Sports-first live TV streaming platform FuboTV announced Monday that the company will close its Fubo Gaming subsidiary and cease operations of its Fubo Sportsbook effective immediately. The move follows a recent strategic review of the product and comes as the business focuses on its profitability goals and core segments amid a “challenging” financial market.
FuboTV said its preliminary results for the third quarter of the year, announced yesterday, demonstrate “a continued progression” towards the company’s 2025 profitability targets. Given these goals, the firm has now completed its previously announced strategic review of the Fubo Gaming business, which was first unveiled back in August.
At the time, Fubo had said it would no longer be pursuing wagering “independently,” citing that the market had “changed.” A letter sent to shareholders that month hinted that Fubo would be looking to partner its streaming platform with another sportsbook, and that the Fubo Sportsbook would continue to operate in states in which it was already live while exploring potential buyers or partners for the product. However, these alternatives have now been dropped.
“While multiple parties expressed interest in the business, none of these opportunities would have allowed Fubo to lower its funding requirements and generate sufficient returns to shareholders,” the company said on Monday. “As a result, FuboTV will close its Fubo Gaming subsidiary and cease operation of its owned-and-operated Fubo Sportsbook.”
Fubo’s strategic review of its gaming subsidiary came less than a year after the launch of its sportsbook product, as losses in the segment widened for the company. Fubo Sportsbook made its debut in late 2021 after the company acquired sports betting firm Vigtory in January of that year. The product sought to leverage Fubo’s live TV streaming capabilities, integrating them with the wagering platform, resulting in a “viewing and gaming” experience for customers.
However, as the company evaluated how best to scale these capabilities in today’s market, it concluded that pursuing the opportunity on its own was no longer sustainable. But given how much Fubo had already built out, the company began exploring partnerships with other firms earlier this year: its foundation in the industry was deemed as “attractive” to partners looking to quickly get into the business, given Fubo’s market access to a number of states.
The new quarterly report shoots down the chances of a partnership. “Following our previously announced strategic review, we have concluded that continuing with Fubo Gaming and Fubo Sportsbook in this challenging macroeconomic environment would impact our ability to reach our longer-term profitability goals,” said David Gandler, co-founder and CEO of FuboTV.
“Therefore, we have made the difficult decision to exit the online sports wagering business effective immediately,” the CEO explained. “We look forward to providing more color, as well as discussing our full third quarter 2022 results and full-year outlook, on our November 4 earnings call.”
Even during its strategic review process, Fubo Sportsbook continued to expand in the US, launching in new jurisdictions. Early last month, the product went live in New Jersey, in time for the NFL season. “Launching Fubo Sportsbook in New Jersey is an important early step in the development of our integrated platform,” said Scott Butera, Fubo Gaming president, at the time.
FuboTV is a virtual multichannel streaming bundle, similar to YouTube TV and Hulu with live TV. However, unlike those other services, Fubo seeks to focus on engaging sports fans through content specifically covering this area. Fubo Gaming described its sports betting product as the first to integrate wagering and live TV streaming “in one ecosystem.”
At the time of the sportsbook’s closure announcement, the product was available in three states: New Jersey, Arizona and Iowa. Fubo Sportsbook had market access in 10 states –including California in the event of legalization–, which company officials believed could have been a potential selling point when looking for partners.
Fubo Sportsbook’s closure announcement comes as FuboTV announced preliminary results for its business at large, with North American revenue for Q3 expected to increase by 34% year-on-year to about $120 million, while Rest of World revenue is forecast to reach at least $5.5 million.
Original article: https://www.yogonet.com/international/news/2022/10/18/64668-fubotv-to-close-gaming-subsidiary-and-cease-sportsbook-operations
