Sports betting is a competitive industry and in the ever-evolving landscape of the sports betting market in the country, FOX Bet has become the newest addition to a list of now-defunct operators. The closing of Fox Bet marks a considerable shift in the industry, as well as raises questions regarding the challenges and complexities of establishing a successful gambling presence in a highly competitive market.
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Fox Bet’s rise and fall
In 2019, Fox Sports made waves by becoming the first major media company to create a sports betting product. Fox reportedly invested $236 million in The Stars Group as part of a strategic partnership to launch Fox Bet. Fox Bet was slated to be a one-of-a-kind online sports betting service as legacy media companies that own broadcasting rights to sports, including Disney and Comcast, had for a long time opted to stay in the background with sports betting.
Originally, Fox Bet launched 2 products, a free-to-play casino game, as well as a real money betting platform in states that offered legalized gaming. The plan was to rival established companies such as DraftKings and FanDuel. But things did go according to plan for Fox Bet.
The closure of Fox Bet adds to a growing roster of defunct sports betting operators in the country including respectable names such as Fubo, PlayUp, MaximBet, and Churchill Downs. The failure of these operators highlights the challenges inherent in the country’s evolving sports gambling landscape, characterized by intense competition, regulatory challenges, as well as ever-evolving customer preferences.
The news of Fox Bet’s demise has no doubt come as a shock to some, considering the considerable backing that the operator initially received. The collaboration between Flutter Entertainment and Fox Corporation appeared promising, as it fused Flutter’s expertise in sports gambling with Fox’s media brand strength.
Unfortunately, the partnership ultimately failed, leading to Fox Bet’s phased shutdown. The dissolution of Fox Bet was the result of a mutual agreement between Fox Corporation and Flutter Entertainment. Under the terms of the new deal, Flutter Entertainment will retain the rights to the Fox and Fox Bet brands including Fox Bet Super 6.
Fox also intends to debut an all-new Fox Super 6 game in the coming months. The decision to dissolve the partnership signifies the end of Fox Bet’s journey in the burgeoning sports betting landscape in the country. The process of shutting down is expected to last through the end of August, thus bringing to a close the end of Fox Bet’s operations.
Fox Bet’s closure was long overdue, as is evident from the brand’s financial performance report. In 2022, Fox Bet alongside PokerStars generated a mere 3 of revenue in the country but contributed to a massive 30% of the EBITDA loss for the country’s unit. This financial strain was undoubtedly a huge factor in the decision to dissolve the once-promising partnership.
It is also worth noting that the dissolution process was marred by constant disagreements between the 2 parties. A contentious issue was Fox’s option to purchase 18.6% of FanDuel. This disagreement led to the arbitration process, with FanDuel ultimately winning.
The arbitrator’s decision was based on a valuation of $20 billion for FanDuel, which was made in November 2022. This valuation of $20 billion was considerably higher compared to Fox’s proposed valuation of $11.2 billion.
The closure of Fox Bet has been especially disappointing considering the potential the brand once held. The Stars Group’s acquisition of Sky Betting & Gaming and Paddy Power Betfair’s acquisition of FanDuel were 2 major events that set the ball rolling for the creation of the Fox Bet platform.
The convergence of the 2 acquisitions, along with Fox’s media brand, appeared poised to make Fox Bet one of the biggest players in the sports betting arena in the country. However, a subsequent merger between Paddy Power Betfair and the Stars Group to form Flutter Entertainment also greatly changed the dynamics.
Lessons and lost opportunities
Flutter opted to prioritize FanDuel, an already recognized sports betting brand with a massive market share as discussed above. This decision is what effectively relegated Fox Bet to the sidelines, thus limiting its growth and market presence.
Fox Bet’s story serves as a cautionary tale for aspiring operators looking to make their mark in the US sports betting scene. Despite boasting powerful backers and recognized bands, success was not guaranteed for Fox Bet. The complex interplay of partnerships, regulatory landscapes, financial viability, and brand recognition are factors that can make or break operators in the highly competitive market.
The closure of Fox Bet also raises questions about the viability of replicating successful global sports betting brands in the US market. While Fox retains the rights to its brand and even has plans to debut a new version of the Super 6 offering, the problem remains in finding a suitable sports betting platform partner that can assist Fox in navigating the intricacies of the complex market.
Entering and thriving in the super competitive sports betting landscape in the US requires a meticulous approach. Before operators launch, they must carefully evaluate their target markets, figure out their unique selling points, as well as develop a strategy for growth.
Without these elements, it would be harder than it needs to be to navigate the pitfalls and create a sustainable future in a dynamic industry.
Final Thoughts
The growing number of failed sports betting operators in the US highlights the fierce competition, regulatory complexities, as well as financial difficulties inherent in the industry. These failures underscore the value of strategic planning, differentiation, financial sustainability, as well as compliance.
As the industry continues to evolve, aspiring operators must learn from the mistakes of their predecessors and adopt effective strategies that will allow them to thrive not just survive in the demanding landscape. The failures of Fox Bet and some of the other platforms mentioned above offer valuable insights for both aspiring entrants and established players in the industry.
