Flutter Entertainment has announced that the Fox Bet sportsbook will be shuttered, officially bringing an end to the once-promising experiment.
The company announced, along with the Fox Corporation, that the sportsbook would see a phased closure through August 31, with bets no longer being accepted as of Monday (July 31).
In an FAQ sent to customers, the closing of the sportsbook was described as happening “for commercial reasons.”
Balances will be available to withdraw on the Fox Bet application through August 31, after which time the balances will require PokerStars applications to access. PokerStars is not affected by the Fox Bet closure.
The sportsbook had only launched in four states: New Jersey, Pennsylvania, Michigan, and Colorado.
The 2019 tie-up between Fox and The Stars Group to form Fox Bet was initially seen as an intriguing entry into the then nascent U.S. sports-betting scene. At the time, it was the first significant foray from a major media brand into the sports-betting space.
For the Stars Group was an attempt to recreate the UK's successful Sky Bet formula in the U.S., using a combination of free-to-play and real-money betting and the brand recognition of a major sports broadcaster in Fox.
However, only a few months later, Flutter acquired Stars for $6bn and although the company initially spoke of its plans to operate a multi-brand strategy in the U.S. similar to its strategy in major European markets with separate Paddy Power and Betfair brands, it became clear quickly that Fox Bet’s days were numbered.
John DeCree, director of global gaming and head of research with CBRE Securities in Las Vegas, noted that there was less of a need for Fox Bet following the merger between Stars Group and Flutter.
DeCree said Flutter never had “any economic incentive” to do the more focused marketing or introduce a new tech product when it was more focused on FanDuel. Even with a mobile first strategy, he said, daily fantasy sports were a huge industry.
“It was tough for everyone to come behind,” DeCree said. “[FanDuel] were way out in front.”
The overwhelming success of the FanDuel brand, particularly when compared with Fox Bet’s paltry market share in the few markets where it launched, as well as the limited market access in many key states, made a multi-brand strategy more difficult to execute in the U.S.
Ultimately, Fox Bet only launched in two states from the day the merger was completed until its closure.
“Fox Bet had opportunity in this market to create a synergist approach between wagering and media but never seemed to catch hold for a host of various reasons,” said Brendan Bussmann, managing partner of B Global in Las Vegas.
“Considering the state of play, it makes sense for Flutter to put all of their effort behind FanDuel in the United States as it currently sees a period of consolidation with both Fox Bet and the transition of PointsBet.”
“Fox Bet was handcuffed from the beginning and really did not have a chance to do everything it could have been in this competitive market,” he added. “The departure also should be a wakeup call though that media still does not understand how to maximize the relationship.”
As part of the Flutter-Stars merger, Fox received an option to purchase 18.6 percent of FanDuel. After an at-times bitter dispute between Fox and Flutter, an arbitrator ruled in November that Fox can exercise a ten-year call option to purchase its share of FanDuel, with the current price being just over $4.3bn.
Under the arbitrator’s ruling, Fox had the right to become licensed operators and acquire up to 50 percent of The Stars Group’s U.S. business from Flutter. If it did not do so, both parties would have the right to terminate the agreement in relation to Fox Bet in August.
Flutter retains ownership of the PokerStars brand, while Fox retains future use of the Fox Bet brand, as well as the Fox Bet Super 6 free-to-play brand. The announcement Monday said that Fox intends to launch a new Super 6 game “later this summer.”
Fox Bet joins the list of sports-betting operators that quickly exited the US market after failing to make a significant dent in market share, including Churchill Downs’ TwinSpires brand and several media branded efforts such as Fubo Gaming and MaximBet.