FOX Bet’s Future Hangs in the Balance, Decision Deadline Approaching
News Corp, the New-York based media conglomerate owned by Rupert Murdoch (head offices pictured), is on the brink of having to make a significant decision regarding the future of its online sportsbook, FOX Bet.
The decision is prompted by a clause in FOX Bet’s operating agreement with betting giant Flutter Entertainment, which allows the Dublin-based company to sever ties with the company in August.
This move could compel News Corp to either take full control of FOX Bet, or let it dissolve.
FOX Bet originally signed a deal with Stars Group in 2019, then owners of PokerStars, to run it’s U.S. sports betting operations. However, just a few months later, Flutter announced its intention to buy out The Stars Group for $12.2 billion. It completed that purchase in 2020, thus inheriting the FOX Bet Contract.
Flutter, however, also then bought FanDuel – the largest U.S. sports betting operator by market share. News Corp thinks this has led it to abandon FOX Bet. Flutter execs, meanwhile, have cast thinly veiled references to FOX Bet’s poor performance in shareholder meetings.
Now the Murdoch empire is looking at a looming deadline on the issue.
Market Share Struggles
FOX Bet’s performance in the U.S. market has been underwhelming, with the operator currently live in only four states and holding less than 1% market share.
These lackluster figures have been a point of contention between News Corp and Flutter Entertainment.
News Corp alleges that Flutter has not committed the necessary resources to make FOX Bet a viable competitor in the US market.
However, its claims were dismissed by the Judicial Arbitration and Mediation Services regulatory authority in New York last November.
On the other hand, the same hearing also affirmed News Corp’s right to acquire 18.6% of Fan Duel, due to its previous investments in Flutter. That could prove a very profitable option for News Corp, considering FanDuel’s $22 billion valuation and market-leading status.
News Corp also recently lost out on investments in Australian sports betting startup Betr (not to be confused with the Jake-Paul backed U.S. micro betting app).
Last year it raised $65 million, backed by the prospect of a potential News Corp and Fox Corp merger, to invest in a takeover of Betr. It planned to remarket the brand as the new international FOX Bet, as reported by Australian Financial Review.
However, that deal has now gone cold.
“News Corp has well and truly lost its shirt on the gee-gees,” the paper said.
Potential Outcomes for FOX Bet
Several unknowns remain, however. Flutter looks likely to give up on FOX Bet when the contract expires. But nothing is certain.
The betting giant is going through somewhat of a restructuring in recent months. It is moving towards its planned migration to the New York Stock Exchange from London, and it appointed a new U.S.-based Chairman back in April.
If Flutter decides to part ways with FOX Bet, as expected, News Corp has four options: invest the necessary capital to make the brand viable, sell up to someone else, find a new partner, or let the company dissolve.