FuboTV's sports betting business under "strategic review" as company seeks buyer or partner for its sportsbook

Sports-first live TV streaming platform FuboTV announced it will "no longer pursue online wagering independently," citing that the market "has changed." The announcement was done via a letter to shareholders, ahead of its Q2 earnings call Thursday. Thus, the company will be reviewing its betting business less than a year after the launch of its sportsbook, as losses in the segment widened.

The letter hints that FuboTV could be looking to partner its streaming platform with another sportsbook that accepts legal wagers. The announcement further explained that Fubo Sportsbook will continue to operate in states where it has already been approved -including Iowa and Arizona-, while the company looks for a buyer or partner for its product.

"We continue to believe that an integrated wagering platform, offering both live video and a sportsbook, will result in the best viewing and gaming experience for customers," the letter reads. "However, as we have evaluated how best to scale these capabilities in today’s market, we have concluded that we will no longer pursue this opportunity on our own."

Fubo bought sports betting company Vigtory in January 2021, with plans to integrate its streaming product with sports betting, launching by the end of that same year. However, FuboTV CEO David Gandler said that while the firm is still bullish about the gaming industry, "in light of the current economic environment, the company has made the decision to no longer pursue online wagering independently" and is "evaluating strategic opportunities."

The cost of driving business has been assessed as unsustainable on its own, but given how much Fubo has already built out, Gandler said the opportunity to partner with other companies could be "quite compelling." And at the same, this foundation in the industry could be attractive to partners looking to quickly get into the business.

According to recent data, Fubo Sportsbook has less than 0.1% market share in Arizona and Iowa. In the month of May, Fubo Sportsbook took $450,000 in bets in Arizona, or 0.1% of the market; while it took in $125,000 in Iowa, or 0.09% of the state’s online handle. This could be due to the large competition that Fubo faces, as major sportsbooks -including giants DraftKings, FanDuel, and Caesars-, have approximately 75% of the market share, according to research firm Eilers & Krejcik Gaming LLC.

The company first debuted its Fubo Sportsbook in November 2021. According to the letter, the operator has also submitted an application launch in New Jersey. "We recently submitted our Fubo Sportsbook mobile app to the New Jersey Division of Gaming Enforcement and expect to be approved in time for the 2022 football season," the company further explained.

In addition to New Jersey, the company expects to launch its product in an unnamed additional market in the "ensuing weeks." Furthermore, Fubo has applied for a sports betting license in Ohio, which will allow online wagering starting on January 1, 2023. Fubo also has a partnership deal in place with the Cleveland Cavaliers for that market. 

Should California legalize online sports betting in November, Fubo would have market access in 10 states, the rest being Indiana, Louisiana, Mississippi, Missouri, Ohio, Pennsylvania, and Texas. The company's wagering platform sells itself as the first owned-and-operated live TV streaming-integrated mobile sportsbook in the US.

In February this year, Fubo Gaming secured market access for mobile sports betting through its Fubo Sportsbook in Mississippi, Louisiana and Missouri. The market access expansion results from the company’s existing partnership with Caesars Entertainment. 

As per the latest report, FuboTV posted a second-quarter loss of $116 million, but higher year-over-year revenue of $221.89 million, up from $130.8 million in Q2 of 2021.