Flutter and Fox executives divided over Fox Bet as brand winds down
CEOs Peter Jackson and Lachlan Murdoch weigh in over joint venture business and potential post-breakup outlook
Flutter Entertainment CEO Peter Jackson has blamed the failure of the Fox Bet brand on product-related shortcomings, branding the failure of the business and decision to close a “disappointing” but necessary one.
Jackson spoke to EGR as part of Flutter’s H1 2023 financial results call, in which the operator revealed an EBITDA positive contribution of $100m from the firm’s flagship US sportsbook, FanDuel, which has emerged from being a DFS-only brand to become the market leader in US sportsbook since its acquisition in 2018.
In contrast, Fox Bet, which launched in September 2019 as a joint venture business between The Stars Group and Fox, has largely floundered in the US market, expanding into only four US states compared to FanDuel’s 19.
Flutter migrated the Fox Bet brand onto the Paddy Power Betfair proprietary technology platform in 2021, hoping to spur the growth of the brand.
However, last month, Flutter and Fox Corporation jointly confirmed the phased closure of Fox Bet over the next month, a process which is due to complete on August 31.
Throughout the course of the venture, Jackson has decried the Fox Bet brand’s product failings, a line he reiterated in his remarks concerning its eventual closure.
“When we acquired The Stars Group, I was always very clear that we were supportive of having a multi-brand strategy and we did everything we could to make the business successful, so it was disappointing that we reached the conclusion that we did, despite it being a pragmatic one.
“Subscale brands, and there were many of them in the US, can really struggle to make the economics work, particularly if the product isn’t good enough,” he added.
Addressing the wind down of the business, Fox Corporation CEO Lachlan Murdoch revealed in the global media giant’s Q2 2023 financial earnings call that the decision to end the Fox Bet joint venture had been exercised by Flutter, once it had invested in the business to a certain level.
“While it’s fair to say we were disappointed by this outcome, ultimately we aspire to be operators of a sports wagering business,” Murdoch told investors in the call.
“I can’t stress enough that we are extremely pleased with the financial outcome and the value creation through Fox Bet that we have generated for all of our shareholders.
“One of the remaining elements of value coming out of Fox Bet is the brand of Fox Bet Super 6, which is the most successful free-to-play wagering business in the United States, and which offers a tremendous funnel for wagering sites going forward,” he remarked.
Independent of the capital invested in Fox Bet, the Fox Corporation CEO acknowledged the increase in value of the 2.5% stake it holds in Flutter, suggesting those shares had doubled in value to $800m on the success of the firm’s sports betting empire.
Murdoch also drew on the increasing value of Fox’s 18.6% stake in FanDuel, the value of which has also risen substantially, wishing the business “every success” in the future.
He suggested that Fox may look to revive the Fox Bet business as a way of exploiting the brand equity resulting from the Fox broadcasting network in the US and the Fox Bet Super 6 brand in the future.
“Importantly, now, as we move forward, we are free to work with any of the other betting operators. Many of them have reached out to us already, so we feel our existing performance in Fox Bet has been terrific,” Murdoch said.
“We’ve built a tremendous amount of value and we’re really well-positioned to continue to benefit from the emergence of sports betting in the United States,” he added.