One day after soft-launching Fubo Sportsbook in New Jersey, executives at FuboTV doubled down on plans to put its sportsbook business “under strategic review” as it looks for commercial partners to help run it.
New Jersey is the third US state for Fubo Sportsbook — it launched in Iowa last November and Arizona one month later.
Fubo Gaming, a subsidiary of FuboTV, has market access agreements with Caesars Entertainment in four states: Indiana, Louisiana, Mississippi, and Missouri.
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Sportsbook “Under Strategic Review”
We have concluded that we will no longer pursue this opportunity on our own. Accordingly, our interactive wagering business is under strategic review. The soft launch of the New Jersey sports betting app comes as FuboTV makes the case to shareholders and analysts that it can no longer afford to operate its sportsbook business without outside help.
In a letter to shareholders dated August 4, the company said it still believes in an integrated sports betting platform that includes live video and an online sportsbook.
“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,” the company said. “Accordingly, our interactive wagering business is under strategic review.”
The company added that it was “in internal and external discussions to determine the best path forward for Fubo’s gaming business and look forward to sharing more information.”
Market Changed Since Fubo Gaming Started
Building and running a national sportsbook requires significant capital. There are large startup costs and the risk of occasional losses, which also require capital. An opportunity to share more information came less than two weeks later, during an investor day presentation on August 16.
During the meeting, two executives — Fubo Gaming President Scott Butera and Chief Product Officer Mike Berkley — announced the soft launch in New Jersey had begun the day before.
Butera referred to the August 4 letter to shareholders during his comments.
“You may have seen that we’ve recently announced that we’re doing a strategic review of our wagering business,” Butera said. “And we’ve decided we no longer want to pursue this business on our own.
“Why would we decide that? Building and running a national sportsbook requires significant capital. There are large startup costs and the risk of occasional losses, which also require capital.
“When we started Fubo Gaming, markets were flush with cash, and investors value growth over profitability. Today, the market is the opposite. Capital is expensive, and investors want to see profitability now.
“In light of this, we are strategically evaluating our gaming business, including seeking potential partners who share our vision for the platform. However, we remain committed to our strategy of being the first true watch-and-wager platform.”
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Executive: Deposits Averaging $365
In an investor day presentation from the August 16 meeting, Butera reported that FuboTV registered 10 million users between June 2017 and June 2022.
Butera added that average first-time depositors parted with $680, while the average deposit size was $365, and the average first-time bet averaged out to $498. “Only Fubo’s platform allows a bettor to both watch and bet in one environment,” he said.
“We have a unique ability to acquire quality betters — over 96% of Fubo subscribers watch live sports, giving us a built-in customer base. Our subscribers stream over an average of 100 million hours of content a month. Last January, during football season, they streamed 140 million hours.
“We also offer 50,000 live sporting events a year. This gives us many opportunities to access potential betters, a huge distinction and advantage over our rivals.”