The rumors have now turned into reality as Flutter Entertainment and News Corp officially announce the decision to shut down FOX Bet, the sports betting platform that once held great promise. Speculation about FOX Bet’s fate had been swirling, and the press statement issued on Sunday confirmed the inevitable.
FOX Bet to undergo a phased closure
As part of the deal, FOX Bet’s operations will undergo a phased closure between July 31 and August 31, 2023, marking the end of its short-lived existence. The Dublin-based Flutter Entertainment gained control of FOX Bet through its acquisition of the Stars Group in 2020, forming the largest online gaming entity in the world. However, FOX Bet soon fell into a state of neglect, with News Corp accusing Flutter of diverting attention towards FanDuel, where it owned a staggering 95% stake.
While FOX Bet may be disappearing from the sports betting landscape, hope lingers for its potential revival in the future. Under the terms of the Stars Group deal, Flutter also gained control of the US arm of PokerStars, which it will continue to operate. FOX will retain the rights to utilize the FOX and FOX Bet brands, including FOX Bet Super 6, and plans to introduce a fresh FOX Super 6 game later this summer.
A hard but financially needed decision
As FOX Bet faced significant financial losses, Flutter’s decision to close the platform aligns with its pursuit of profitability and sustainability. Losing approximately $60 million annually, FOX Bet represented nearly 20% of Flutter’s earnings before interest, taxes, depreciation, and amortization (EBITDA) loss in the first half of the year, making the closure a prudent course of action.
While FOX Bet’s exit may be disheartening, Fox Corp will not be empty-handed. Keeping the platform running would have required substantial financial contributions from the media giant. By discontinuing FOX Bet, Fox can now allocate its capital to potentially more lucrative ventures. Furthermore, Flutter has reaffirmed its commitment to honor Fox’s rights to acquire up to 18.6% of FanDuel in the future. With FanDuel estimated to be worth an impressive $20 billion, Fox has a multibillion-dollar prize awaiting if it chooses to exercise those rights.
Redirection for a bigger profit?
Through the acquisition of the Stars Group, Fox also obtained a 2.5% stake in Flutter, proving to be a valuable asset. This upside could further accelerate when Flutter lists its shares in New York later this year, setting the stage for exciting possibilities for both entities. But there is still no guarantee of whatsoever, which is why FOX Bet had to close down for a while.
While FOX Bet’s departure marks the end of an era, the ever-evolving landscape of sports betting leaves room for future ventures and innovations. Whether FOX Bet will rise from the ashes like a phoenix remains uncertain, but Fox Corp’s continued involvement in the gaming and betting industry, coupled with Flutter’s commitment to FanDuel, promises an exciting future for the world of sports betting and online gaming!
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