Fox Corporation's betting plan has hit a wall due to its struggling Fox Bet website and because of ongoing negotiations with partner Flutter Entertainment regarding ownership issues.
Fox Bet has been up and running for the past three years, yet the site is currently available in only four states.
Fox Chief Executive Officer Lachlan Murdoch said the company is limited on where the site can be available.
“We don’t control it – because we’re not allowed to,” Murdoch said. “It’s only rolled out in four states, which we’re disappointed in, and we’d like to see it rolled out in many more.”
Since the Supreme Court ruled in favor of legalized sports betting in 2018, the market has grown significantly. Regulated sports betting is currently available in 30 states. Yet despite the growing market, other operators along with Fox have been struggling to maintain a foothold in the coveted market.
Both Caesars Entertainment and Wynn Resorts have decreased their marketing spending, and Golden Nugget's online gaming business is being sold to DraftKings.
Fox’s relationship with Flutter began when the latter purchased the Stars Group, which Fox Bet created in 2019. Though Flutter currently owns Fox Bet, Fox has the option of acquiring 50% of the business.
The complication stems from Flutter’s existing sports betting site, FanDuel. According to Vixio GamblingCompliance, Fox Bet has less than 1% of the US online sports betting business outside of Nevada, compared to FanDuel’s 40% share.
James Kilsby, an analyst who follows the industry at Vixio, said: “FanDuel has been so phenomenally successful it’s hard not to make the argument for investing more into that brand, especially in such a competitive market, rather than spreading any investment across a dual-brand strategy.”
Murdoch said that Fox is “in active conversations with Flutter in terms of our relationship and how we handle it going forward.”
Negotiations are on the table for Fox to purchase 18.6% of FanDuel. The two companies are set to go into arbitration in June if they cannot reach an agreement on price.
Flutter Chief Executive Officer Peter Jackson said that the company has not reached an agreement with Fox regarding its FanDuel investment option.
“If we can’t get the deal that’s right for our shareholders, we’re very comfortable going to arbitration,” Jackson said.
