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Apollo Global Management is in preliminary discussions about merging its Yahoo Sports platform with a sports gambling company. Apollo is a private equity firm that acquired Yahoo from Verizon for $5 billion last year.
“Apollo and Yahoo are considering merging Yahoo Sports with an existing sports betting company, a move that could set up an eventual spin off of Yahoo Sports, two of the people said. If a deal gets done, the new company would likely keep the Yahoo branding, the people said,” CNBC reports.
The Australia-based PointsBet Holdings is one of the companies that Yahoo has spoken with recently. PointsBet has a market valuation of $760 million and sold a 4.9% equity stake to NBC in 2020.
PointsBet is among a group of gambling operations trying to make a splash to compete with industry leaders FanDuel and DraftKings.
“Caesars, Fox Bet, BetMGM, BetRivers and William Hill are among other competitors fighting for users in the low margin sportsbook business,” CNBC adds.
BetMGM is worth keeping an eye on, as it already has a partnership agreement with Yahoo Sports in place.
Yahoo investing more in sports betting makes sense on several fronts. Yahoo Sports, an early leader in the fantasy sports space, believes its base of users would swiftly latch onto legalized sports betting.
In addition, sports betting is strengthening the value of online sports content. Even industry leader ESPN agrees. Disney continues to hold licensing talks with sportsbooks to brand around ESPN’s name.
A gambling partnership would allow Yahoo Sports to vastly expand its promotional tools.
CNBC says that no deal between Yahoo and a betting company is imminent, adding that Yahoo also has aspirations to operate its own sportsbook.