Fox Bet's Demise Seems Inevitable in America's Sports Betting Sector as Closure Draws Near
FOX Bet might become the next victim in the intensely competitive U.S. sports betting market, potentially meeting its demise as early as next week.
According to anonymous sources with knowledge of the matter, News Corp (NASDAQ: NWSA) and Flutter Entertainment (OTC:PDYPY) may announce their decision to close FOX Bet on July 31st, with the shutdown effective the following day.
There were rumors earlier this month that FOX Bet was facing a critical choice - either pour more money into the sports gambling operation or shut it down. The deadline for this decision was set for August 1st.
With only 0.1% market share in the states where it operates (Massachusetts, New Jersey, Pennsylvania, and Michigan), FOX Bet is struggling to establish a foothold.
News Corp's Next Moves in Sports Betting
Despite facing challenges so far, News Corp has made it known that it holds high hopes for the U.S. sports betting landscape and Australia's as well. However, it appears that FOX Bet hasn't quite delivered the results they had hoped for.
Still, Fox will have something to show for its efforts with the option to own up to 18.6% of FanDuel, the major player in the U.S. online sportsbook market. FanDuel is valued at around $20 billion, so this is no small consolation prize.
In the event of FOX Bet's demise, Fox would keep hold of the branding and its popular Super 6 predictive games. Fox has been exploring marketing opportunities with other sports betting companies while retaining these assets.
The Stars Group's takeover by Flutter in 2020 resulted in FOX Bet being controlled by the Dublin-based gaming company. With FOX Bet's lukewarm performance amidst soaring interest in FanDuel, the brand has become more of a burden than anything.
Benefits for Flutter
Though not financial, Flutter could still find value in FOX Bet's closure. It would rid them of a loss-making operation that had become more of a hassle than profit-making.
Upon saying goodbye to FOX Bet, Flutter would also get to keep its customer database and marketing agreements, according to Bloomberg.
Flutter also stands to gain from a potential U.S. IPO before the end of the year. Jettisoning FOX Bet from their balance sheet could simplify their narrative and make their stock more attractive to U.S. investors.
If FOX Bet were to shut down, it's unlikely that Flutter would miss out on much. As Fox's investment in the Stars Group, this asset was already under the Flutter umbrella following their 2020 $12.2 billion acquisition.
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Source: www.casino.org
