Action Network Inc., a digital startup looking to capitalize on the spread of legal sports betting, completed a funding round that attracted team owners from baseball, basketball and hockey, along with the former owners of the Ultimate Fighting Championship.
The subscription-based service offering data and analysis for sports bettors raised $17.5 million in a funding round that closed this week, CEO Patrick Keane said in a statement announcing the investments. The company was formed a little over a year ago by the Chernin Group, led by media mogul Peter Chernin.
“With sports betting now legal in eight states and more than a dozen other states considering legislation to legalize, we see an incredible opportunity,” Keane said in the statement.
The investment was led by Fertitta Capital, a private equity firm formed by brothers Frank and Lorenzo Fertitta after they sold Ultimate Fighting for $4 billion in 2016. The Fertittas are longtime casino owners who hold a controlling stake in Red Rock Resorts Inc. While they have experience with sportsbooks, the investment by Fertitta Capital is its first in sports betting outside Nevada.
“We want it to be an enabler of engagement and activity,” said Fertitta Capital CEO Nakisa Bidarian. “And we think Action Network is the best place to do that.”
Also contributing were Blackstone Group’s David Blitzer, co-owner of the Philadelphia 76ers and New Jersey Devils; the owners of the Chicago Cubs; 6721 Capital, a new fund formed by sports marketing executive Casey Wasserman and the investment banking firm Code Advisors; and BitKraft Esports Ventures, the world’s first esports-specific venture capital fund.
In May 2018, the U.S. Supreme Court overturned a 1992 federal law that halted the spread of sports betting beyond Nevada. Since then, seven states, including New Jersey, have allowed sportsbooks to begin operating. The gambling-research firm Eilers & Krejcik Gaming estimates that the sports-betting market could reach $6.5 billion by 2023 as more states come on board.
Sports leagues, betting operators, and media companies are scrambling to capture a piece of the action. Earlier this month, AT&T Inc.’s Turner Broadcasting announced plans to put a studio inside the sportsbook at Caesars Palace in Las Vegas, where it will produce betting-focused shows for its pay-TV channels and digital properties, including Bleacher Report, TNT, and TBS.
Chernin Group formed the Action Network in the fall 2017 by rolling together three companies and added to its investment in this latest round of fundraising.
The company is looking to be a one-stop shop for sports bettors. Action Network offers free podcasts and news from its stable of about 30 reporters and editors, while paid subscribers get access to betting-market trends and other analytical tools, as well as more news content. The goal is to sign up hundreds of thousands of subscribers.