It seems the days of Fubo Sportsbook are coming to a close as the company shifts focus. FuboTV has announced they are ceasing the operation of its sports betting product going forward. This transition is in an effort to make the company profitable by 2025. According to the preliminary Q3 2022 results, continuing Fubo Sportsbook would be a challenge at this time.
Fubo Says Goodbye To Sports Betting
The entire Fubo Gaming subsidiary will cease operations. This includes the mobile betting app and the Fubo Sportsbook TV integration. The preliminary results did indicate a 34% year-over-year growth in terms of North American Revenue. The company saw approximately $210 million.
The revenue guidance for North America was set between $200 million and $205 million. This shows that Fubo TV did indeed exceed projections. Even as the revenue increases, the company remains in the red. The reason for ending Fubo Gaming operations is to increase cash flow into the company.
“Following our previously announced strategic review, we have concluded that continuing with Fubo Gaming and Fubo Sportsbook in this challenging macroeconomic environment would impact our ability to reach our longer term profitability goals, said David Gandler, co-founder and CEO, of FuboTV. “Therefore, we have made the difficult decision to exit the online sports wagering business effective immediately. We look forward to providing more color, as well as discussing our full third quarter 2022 results and full year outlook, on our November 4 earnings call.”
Fubo Sportsbook is live in three markets but does not dominate in any of them. Across Arizona, Iowa, and New Jersey, Fubo Sportsbook has not carved out a strong following.
Lack Of Success Led To Decision
In terms of paid subscribers, FuboTV North America is projected to surpass 1,220,000. This is a 27% increase year over year. The company in itself is growing despite being in the red. Projections anticipate a negative $100 million Adjusted Earnings Before Interest, Taxes, Depreciation, and Amortization (AEBITDA).
A large chunk of this negative is attributed to the sports betting product where the company has seen less success. In Arizona’s biggest sports betting month of March 2022, sportsbooks reported $690 million in betting handle. Of that total, only $879,565 was bet at Fubo Sportsbook. That’s less than 1% of the total market.
Fubo Sportsbook closing down operations based on these numbers alone makes perfect sense. The company simply is not viable in the competitive sports betting space.
How This Affects Markets
A major party that is affected by Fubo Sportsbook ceasing operations is the Ohio sports betting market. The Cleveland Cavaliers applied for a sports betting license in the Buckeye State with Fubo TV as its betting partner. The Cavs will now need to find another partner.
For markets that already host Fubo sportsbook, players will see their betting accounts unable to wager on the app. The shutdown is effective immediately so now is the time to cash out on betting wallets. It is unlikely that futures bets will be honored as Fubo has not stated its plans.