Sports betting media startup The Action Network raises $17.5 million

By Hilary Russ

NEW YORK (Reuters) - Sports betting media startup The Action Network said on Thursday it has raised $17.5 million of funding from private equity, team owners and media and esports investors.

The investments come as the sports and media industries try to figure out how to capitalize on the nascent American sports betting market.

A U.S. Supreme Court ruling in May allowed states to legalize, regulate and tax the activity. The decision instantly created a new national market, sparking a rush of activity by states, companies, leagues and others seeking to profit.

Eight states now offer legal sports wagering. At least two more and the District of Columbia have legalized it, and 21 more states have active sports betting legislation to consider.

"We see an incredible opportunity as we focus on securing the necessary approvals in regulated U.S. sports betting jurisdictions as well as those around the world," The Action Network CEO Patrick Keane in said a statement.

In anticipation of the new market, firm was formed in October 2017 by The Chernin Group, founded by media titan Peter Chernin.

It quickly lured high-profile writers and personalities from sports media giant ESPN Inc., a unit of Walt Disney Co.

The Chernin Group also re-invested in the network in the latest round of funding.

"This latest financing will help us expand our audience reach and depth of product offerings for years to come," Chernin Digital President Mike Kerns said in the statement.

Private equity firm Fertitta Capital led the funding. Chairman Lorenzo Fertitta grew up in Las Vegas and formed gaming company Red Rock Resorts. Fertitta also previously owned the Ultimate Fighting Championship until selling it in 2016.

David Blitzer, of Harris Blitzer Sports & Entertainment, which owns a stake in the Philadelphia 76ers and New Jersey Devils, is also an investor in The Action Network.

The Chicago Cubs, German esports investor BITKRAFT Esports Ventures GMBH & Co KG and former Twitter Inc. COO Anthony Noto also bought in.

(Reporting by Hilary Russ; Editing by Dan Grebler)