An impasse with FOX Bet is stalling plans at FOX Corp to establish itself as a major player in the US sports betting space and frustrating FOX chief executive officer Lachlan Murdoch, Bloomberg reported.
Lack of Development at FOX Bet
FOX CEO Murdoch voiced his frustration at the lack of resolution related to the ongoing ownership issues with Flutter Entertainment. The complicated relationship with the Irish-based gambling group dates back to 2019 when Flutter acquired The Stars Group (TSG), which created FOX Bet in partnership with the Murdoch family.
According to Murdoch’s words at an investor conference this month, FOX is not allowed to control the expansion of the fledgling sports betting brand and much to his disappointment, the brand has “rolled out in four states” only.
And its poor performance is weighing on FOX and the company’s plans to take advantage of the “huge opportunity” sports betting presents, especially in the light of the relatively smaller scale of FOX business following the sale of its entertainment assets to Walt Disney Co.
The issue arises with Flutter’s lack of interest to develop a second sports betting brand now that the group has a large and industry-leading sports betting site in FanDuel and is reluctant to spread their investment in an industry that already started consolidating.
Major operators like Caesars Entertainment and Wynn Resorts announced significant marketing spending cuts, while Golden Nugget Online Gaming will soon become part of DraftKings.
Heading for Arbitration
Flutter’s reluctance to invest in a dual-brand strategy is leaving FOX with the option to acquire 50% of FOX Bet. FOX can also purchase 18.6% of FanDuel but this option is creating much of the frustration as both parties cannot agree to the exercise price for it and are heading for arbitration in June.
FOX CEO stated the company was in active conversations with Flutter in relation to their partnership going forward but the Irish company has no intent on budging. Flutter CEO Peter Jackson reiterated the company’s stance during the March 1 earnings call, stating that “if we can’t get the deal that’s right for our shareholders, we’re very comfortable going to arbitration.”
Expectations were high in 2019 when FOX Bet launched but according to analysts tracking the sports betting industry, it is now unable to compete with the major players in the sports betting space, falling behind in terms of technology and platform.
FOX Bet teamed with on-air personalities Terry Bradshaw and Clint Bowyer and deployed the free-to-play contest FOX Bet Super 6 during NFL games, seeking to engage with potential bettors but Murdoch believes it can do much more.