Sports Betting Illustrated: The 67-year-old media company Sports Illustrated is teaming up with 888 Holdings to launch a sports wagering app ahead of first game of the NFL season.

The first game of the NFL seasonthe Dallas Cowboys versus the reigning Super Bowl champions Tampa Bay Buccaneersis nine days away and Sports Illustrated is getting ready to take action from gamblers.

The SI Sportsbook mobile betting app will launch this week in Colorado and expand to Indiana, Iowa and New Jersey within the next several months. The 67-year-old media brand cut a deal in June with 888 Holdings, an online sports betting company based in Gibraltar, to launch a branded mobile sports betting app. The timing is good as football seasonthe high season for gamblingkicks off next week.

Daniel Dienst, executive vice chairman of Authentic Brands Group, which bought Sports Illustrated in 2019, says theyre making a big bet on sports betting, which has become part and parcel of the culture and how people engage in sports.

The deal with 888 Holdings, which is traded on the London Stock Exchange and has a $2.08 billion market cap, has three components, says 888s CEO Itai Pazner. ABG has been paid an upfront licensing fee for the SI name and logo, the company will receive additional performance-based payments related to how many players sign up, and ABG will also receive 5% equity in the SI Sportsbook. ABG has the option to acquire an additional 5% stake for $15 million and another 5% for $25 million with the total potential ownership stake of 19.99%.

Pazner says that once the first four states are up and running, he hopes to build up to a 5% market share in each state.

In an investor presentation outlining details of the deal, 888 estimates that the sports betting markets in New Jersey, Colorado, Iowa and Indiana combined are worth about $1.8 billion. That means 888 believes it has a $90 million opportunity if it can reach 5% market share in each state. Pazner says 888 plans to launch in three to four new states each year with a goal to be operating in 15 by 2024.

The SI Sportsbook is a crucial aspect to 888s strategy in the U.S. The company, which was founded in 1997 by two sets of Israeli brothers, has a contract with the Delaware Lottery as well as a partnership with Caesars Interactive Entertainment to power the World Series of Poker brands online poker rooms until 2026. But SI Sportsbook is the companys strategy to catch some of the billions of dollars being wagered on sports in America as legal markets continue to proliferate across the country.

We thought America would develop into a market where poker and casino games were leading, but the market has turned and sports have become the leading product, says Pazner. About two years ago we realized that we really needed to move into more of a sports agenda and to find a good local, strong sports brand to associate ourselves with.

They found that with SI. Sports Illustrated, which launched a sporting event ticketing business called SI Tix in June, was also looking for a partner in the gambling world, Dienst says. Now with the deal underway, SI will provide the contentit currently has five gambling and sports betting writers on staff and that team will double in size to help provide more content for the appand 888 will provide the betting lines, the technology and the gambling licenses.

Turn The Page: Sports Illustrated, which launched in 1954, has diversified its revenue stream with sporting event ticket sales and now sports betting.

Sports betting, which is now legal in 22 states and Washington, D.C., has continued its expansion across the country since the United States Supreme Court reversed a federal law in 2018.

Legal sports betting means big money for casinos, gambling tech companies and media companies. Americans bet $1.85 billion with legal sportsbooks in the first half of 2021, according to data from the American Gaming Association. This year has already bested last year when Americans wagered $1.53 billion. (The growth can be explained due to the fact that the pandemic cancelled most sports games last year and over 10 new sports betting markets opened over the year.)

The legalization of sports betting has set off a frenzy of deals between media and gaming companies. Last week, the Wall Street Journal reported that ESPN, which is owned by Disney, is in discussions to explore a potential brand licensing deal with Caesars Entertainment or DraftKings that could be worth $3 billion.

Earlier this month, Pennannounced an acquisitionof Canadian company Score Media, which owns the mobile sports betting app theScore, for $2 billion.

The Associated Press, in May, cut a deal withFanDuel to make thesports bettingcompany its exclusive provider of sports odds across APs global sports reports. Under the terms of the agreement, FanDuel Sportsbook will pay the AP to cite its odds in sports stories, game previews, and daily sports odds fixtures.

While the sports betting market is red hot now, its been glowing for years. In January 2020, Penn bought a 36% stake in sports media publisher Barstool Sports for $163million and it has since spun out a Barstool Sportsbook betting app in Pennsylvania, Michigan and Illinois. The Stars Group, a Canadian online gambling company, inked a partnership with Fox Sports to launch sports wagering app Fox Bet in 2019.

Sports Illustrated cant claim first-mover advantage in the crowded market, but Dienst, in an apparent dig to Buffalo Bills fans, says that SI Sportsbook will offer a highbrow experience for sports fans.

We're not pandering to the frat boys who are jumping on folding tables, he says. We're the journalists in the spacewe are the most trusted name in sports and we are going to be the most trusted names in sports wagering.

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Sports Illustrated To Launch Betting App In Colorado - Forbes