Flutter Shutting FOX Bet, Will Close in August
Global betting giant Flutter Entertainment, in partnership with Fox Corporation, has announced the closure of their joint U.S. sports betting venture, FOX Bet.
The phased shutdown of the sports betting platform will take place from this Monday, July 31, to August 31, Flutter announced in a statement.
Despite the closure, Fox Corporation will retain its 2.5% stake in Flutter and its option to acquire 18.6% of FanDuel.
The move comes ahead of the August 31 deadline clause in the operating agreement between the two companies which will allow Flutter to end the contract.
A Brief History of FOX Bet
FOX Bet began in 2019 as the brainchild of new Fox Corporation head, Lachlan Murdoch.
In May that year Fox Corporation collaborated with PokerStars owners The Stars Group to launch a new sports betting service in the US.
The initial plan was for FOX Bet to launch two separate products – a nationwide free-to-play game and another focused on legal sports betting state markets.
Fox Sports, a subsidiary of Fox, acquired a minority holding in The Stars Group for a price of $236 million for a 4.99% stake.
The Stars Group was granted an exclusive license to use certain Fox Sports trademarks for games and online sports wagering.
FOX Bet debuted in New Jersey in September 2019, replacing the existing BetStars brand. Since then, it has expanded to Colorado, Michigan, and Pennsylvania.
However, in May 2020, Flutter Entertainment acquired The Stars Group and thus inherited the FOX Bet contract. Later that year, Flutter also acquired another 37% stake in leading U.S. online sportsbook FanDuel, bringing it to 97% control.
With FanDuel swiftly becoming one the nation’s leading sportsbooks, and FOX Bet struggling to break 1% market share, things quickly began to look difficult for the Fox Corp operation’s relationship with Flutter.
Disputes and Arbitration
As part of its deal with The Stars Group that then transferred to Flutter, Fox Corp has a 2.5% stake in Flutter and an option to buy 18.6% of FanDuel.
With FOX Bet’s operations not being too promising, a significant share in one of the most popular U.S. sportsbooks is understandably a valuable consideration for Fox.
In April 2021, Fox filed an arbitration suit against Flutter over a dispute regarding the purchase price.
Fox claimed that its agreement with Flutter was to purchase the stake for the price it would have cost in December 2020.
Despite Flutter’s arguments, a New York arbitrator ruled in November 2022 that Fox could acquire the stake from a $22.0 billion valuation. The tribunal ruled that the price payable for the option was based on FanDuel’s fair market value as of December 3, 2020.
Fox Corp and Flutter often publicly traded barbed comments on the issue since 2021. Fox says Flutter underfunded FOX Bet to focus on FanDuel, and Flutter hasn’t been shy in reporting on FOX Bet’s contributions to its overall income.
Flutter lost $313 million on the U.S. market in 2022, despite owning leading operator FanDuel. Some $91 million of that loss was FOX Bet.
“Between half and two-thirds of that go away” without FOX Bet on Flutter’s books, said Flutter CEO Peter Jackson back in March 2023, as reported by Reuters.
Related: The best U.S. sportsbooks, rated and ranked by our experts
The Future of Fox Bet and FanDuel
Fox will retain future use of the Fox and FOX Bet brands, including the FOX Bet Super 6 prediction game. A revamped version of this game is expected to go live later this year.
Fox will also retain its option to acquire 18.6% of FanDuel, although a $22 billion price tag could take some restructuring to afford it – even for the Murdoch empire-backed company. It has 10 years to exercise that right, with a 5% compounding adjustment to the price added every year.
FOX Bet’s closure demonstrates the competitive nature of the U.S. sports betting market, especially for smaller operators. The FOX Bet online sportsbook gained less than 1% market share across four states it has opened in since 2019.
Just this year, struggling PlayUP sportsbook has ceased operations, and Australia-based PointsBet decided to sell up its U.S. interests to Fanatics.
Most Popular
Nevada’s Gaming Distance Laws Have Quietly Changed
Nevada lawmakers recently amended a 26-year-old law that restricts the distance between casinos and schools or places of worship. However, the potentially controversial change was implemented without public discussion or […]
Yaamava’ Resort & Casino Wins USA Today’s ‘Best Casino Outside of Las Vegas’ Award
The Yaamava’ Resort & Casino at San Manuel, located in Highland, California, has recently received the prestigious title of “Best Casino Outside of Las Vegas” (2023) in the USA Today […]
Blackstone Contemplating Selling Half of its Bellagio Real Estate Stake
Blackstone Inc is reportedly considering selling half of its stake in the real estate of the Bellagio hotel and casino resort in Las Vegas. The giant New York-based investment firm […]
Thrilling Las Vegas Grand Prix Ends in Comeback Max Verstappen Win
In an eventful and historic Las Vegas Grand Prix, Red Bull’s Max Verstappen overcame multiple challenges to clinch his record-extending 18th victory of the season. The Formula 1 race in […]
Michigan Head Football Coach Jim Harbaugh Facing Lengthy Future Suspension
When this last weekend began, it looked like the NCAA and Michigan head football coach Jim Harbaugh had agreed to a resolution of his issues. His problems were regarding his […]
