FOX Bet Looks Like Latest US Sports Wagering Death, Closure Said to Be Imminent

Posted on: July 28, 2023, 06:57h. 

Last updated on: July 28, 2023, 06:57h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

FOX Bet could become the latest casualty of the ultra-competitive US sports wagering landscape and its official obituary could be penned as soon as next Monday.

Fox Bet
An advertisement for Fox Bet’s Super 6 game. The gaming unit could be disbanded, according to a research firm. (Image: Fox)

Citing unidentified sources with knowledge of the matter, Bloomberg  reported News Corp (NASDAQ: NWSA) and Flutter Entertainment (OTC:PDYPY) could announce a decision to shutter FOX Bet on Monday, July 31 with the closure taking effect the next day.

Reports surfaced earlier this month that the media giant was facing something of a do or die decision with FOX Bet with that date being Aug. 1. The “do” part of that equation would have been Fox parent News Corp putting more cash into FOX Bet to keep afloat a sports wagering operation that’s cobbled together nominal market share.

Currently, FOX Bet is live in just a quartet of US states and has less than 1% share in those jurisdictions, according to some estimates.

Where News Corp’s Goes From Here with Sports Betting

News Corp has well documented sports wagering ambitions both in its home country of Australia and in the US. However, the broadcasting behemoth has yet to find tangible success in either region.

Still, Fox isn’t left empty handed when it comes to the US sports betting scene. It still has rights to acquire up to 18.6% of Flutter-controlled FanDuel — by far the largest online sportsbook operator in the US.  That’s more than decent compensation when considering FanDuel is, by some estimates, valued at $20 billion.

Even if FOX Bet is put out to pasture, Fox will retain the rights to that branding and the popular Super 6 predictive games. Fox has held discussions with other sports wagering companies regarding possible marketing accords with its family of networks, according to Bloomberg, but it’s unclear if or how FOX Bet would fit into such an equation.

FOX Bet is controlled by Flutter by way of that company’s 2020 $12.2 billion acquisition of the Stars Group (TSG), in which Fox was a major investor. Since that deal, the brand languished as FanDuel grew and as Flutter put more emphasis on that unit.

What Flutter Gets

Though not monetary in nature, Flutter can wring some benefit from the closure of FOX Bet, should that decision come to pass. If nothing else, the Dublin-based gaming company would be of a unprofitable unit that had become more of a headache than anything.

Additionally, Flutter would retain FOX Bet’s customer database and marketing agreements, according to Bloomberg.

Flutter is also close to listing its shares in the US — a move that’s expected to occur before the end of the year. Doing away with FOX Bet could clean up the investment thesis and make the stock more appealing to a broader swath of investors in this country.