Fubo Sportsbook was a major topic of discussion during FuboTV’s Q2 earnings call. The streaming service, which currently has a branded sportsbook live in Arizona and Iowa, is placing the venture under “strategic review”. Over the course of the earnings call, FuboTV leadership made clear the hope is to find a good strategic partner to grow the sports betting arm in a more fiscally sensible way.
The company still believes in the long-term potential, but realizes the short-term fiscal costs were detracting from the overall goal of making the streaming service profitable.
In a letter to shareholders released shortly before the call, the company explained the decision:
“We continue to believe that an integrated wagering platform, offering both live video and a sportsbook, will result in the best viewing and gaming experience for consumers. However, as we have evaluated how best to scale these capabilities in today’s market, we have concluded that we will no longer pursue this opportunity on our own. Accordingly, our interactive wagering business is under strategic review.”
In the earnings call, FuboTV CEO David Gandler pointed out that things have changed dramatically since Fubo Sportsbook first entered the market last year:
“We decided to enter the wagering business in early 2021. At a time when the business climate and efficient cost of capital provided the runway to develop new business clients with longer profitability time horizons. Now with a recession and inflation hitting 40-year highs that no longer holds true.”
Fubo Sportsbook still on track to launch in New Jersey
Even though the sports betting project is seeking a partner, it will continue to move through the approval process to launch in New Jersey. The letter noted, “We recently submitted our Fubo Sportsbook mobile app to the New Jersey Division of Gaming Enforcement and expect to be approved in time for the 2022 football season. In addition to New Jersey, we expect to launch an additional market in the ensuing weeks.”
While the company may be moving forward with New Jersey, that is largely a function of the process already being underway, not a desire to expand the company footprint at this time.
“I think the key message to investors is we’re not planning to go out and actually launch 11 markets as we you know, given the market access deals we did. So we are looking for partners, we will slow roll until we find the right partner. But you know, we’re having conversations.”
Fubo Sportsbook hopes market access will entice new partners
As Gandler noted, Fubo has a number of strategic partnerships ensuring market access in other states, including:
- Indiana, Louisiana, Mississippi, Missouri, and New Jersey via Caesars Entertainment
- Ohio via the NBA Cleveland Cavaliers
- Pennsylvania via The Cordish Companies
- Texas via The Houston Dynamo Football Club
- “While our disciplined sportsbook progress continues, in light of a rapidly-evolving macro-economic environment, we believe it is important to be even more capital efficient than originally scoped. We are taking steps to de-risk our business and have made the decision to no longer go down the wagering path independently. As a result, we’re evaluating strategic opportunities for our wagering business,” the letter further stated.
On the call, Gandler pointed out that market access is part of the appeal for a new potential partner.
“We have some value to offer a partner who’s looking to quickly get into the business and, at the same time, not have to worry about spending a lot of money marketing to consumers, given the number of customers we have, as well as the number of trials that are coming in on a regular basis,” he said.
Moreover, he remains committed to betting being a core component of the business strategy long-term:
“The reason I’m still bullish on the intersection of video and gaming is that integrated experiences, build defensibility and it’s something that is a cornerstone of what we’re doing, given the fact that we’re a sports platform.”