FanDuel owner Flutter to shut down Fox Bet
Why it matters: Despite the growing popularity of sports betting and brand power of broadcasters like Fox, the operations have not been easily profitable.
Catch up quick: Fox launched the sports betting platform in 2019 with The Stars Group, which was acquired by Dublin-based Flutter in 2020.
- Flutter reported a loss of $313 million for its U.S. business in its 2022 annual report.
- Flutter CEO Peter Jackson said on a March earnings call that Fox Bet and PokerStars contributed only 3% of U.S. revenue and 30% of losses. He said he expected "between half and two-thirds of [$75 million in losses] to go away" if Fox Bet were shut down.
Details: Fox Bet will be phased out between Monday and Aug. 31.
- Fox will retain the use of the Fox Bet brand and plans to launch a Fox Super 6 game — the name of its free-to-play contest picking the winners of games — later this summer, according to the release.
- Fox will keep its 2.5% stake in Flutter and hold its option to acquire 18.6% of FanDuel.
Between the lines: Fox had big plans for Fox Bet when it introduced the app in 2019, but those plans hit a snag over a lengthy legal dispute with Flutter in 2021 over the price that Fox would have to pay to buy a stake in FanDuel.
- Last year, an arbitrator said that Fox has the right to buy an 18.6% stake in FanDuel from Flutter, but not at the price it was hoping for.
- The legal drama delayed Fox's ability to roll out the app in the U.S.
What we're watching: Flutter had considered an IPO for FanDuel, but Flutter shareholders voted earlier this year for a U.S. stock listing of Flutter.