Fubo Hoping Early Moves Provide Later Payoffs As Launch Nears For Sportsbook Operations

Amid this year’s flurry of mergers and acquisitions both completed and talked about in the sports wagering space, FuboTV’s timing was somewhat ahead of the curve, considering it acquired Vigtory in January.

FuboTV, still known primarily as a live sports streaming platform instead of a sportsbook, has long pegged the fourth quarter of 2021 as a launch window for sports wagering, having gained market access in Indiana and three other states. It found an entry point into the Hoosier State in March via Caesars Entertainment, but its retail tether has not been announced.

There has never been a sense that Fubo is racing against a timeline to enter the sports betting world, an attitude reinforced by company President Scott Butera while speaking Tuesday at the Global Gaming Expo in Las Vegas. Integration has been integral, especially in Fubo’s case given the novelty of a sports streaming service offering sportsbook services, in contrast to sportsbook operators signing deals to acquire content to augment their offerings.

“It’s been about integration,” Butera said in remarks separate from those as a panelist concerning the convergence of sports betting and the media. “From day one, it’s always been integrating our teams. Our tech teams, all of our teams, our marketing teams. Really thinking about it as a single product … we want to be the first truly integrated product. Integrating the two functions, getting people to talk and understand how they need to work together to be great.”

Trying to stay ahead of the M&A curve

Integration has been a buzz word as the sports betting landscape shifts and evolves. Bally’s purchase of BetWorks and Caesars acquiring William Hill are two examples where vertical integration was a primary feature in making everything self-contained. It has also started the Darwinian process for survival among operators, as they try to claim market share in what will eventually be the largest sports wagering market in the world, with annual totals ranging from $40 billion to $80 billion.

“There isn’t a strong expectation there will be 10 apps on everyone’s phone,” explained Michael Kamras, managing director and U.S. head of Credit Suisse’s real estate, gaming, lodging & leisure group. “There’s going to be three or four or maybe five. There’s a limited bandwidth any one customer has in terms of their willingness to play on a lot of these sites.

“The real interesting opportunity is in-game betting, and that is much more rapid. We’re in a period of rather than take the time to build, people are buying in the vertical integration.”

Butera noted that in the case of Fubo’s acquisition of Vigtory, though both companies had different forms of technology, they were not merging legacy technologies in preparation for entering the challenging business of sports wagering.

“It was a young technology on the streaming side, a young technology on our gaming side, and we were able to [merge]  that,” he said, also pointing out that sports betting is still a relatively low-margin product. “We’re in a difficult business. The average sportsbook makes five cents of revenue for every dollar, and that goes down to one or two cents profit if you’re really good at what you do.

“And it’s a risky business, unlike a slot machines where you’re going to get eight or 10 percent.”

The waiting is sometimes the hardest part

While everyone knows FuboTV is launching its sports betting product in the fourth quarter, there is a natural impatience to get into the market given what appears to be non-stop expansion. In addition to Indiana, FuboTV will enter Iowa via the Casino Queen — the only venue of 19 in the Hawkeye State currently without a sports wagering component.

Butera acknowledged it is occasionally challenging, especially as different technology groups complete tasks that put them one step closer to completion and launch.

“With engineers, it’s tough, because engineers tend to be very much project-oriented and they want to see some immediate gratification,” he mused. “It is a challenge, but people recognize there’s an end game, and some people think the end game is a little sooner than other businesses.

“Getting a sportsbook to profitability, you’re talking two to three years, not 10-15, but we have a good solution for it,” Butera added.