FuboTV Inc. is shutting down its online sports betting business after a strategic review failed to turn up a strong enough solution, the company said on Monday.
New York-based Fubo announced preliminary results for the third quarter that included disclosures about its interactive wagering efforts, which had been under a strategic review since at least August.
Fubo anticipates its North American-based third-quarter revenue will be a better-than-expected $210 million, 34% higher compared to a year earlier.
However, the company still projects its adjusted earnings will be negative $100 million or so for the quarter and says that its results “demonstrate a continued progression” towards its target of achieving profitability in 2025. Fubo Sportsbook appears to be a casualty of that drive toward profitability.
“Given these goals, the company has now completed its previously announced strategic review of the Fubo Gaming business,” Fubo said in a press release. “While multiple parties expressed interest in the business, none of these opportunities would have allowed Fubo to lower its funding requirements and generate sufficient returns to shareholders. As a result, FuboTV will close its Fubo Gaming subsidiary and cease operation of its owned-and-operated Fubo Sportsbook effective immediately.”
Tough times all over
A spokesperson for Fubo said Monday evening that the company's online sportsbook had already stopped taking bets.
"We are working with necessary parties to make sure players and their existing accounts will be appropriately handled," said Jennifer Press, senior vice president of communications for the company, in an email to Covers.
The decision by Fubo to shutter its online sports betting business highlights the challenging nature of the industry in general, especially for a newcomer. Fubo Sportsbook was only live in three states — Arizona, Iowa, and New Jersey — but the company said back in August that its plans to offer both live video and online sports betting required a partner.
And Fubo's bread and butter remains live sports. The company says its "sports-first cable TV replacement product," FuboTV, has over 125 live sports, news, and entertainment networks and more than a million paying subscribers in North America.
Furthermore, Fubo’s sports-betting plans were not occurring in a vacuum. Economic conditions have gotten much bumpier this year, and consumers are being buffeted by higher prices and interest rates.
“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, in the release. “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.”