FOX Bet Details Imminent Shutdown
It's confirmed, News Corp (NASDAQ: NWSA) and Flutter Entertainment (OTC: PDYPY) have decided to shut down FOX Bet.
Rumors of such a move surfaced last week, and the companies made it official with a press statement released on Sunday.
According to a statement by Dublin-based Flutter, "Flutter Entertainment and Fox Corp. announce today their decision to close sports betting platform FOX Bet. A phased closure of FOX Bet's operations will take place between 31 July and 31 August 2023."
Flutter took control of FOX Bet through its 2020 acquisition of the Stars Group, which created the largest online gaming entity in the world. Prior to this transaction, Fox was a significant investor in the Stars Group. Over the years since the deal went through, FOX Bet saw little growth, with Fox blaming Flutter for allowing the platform to decline as they focused on FanDuel. Flutter currently holds 95% of FanDuel, which is the leading online sportsbook operator in the US.
FOX Bet May Rebound in the Future
In the wake of the transaction, Flutter will continue to manage the US arm of PokerStars.
"FOX will retain future use of the FOX and FOX Bet brands, including FOX Bet Super 6, and intends to launch an all-new FOX Super 6 game later this summer," the statement continued.
There's a possibility that the FOX Bet brand could make a comeback in the future. Fox has apparently been in negotiations with other gaming companies and the media conglomerate possesses attractive broadcast rights for significant US sports, including Major League Baseball (MLB), NASCAR, and the NFL.
FOX Bet racks up approximately $60 million in losses annually and accounted for around 20% of Flutter's EBITDA loss in the first half of the year, which may explain the operator's desire to shut down the unit.
Fox Leaves This Circumstance with Something
Although FOX Bet only entered four states and failed to achieve a significant market share, Fox isn't leaving empty-handed. For starters, keeping the gaming platform running would have required a financial contribution from the media conglomerate. Now, this money can be allocated to potentially more lucrative ventures.
Furthermore, Flutter reaffirmed that it will uphold Fox's right to acquire up to 18.6% of FanDuel in the future. With FanDuel estimated to be worth roughly $20 billion, that's a multibillion-dollar reward for Fox. Additionally, Fox also owns 2.5% of Flutter, an asset that has steadily appreciated. This enrichment may speed up when Flutter publicizes its shares in New York, an occurrence that is expected to transpire later this year.
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Source: www.casino.org
