FuboTV cites macroeconomic challenges as sportsbook business goes under strategic review
Sports streaming service fuboTV has placed its online betting business under review and is likely to pull back from its proprietary sportsbook strategy.
The Fubo Sportsbook is currently available in two US states – Iowa and Arizona – and recently completed its licence submission to the New Jersey Division of Gaming Enforcement.
It expects to be approved in that market in time for the 2022 American football season, which kicks off in September.
During the company’s Q2 2022 earnings call with investors, however, FuboTV co-founder, CEO and director David Gandler said: “We continue to believe that an integrated wagering platform, offering both live video and the sportsbook will result in the best viewing and gaming experience for consumers.
“However, 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 lines with longer profitability time horizons.
“Now, with the recession and inflation hitting 40-year highs; that no longer holds true. We recognise that the market has changed.”
FuboTV CEO David Gandler: “We continue to believe that an integrated wagering platform, offering both live video and the sportsbook will result in the best viewing and gaming experience for consumers.”
The business is currently exploring options to find the best path forward to scale its sportsbook offering, Gandler added, before reiterating that the business intends to turn passive sports viewers into active consumers through the integration of products including pick’em games and a sportsbook.
In a letter sent to investors, the business added: “As we have evaluated how best to scale these capabilities in today’s market, we have concluded that we will no longer pursue this [sportsbook] opportunity on our own.”
It is not yet clear which avenues FuboTV may explore for its online betting division. The firm could seek partnerships with existing sports betting suppliers in the US marketplace in order to ease the cost and technology burden associated with running an in-house sportsbook.
FuboTV generated total revenue of $222m in Q2 2022 as its subscriber base grew by some 57% year-on-year to 1.3 million users worldwide.
However, the business registered a $91.3m operating loss for the quarter, and said it does not expect to be free-cash-flow positive until 2025.
Despite this, the firm’s share price soared by nearly 17% in Friday (5 August) trading on the New York Nasdaq.
FuboTV is not the only sports streaming company pursuing a B2C sportsbook strategy. In April of this year, loss-making streaming giant DAZN unveiled plans to launch a sports betting operation via a newly created DAZN Bet brand.
The company opted against a proprietary sportsbook strategy and instead partnered up with Gibraltar-based technology provider Pragmatic Group.