FuboTV has acquired US sportsbook firm Vigtory as the sports streaming service looks to build out its sports betting capabilities.
Following closing, Fubo said it expects to launch a sportsbook before the end of the year.
Financial terms of the were not disclosed.
What is FuboTV acquiring?
The deal covers Vigtory’s sportsbook platform and digital gaming assets, although Vigtory’s underlying sportsbook engine comes from Amelco.
Vigtory founder Sam Rattner and co-CEO Scott Butera will also join Fubo as part of the deal.
They will be COO and president, respectively, of Fubo’s gaming division. Vigtory previously planned to be a low-margin sportsbook, although its unclear whether Fubo will stick with that angle.
Fubo’s sports betting master plan
Along with the acquisition, Fubo laid out a plan to build out its sports betting capabilities.
- Initially it will launch a free-to-play prediction game in summer 2021, using the Balto Sports pool/bracket technology it acquired last year.
- That product will initially be a standalone app, then integrated into the core streaming product.
- Then the company will launch a betting app using Vigtory technology.
- That will then also be folded into the streaming product.
Fubo CEO David Gandler said sports betting was “highly complementary“ to the core Fubo business:
“We don’t see wagering as simply an add-on product to fuboTV,” Gandler said. “Instead, we believe there is a real flywheel opportunity with streaming video content and interactivity. Our free to play gaming experience, which will be available to all consumers, will build further scale to FuboTV, essentially acting as another lead generator for driving subscribers to our streaming video platform and, ultimately, our sportsbook.
“We not only expect sports wagering to become a new line of business and source of revenue, but we also expect that it will increase user engagement on fuboTV resulting in higher ad monetization, better subscriber retention and reduced subscriber acquisition costs.”
The company previously faced criticism for the margins on its subscriber-based business model. Operating margins in Q3 were -145.9% and gross margins were at -16%. The company sees betting as one way to solve those issues.
Tricky path ahead
Elsewhere, Gandler played down any concerns about the uneven history of media companies pivoting to sports betting. The CEO said the Vigtory acquisition would help solve two points that media companies usually face.
“First, Sam and Scott have years of experience navigating the complex gaming regulatory environment and, in fact, already have a first market access agreement completed. Second, fuboTV can leverage its own user behavior data to understand our consumers’ viewing preferences, and when and how to prompt them to consider placing bets.”
The first market access deal covers Iowa sports betting. Vigtory is in discussions for access in other Eastern states, Fubo said.
Fubo’s share price was up 13% following the news.