “allowing us to diversify the brand’s revenue streams and engage directly with our sports consumers, broadening the reach of the brand.”
New Jersey, Iowa and Indiana, also are expected to offer the SI Sportsbook in the coming months.
“We have a very healthy market access pipeline that we’re constantly evaluating,” Sherman says. “We may opt to change the order, but we are definitely looking to venture into two or three additional markets by mid-next year.”
Those states are to be determined, he adds, as the regulatory landscape changes and more states legalize sports betting.
For Sherman, the deal makes good business sense, but also has a bit of sentimental value. While growing up in Israel, he was an avid reader of SI, especially of the behind-the-scenes stories about Joe Montana, Michael Jordan, and the Los Angeles Lakers.
“It presented a world that is not as accessible as it is today,” Sherman says, noting the abundance of information that’s now available online.”
Like most print magazines, Sports Illustrated has undergone changes. Earlier this year SI launched a metered paywall, charging readers for premium content after reading five articles by its most notable writers. The print magazine, long a weekly, now is published just 17 times per year.
But SI still has cachet, and more importantly, numbers. According to Business Wire, the SI Media Group – which also includes The Spun, Hockey News, and Athlon Sports, among other outlets– is No. 6 across sports media, with more than 42 million monthly users.
Sherman insists his company does not want to turn SI into a gambling content site but instead use its entertainment content to link to 888’s sports betting propositions.
“Today we know for a fact that the average Sports Illustrated consumer, whether it’s print or online, is also an avid consumer of fantasy and gambling content,” Sherman says. “We know the propensity to bet is much higher than the average media consumer, and we know that they do that with other sports destinations. So what we’d like to to create a seamless experience where you’ll be consuming sports content, and you’ll be able to consume dedicated betting content that we’ll be producing with the Sports Illustrated team.”
One feature the SI Sportsbook will promote is in-game betting, where bettors can wager on outcomes such as whether a field goal will be good, a batter gets a hit, or a golfer makes a putt. Sherman predicts this betting segment will eventually outpace pre-match wagering, garnering between 70-85% of play over time.
