Flutter Entertainment CEO Peter Jackson said Thursday that the company had not yet decided what to do with FOX Bet but gave kudos to Fox Corporation, the joint venture (JV) partner it has been locked in a dispute with for nearly two years.
Fox sued Flutter in April 2021 over how much it should have to pay for an 18.6% stake in FanDuel. Last November, an arbitrator in New York ruled that Fox could buy the stake for $20 billion.
In a statement released Thursday as part of Flutter’s preliminary results for the entire year (FY) 2022, the company said the arbitration process with Fox “remains ongoing.” However, the arbitration tribunal of the Judicial Arbitration and Mediation Services (JAMS) resolved most of the lingering issues on November 4, 2022.
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FOX Bet Faces Uncertain Future
One thing that has not been resolved is the future of FOX Bet — the sports betting brand that Fox and The Stars Group (TSG) US first launched in September 2019. During a conference call with analysts Thursday, Jackson touched briefly on the subject to discuss the preliminary results.
“With respect to FOX Bet, one of the things that’s worth acknowledging is that they were transmitting the Super Bowl this year, and rather than promote FOX Bet, FanDuel was promoted,” Jackson said.
“I think that for these subscale operators, it’s very difficult to make money in [this market], and there is a long tail of operators that are probably struggling as FOX Bet is. We’ll review what we do with the business at the appropriate time.”
Jackson appeared to acknowledge that Fox had agreed to run advertisements promoting FanDuel during Super Bowl LVII and that the network had also decided not to air ads promoting FOX Bet. His remarks also strongly suggest that the two decisions were connected.
Fox Corporation Has Two Options
The JAMS ruling left Fox with two options. The tribunal gave Fox until August 2023 to decide.
Fox could decide to acquire the 18.6% stake in FanDuel it has long coveted for $20 billion, an amount based on FanDuel’s fair market value in December 2020.
It could also acquire up to 50% of TSG — a Flutter subsidiary that currently includes FOX Bet, Super 6, and PokerStars US. Still, Fox would first have to become a licensed operator in the four US states where FOX Bet is live: Colorado, Michigan, New Jersey, and Pennsylvania.
The second option would see Fox and Flutter agree to dissolve their JV. Under that scenario, FOX Bet would cease operations in the four states mentioned above, Flutter would retain PokerStars US and Super 6, and Fox would keep the FOX Bet name for future use.
Fox may decide to put the FOX Bet brand on ice while figuring out what to do with it. Or, FOX Bet could become one of several sportsbook brands that don’t survive, joining the likes of Fubo Sportsbook and TwinSpires.
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FanDuel Casino Taking Root in the US
Uncertainty over the future of FOX Bet is not affecting FanDuel’s performance in the US.
FanDuel reigned as the largest sportsbook in the US in 2023, holding a 50% market share (when coupled with FOX Bet) in Q4 2022.
Revenue from Flutter’s US division — which includes FanDuel, FOX Bet, TVG, PokerStars, and Stardust Casino — grew 67% year-over-year to $3.1 billion in FY 2022.
While sports betting revenue increased 81% year-over-year to $2.4 billion, Flutter said online casino revenue grew by 34% to $740 million in FY 2022, attributing the increase to “strong player growth and higher levels of engagement.
“Our focus on acquiring direct casino customers, our broadened product portfolio, and the new FanDuel Casino brand strategy led to a step up in momentum,” Flutter said.