FuboTV announced Wednesday that it acquired US sportsbook firm Vigtory and it will launch a full-fledged sportsbook later this year. The New York-based streaming service said it would be landing into the iGaming and sports betting arena on the company’s last earnings call in November. Shares are soaring high again following this announcement.
The financial terms of the acquisition were not revealed. However, FuboTV, which positions itself as a sports-first streaming platform, said the transaction is expected to close in the current quarter.
What FuboTV-Vigtory Deal will Cover?
Under the deal, FuboTV will gain Vigtory sportsbook platform and online gaming assets. Vigtory’s original plan was to remain a low-margin bookmaker, though it is not known whether FuboTV will continue with Vigtory’s initial insight.
Chicago-based Vigtory was founded in 2019 and began its mobile sportsbook operation last fall. The emergent sportsbook company targeted big money players with lower juice. For instance, if a Vigtory competitor offers -110 odds, the new company posts the same sport at -105 or better. The founder of the upstart company, Sam Rattner, and Co-CEO Scott Butera will join FuboTV’s gaming division as COO and president, respectively.
While not as high profile as DraftKings and FanDuel in the US sports betting space, FuboTV’s acquisition advances a significant merger of the two businesses. Founded in 2015 as an internet-delivered pay-TV operator, the deal puts Fubo as more than a streaming company.
FuboTV’s Sports Betting Plans
The latest deal between FuboTV and Vigtory is another partnership between a media company and a sports betting entity. The combination is part of Fubo’s expansionist plans into digital betting.
Besides the acquisition, FuboTV laid out its sports betting plans that will be kicked off with a launch of a free-to-play prediction game in 2021 powered by the Balto Sports’ technology. Initially, this product will remain the only gaming feature of the app before being integrated into the core streaming product. After that, Fubo will launch a full-fledged betting app powered by Vigtory technology, which will then also be folded into the streaming product.
Fubo CEO David Gandler said sports wagering was highly complementary to the Fubo business. He said he did not see betting as simply an add-on product to the company. “We not only anticipate sports betting to become a new line of business and source of revenue, but we also believe that it will increase user engagement on FuboTV.” He said the overall impact will result in higher advertisement monetization, better subscriber retention, and decreased subscriber acquisition costs.
FuboTV was previously criticized for the margins on the company’s subscriber-based business model. The new plans with sports betting onboard would also serve as a way to solve those issues.
Tricky Path Ahead Despite Bullish Market Trend
On Wednesday, FuboTV witnessed a significant increase of 34% in its stocks, growing more than $9 a share to finish out the day at market close at over $36. Despite the optimistic market reaction, there has been an uneven history of media entities pivoting to sports betting which raises some concerns about the road ahead.
Still, Gandler sought to play down the tricky path ahead, saying the Vigtory acquisition would help solve two issues that media entities usually face. “First, Sam and Scott have huge experience navigating the complex gaming regulatory environment… Second, Fubo can leverage its own user behavior data to understand our consumers’ viewing preferences, and when and how to prompt them to consider placing wagers.”