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Fox Bet Sportsbook Closing? Recent Arbitration Ruling Could Seal Company's Fate

Written by:
Aaron Goldstein
Published on:
Nov/12/2022

Fox Bet sports betting accounts could be shutting down in the coming months, maybe weeks, in the wake of a recent arbitration ruling by New York’s Judicial Arbitration and Mediation Services (JAMS) in Fox. Corp.’s (NASDAQ:FOXA) rift with FanDuel parent Flutter Entertainment (OTC:PDYPY).

The site has not exactly caught on, even in light of its heavy promotion during the Fox NFL Pregame Show.

While unavaliable in most U.S. states, those who had accounts will have no shortage of other online sportsbooks in which to choose from (Americas Bookie is available in all states as an example).

"Fox Bet is on borrowed time,” according to the research firm Eilers & Krejcik Gaming. “Both Fox and Flutter can terminate the Fox Bet agreement in August 2023 and essentially dissolve the business.”

Gambling911.com has no reason to believe the brand will be eliminated at this time, and likely not while the NFL season is still in full gear.  It is after all Fox.

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Following the arbitration ruling, Fox is set to acquire 18.6% of FanDuel at a valuation of $22.4 billion.  Fox would pay $3.7 billion for its right to that stake amount.

While it is sometimes difficult to keep pace with the fast moving U.S. regulated sports betting market, this is how it all went down.

Back in 2019, Fox partnered with The Stars Group, parent company of PokerStars, to develop a sportsbook aptly named Fox Bet via a licensing agreement. 

Soon thereafter, FanDuel's parent company, Flutter Entertainment, purchased the Stars Group.   This resulted in a dispute over how much Fox would pay for  stake in the FanDuel app.

The arbitrator ruled Fox's options would be based on the fair market value of FanDuel in December 2020, or $20 billion, a decision Flutter heralded as a win.

“Today’s ruling vindicates the confidence we had in our position on this matter and provides certainty on what it would cost Fox to buy into this business, should they wish to do so," Flutter Chief Executive Peter Jackson said in a statement issued last week.

Fox expressed satisfaction with the ruling, claiming it was a "meaningful equity stake in the market leading U.S. online sports betting operation."

The Fox organization is one of a number of media firms betting on the sports gambling sector.  Disney is contemplating entry.

Fox Chief Executive Lachlan Murdoch described sports betting as "a huge opportunity" for Fox Sports as recently as August.

The demise of this brand won't be too obvious, despite its heavy promotion Sunday mornings.  The app is only available in four states and  accounts for just  just 0.2% share of the U.S. market, according to researcher Vixio.

- Aaron Goldstein Gambling911.com

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