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FOX Bet IPO in the Cards?

FOX Bet IPO in the Cards?
(Photo by John Nacion/NurPhoto)

Fox Bet, a joint venture between Flutter Entertainment and Fox Corp is said to be considering an initial public offering (IPO), according to industry research firm Eilers & Krejcik. Flutter, the world’s largest online gaming firm is currently working on growing two sports betting brands and looks as though they are attempting to spin Fox Bet so they can concentrate on their other which happens to be one of the two global DFS Kings.

Eilers & Krejcik’s biweekly newsletter has picked up the story, running with the by-line “Trending up: Rumors of a FOX Bet IPO, which would give parent company Flutter the opportunity to spin off its other US brand in a frothy market”. The timing seems right for Flutter to test the public market for their middle-of-the-road brand prior to possibly taking their big gun public in the future.

Fox Bet/Flutter relationship

Last year, Fox, in attempt to supercharge their Fox Bet brand in the increasingly competitive US legal sports betting market, purchased a 5% stake in The Stars Group for $236 million. Earlier this year, The Stars Group was purchased by Flutter for $12.2 billion – a move that made Flutter the largest online gaming firm on the planet.

Fox Bet, despite some serious upside doesn’t really look like the light of Flutter’s eye going forward. But making the most of their purchase of The Stars Group has them looking at all options with regard to the Fox Bet brand. Flutter does have options with Fox Bet.

Presently, Fox Bet is live in Colorado, New Jersey and Pennsylvania and they are currently the ninth-largest online sportsbook in the US with an estimated 2% market share. It remains to be seen if Flutter will want to take Fox Bet to the next level or if their IPO idea is simply a way of shifting their responsibilities over the company.

Timing is everything

Getting in while the getting is good” may just describe Flutter’s timing for going public with Fox Bet. Other gambling providers have started publicly trading recently with pretty good success. MGM, William Hill, one of the two biggest DFS providers in the world and Boyd Gaming are all examples of gambling companies that have hit the jackpot since going public, despite the COVID-19 impact around the world.

The legal sports betting gold rush in the US can’t be denied. Money is being thrown around like never before. Going public with Fox Bet could be seen as a way for Flutter to gain a little value from a company that was part of a much larger merger earlier this year and cement Flutter’s status as an unquestioned behemoth in the sports betting space.

Media/gambling angle

Fox Bet represents one of an increasingly popular lane for gambling companies have taken the last few months in particular – the marriage of media companies and sports betting providers. It seems like a logical fit for media to team up with betting providers in order to provide mutually beneficial content on a host of media outlets.

We are seeing it with recent PointsBet-NBC, Penn-Barstool, and theScore tie-ups that have the potential to elevate each’s brand and separate themselves in the increasingly crowded market. Fox Bet has a path toward success, although that path isn’t unique in today’s market.

It seems clear…

Flutter looks like it is hoping to focus on their larger, more successful sports betting brand and taking Fox Bet public looks like the avenue to do just that. Combining Fox Bet with their DFS monster is another option – one that doesn’t seem to be in the cards right now.

If Fox Bet does indeed go public, it should at very least help boost the assets of the company. What is a rumor right now could soon be a reality – precedence has already been set with regards to gambling companies going public and it appears that there is little downside.