FOX Bet Joins A Growing List Of Defunct U.S. Sportsbooks
The list of failed U.S. sports betting operators is growing. Churchill Downs. Fubo. MaximBet. PlayUp. And now FOX Bet.
Per a statement, Flutter and FOX have reached an agreement on how to dissolve their relationship: “Flutter will retain ownership of PokerStars, in addition to US sports betting market leader FanDuel. 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.”
FOX Bet will undergo a phased shutdown throughout the month of August.
A Mutual Breakup
The dissolution of FOX Bet is long overdue. As Earnings+More reported, “in 2022 Fox Bet and PokerStars generated 3% of its revenue in the US but drove 30% of the EBITDA loss for the US unit.” On FOX’s end, the relationship has hindered its ability to sign marketing deals with other operators.
The end of FOX Bet was likely delayed by a disagreement over FOX’s option to purchase 18.6% of FanDuel. The two sides found themselves in arbitration, with FanDuel coming out on top, with the arbitrator finding that the options should be based on a FanDuel valuation of $20 billion in November 2022. FOX argued its options should be based on a previous valuation of $11.2 billion.
Plans Change
FOX Bet should have been a significant force in the U.S. sports betting arena. Following the fall of PASPA in May 2018, The Stars Group acquired Sky Betting & Gaming in a blockbuster $4.7 billion deal. Around the same time, Paddy Power Betfair acquired FanDuel for $550 million – one of the biggest steals the sector has ever seen.
Those two unconnected acquisitions would soon tie together and seal the fate of the yet-to-be-created Fox Bet.
The agreement between The Stars Group and FOX was announced in May 2019, about a year after the TSG-Sky merger. Fox Sports had the media brand, Sky Bet had the blueprint to replicate its UK success, and TSG was 100% committed to the project. But a funny thing happened, Paddy Power-Betfair purchased The Stars Group for $12.3 billion and created Flutter.
FanDuel was already a leading sports betting brand in the U.S., which meant the newly formed Flutter had a decision to make:
- Go all-in on FanDuel
- Go all-in on Fox Bet
- Push both brands
Flutter chose the first option. It put all its eggs into the FanDuel basket (and it’s hard to argue with the results), and, to borrow a term from European football, Fox Bet was relegated.
The brand was live in just four markets, New Jersey, Colorado, Michigan and Pennsylvania, and was a blip on revenue reports.
Per Earnings+More:
- The latest data from Michigan for July, for instance, showed effectively zero GGR for OSB and $2.8m of iCasino GGR.
- Similarly in Pennsylvania, OSB was at $200k while iCasino GGR was $3.5m or 2.6% market share.
- New Jersey fared slightly better with $2.6m of GGR in OSB and $2.5m in iCasino, giving it a combined 2.4% market share, according to Wells Fargo.
What Could Have Been
FOX Bet was one of the most intriguing experiments in the early days of legal U.S. sports betting. Unfortunately, that experiment was cut short, and we can only ask, “What could have been?”
The dream of a U.S. version of Sky Bet isn’t dead. FOX retains the rights to the brand the Super 6 promotion and intends to launch another version of the promotion in the future. But for the dream to become a reality, FOX will need to find a sports betting platform partner with a great tech stack and an appetite to take a considerable risk in the U.S. market and attempt to recreate Sky Bet, something that has, despite many attempts, never been accomplished in sports betting history.
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