FuboTV shares are on the rise again after the aspiring company announced it was taking over sports betting startup Vigtory and will be launching a full-fledged sportsbook with it later this year.
The terms of the transaction, which is expected to close in the first quarter, were not disclosed. Fubo, which was founded in 2015 as an internet-based pay TV operator similar to YouTube TV, is thus positioning itself more as a hybrid company. While the acquisition is much smaller than DraftKings and FanDuel in sports betting and Hulu + Live TV, YouTube and Sling TV in vMVPD, it is driving a strategy to blend the two companies.
Fubo’s shares, which have been on a roller coaster ride for the past few weeks, rose 14% to around $ 31 in mid-day trading. They have tripled since going public last fall and sparked a valuation debate among investors.
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David Gandler, Co-Founder and CEO, speaking at Needham & Co. said that the acquisition of Vigtory will create multiple lines of revenue, making FuboTV less prone to cable cutting. Formerly known as “Skinny Bundles,” Internet-delivered TV packages have seen mixed results, with AT&T and Sony dropping offers and significantly increasing prices for YouTube and Hulu gamers.
“The sports betting side allows us to enlarge the funnel,” said Gandler, referring to the opportunity to attract new customers. “We will target customers with our free app, which will put more people in the funnel who are interested in sports. … We believe this will increase engagement and retention which we believe will increase monetization. “
The free app is based on animation software from Balto Sports that Fubo acquired in December. Over time, the vision of assembling sports betting is to enable on-screen betting so viewers can bet while watching games. There are many technological and regulatory hurdles to overcome, and in a market estimated to be worth more than $ 150 billion by 2024, a variety of other companies are pursuing similar goals. In Gandler’s view, “it’s not a zero-sum game,” which means that Fubo could coexist with many other rivals.
Fubo initially started as a football-oriented TV package before it was expanded into a so-called “sport-first” orientation. However, some skeptics have noticed some loopholes in their sports offerings – they split from WarnerMedia networks, meaning there are no NBA games on TNT or NCAA basketball on TBS. It also does not currently broadcast Ballys regional sports networks operated by a consortium led by the Sinclair Broadcast Group.
Vigtory was founded in 2019 by Sam Rattner and supported by SeventySix Capital. Rattner previously founded Engine Sports, a backtesting engine that enables retail sports bettors to develop algorithmic betting strategies in one interactive experience.
Scott Butera, President Interactive Gaming at MGM Resorts International and instrumental in launching BetMGM, joined Vigtory in 2020 as Co-CEO. Prior to MGM, Butera was the commissioner of the Arena Football League and held management positions at numerous casinos and gaming concerns.
It is planned that Butera and Rattner will join the gaming department of FuboTV as President and COO respectively.