Flutter Entertainment and Fox Corp. announced plans Sunday to “wind down” FanDuel brand. 25353p
Over the next several weeks, FOX Bet will be shuttered in a phased closure that is scheduled to be completed around Aug. 31, the companies wrote in a Michigan. FanDuel is also available in each of those states, in addition to many others.
FOX Bet customers in Pennsylvania were informed on Monday that the site is no longer accepting sports wagers across the state, but that the platform-sharing “PokerStars and PokerStars Casino businesses are not affected” and will continue as is. News of the impending FOX Bet closure was first reported by Bloomberg News on Saturday.
According to Bloomberg, Flutter will retain market access in the jurisdictions where FOX Bet is present and will keep the FOX Bet customer database. Fox, meanwhile, will keep the FOX Bet name, its option to acquire 18.6% of FanDuel Group, and the “Fox Super 6” promotion.
FOX Bet wasannounced a potential deal with Flutter. The acquisition was completed in May 2020. Bloomberg reported that Flutter hasn’t built up the FOX Bet brand as heartily as Fox had hoped. FanDuel is the biggest wagering platform in the U.S. by market share, capturing about 50% of the existing market with access in nearly every legal betting state.
By comparison, FOX Bet garners a U.S. market share of around 0.2%, according to estimates from JMP Securities.
Split has been coming since arbitration ruling 2g2l2
Sports Handle reported in November 2022 that a arbitration ruling could spell the demise of FOX Bet, with both Fox and Flutter given the option to terminate their agreement in relation to the platform by August 2023.
Under the ruling, Fox retained the option to purchase 18.6% (or $3.72 billion) of FanDuel Group with a 5% annual escalator. Fox CEO Lachland Murdoch previously called the limited FOX Bet rollout “disappointing” and told Axios in 2022 that it was not meeting expectations.
Fox and Flutter Entertainment plan to wind down their Fox Bet online wagering business starting on Aug. 1 https://t.co/9A3SJe1wqL
— Bloomberg (@business) July 28, 2023
The sportsbook’s closure comes at a time when some sports betting partnerships with major media companies have failed to gain traction. When shareholders approved the sale of its U.S. assets to Fanatics, PointsBet Holdings Limited CEO Sam Swanell itted that the NBC transaction was not enough to “bridge the gap” in achieving the scale it sought.
Meanwhile, ESPN reportedly came close to forging a deal with DraftKings currently have on the U.S. sports betting market.
Nevertheless, the “size and reach of Fox makes it a valuable cross-sell and monetization channel,” JMP Securities analyst Jordan Bender wrote in a research note. Moving forward, JMP believes that Fox will look to other alternatives to drive its betting unit in the U.S.
At the same time, the closure of FOX Bet provides the latest signal of consolidation across the U.S. market. Over the last 18 months, Fubo Sportsbook and Maxim Bet have closed down. Then, amid a slew of compliances issues earlier this month, New Jersey regulatory official revoked a transactional waiver that allowed PlayUp to offer sports betting.
PlayUp is reportedly considering the sale of its U.S. sportsbook as the company deals with liquidity concerns. PointsBet executives noted that only seven U.S. operators have attained market share of 1%, a threshold FOX Bet could not reach.
Analysts are expected to receive further indications on Fox’s future sports betting plans at the company’s next quarterly earnings conference call on Aug. 8.
