FuboTV doubled down on sports betting this week, saying it could be taking bets in three states by the end of the year.
The sports streaming service announced Wednesday it secured market access for New Jersey and Indiana via Caesars. It already had access in Iowa via Casino Queen.
The company said it aimed to launch in the three states by Q4.
“We could not be more excited to bring fubo Sportsbook to market in the fourth quarter, and today’s market access licenses for Indiana and New Jersey will help us reach even more consumers at launch,” said Fubo CEO David Gandler.
Official data for fubo Sportsbook
As part of those betting plans, Fubo has become an authorized gaming operator of Major League Baseball (MLB) and the National Basketball Association (NBA.)
That includes access to official league data and and logos within fubo Sportsbook once it is rolled out.
Notably, the company said it planned to integrate fubo Sportsbook into its live streaming platform for a “seamless viewing and wagering experience.”
Is Fubo’s plan realistic?
However, gaming industry veterans voiced some concerns over those plans, starting the integrated streaming/betting app.
For one, any product that offers wagering is immediately subject to gaming regulations. That means a much more stringent sign-up process for new customers, including submitting social security details. It’s far from ideal for a streaming/media product.
That’s why a company like theScore has a separate betting app rather than an integrated one.
“Their vision is not possible,” said sports betting consultant and former FanDuel exec David VanEgmond. “They’d need to have a different signup flow to account for KYC and AML. And they won’t want to do for the FuboTV subscription product. So you’ll have to go through another signup for betting. That will be a huge friction point and barrier to conversion.”
Fubo declined to comment when asked about this potential issue. However, CEO David Gandler said during this week’s earnings call: “Based some of the commentary that we’ve received from regulators, we feel really good about the space.”
It’s also worth noting Fubo offers streaming via reseller agreements with US sports broadcasters. But the rights to show sports on a gaming platform are often sold separately because they need to be faster. That means Fubo would have to pay for a new set of rights.
How deep are your pockets?
Finally, the company is already strapped for cash in a sector that requires deep pockets.
Fubo’s adjusted EBITDA was a loss of $43.5 million in Q4.
“I’m predicting this will not go well for FuboTV,” VanEgmond added. “The business requires exponentially more capital to scale than they anticipate. FanDuel and DraftKings acquired more players in the last several months than FuboTV has active subscribers. They just can’t compete.”
