Last Updated on June 2, 2020
Sports betting companies are betting big on a post-coronavirus boom for the industry. FanDuel and Fox Bet, which are both owned by parent company Flutter, are looking to expand in the US market despite live sports remaining shut down. The group is raising nearly $1 billion with hopes of making major inroads in the US market.
“FOX is bullish about the opportunities in the digital sports wagering market,” CEO of Fox Corporation Lachlan Murdoch said in a statement. “FOX Bet has shown strong growth since launching last fall, and we look forward to continuing that success with our partner, Flutter. FOX’s investment in Flutter underscores our confidence in Flutter’s business and its management’s ability to continue to drive leadership in the U.S. market.”
Reasons For Expansion
In the statement, Flutter lists four reasons for making this move at this moment in time:
- Accelerate US strategy
- Increase investment to enhance competitive positioning
- Earlier finance cost savings
- Bolster the Group in a more uncertain environment
When Flutter refers to “accelerating U.S. strategy,” the goal is to position the company to move into new markets. The coronavirus pandemic is putting a major financial strain on states and legalizing sports betting — including mobile sports betting — is one creative way for states to add tax revenue for 2021. Among the various states pushing for sports betting, California is tweaking legislation and New York is pushing for mobile sports betting.
In terms of increasing investment, Flutter is experiencing an uptick in mobile betting and more specifically, online casinos and online poker. The company wants to prepare itself to take advantage of this boom. Earlier finance cost savings simply means the group is deleveraging its balance sheet.
The last reason Flutter gives for expansion is to “bolster” the company during these uncertain times. The lack of sports has certainly taken a toll on sports betting companies and it’s unclear exactly what will happen when live sports return. Flutter is looking to cover all its bases so that when demand goes back up it is capable of handling whatever comes its way.