Flutter cutting stateside weight with FOX Bet closure

Flutter Entertainment’s joint venture with the FOX Corporation, FOX Bet, will cease operations later this year, according to a statement from the FTSE100 gaming group.

A ‘phased closure’ of the online sportsbook will occur between 31 July-31 August 2023. However, FOX will retain a 2.5% stake in Flutter as well as the option to acquire 18.6% of FanDuel, the latter’s flagship brand in the US market.

FOX will also retain future use of the FOX and FOX Bet brands, including the FOX Bet Super 6. The New York City-headquartered entertainment group has plans to launch a new FOX Super 6 game this summer, Flutter stated.

The closure of FOX Bet marks a reduction in Flutter’s US portfolio, although given the success of FanDuel in the stateside betting and gaming market, this hardly represents a slowdown or wind down in the pace of its business there.

FOX Bet has been operated as a joint venture between FOX’s FOX Sports division and the US facing department of Flutter’s The Stars Group (TSG) holding – most widely known for its PokerStars igaming/ipoker brand – since the two conglomerates first partnered in 2019.

Amid a proliferation of betting brands launching in the US sector since the repeal of PASPA opened the doors to the multi-billion dollar market in 2018, FOX Bet has not stood out as much as other prominent operators but still made some reasonable contributions to Flutter’s business.

For example, the FOX Bet and PokerStars US holdings accounted for 8.4% of Flutter’s US revenue in Q1 of 2021, in a quarter which saw the group’s total US income rise 12% to £288m.

However, over the past few years it has been somewhat dwarfed by Flutter’s FanDuel holding, which has emerged as the clear market leader and largest US sportsbook, followed by DraftKings and BetMGM – the latter another joint venture between Flutter’s fellow LSE-listed gaming group Entain and US-based giant MGM Resorts International.

Having built up a strong reputation and following as a daily fantasy sports (DFS) platform, FanDuel merged with Paddy Power Betfair in 2018 to make its transition into the regulated betting market amid the PASPA repeal.

Flutter’s latest group-wide trading update for Q1 2023 saw FanDuels revenue grow 92% to £908m, delivering its products to over 1.5 million new customers and increasing its sportsbook revenue alone by 147%.