Fox Corp.’s desire to be a leader in the U.S. sports betting market has hit a bump in the road as online sports betting platform Fox Bet struggles and faces an ownership dispute with its partner, FanDuel owner Flutter Entertainment.
Fox partnered with Flutter — the world’s largest listed gambling group — after Flutter bought The Stars Group, the online gambling company that created Fox Bet, for $6 billion in 2019.
Fox Bet has failed to gain traction in the U.S. betting market due to its poor reach and tech.
- The app is only available in four states: Colorado, Michigan, Pennsylvania, and New Jersey.
- It has less than 1% of the U.S. online betting market outside Nevada (FanDuel has 40%).
- It is operating on an app that “hasn’t received the updates required to compete in the U.S.,” Wagers.com senior analyst Steven Ruddock told Bloomberg.
The failure to expand has caused a rift between Fox and Flutter due to an inability to agree on a price to exercise Fox Bet’s option to purchase 18.6% of FanDuel at an $11.2 billion valuation.
Flutter bought a 37.2% stake in FanDuel from Fastball Holdings for the same value in December 2020. FanDuel and Fox are set to go into arbitration in June to resolve the issue.
Flutter reported a pre-tax loss of $383 million in 2021 behind efforts to curb gambling addiction but generated $8 billion in revenue in FY2021, a 37% increase year-over-year.
FanDuel pocketed $2 billion in revenue in FY2021, a 113% uptick compared to the year prior.