Prize mingguan Pengeluaran SGP 2020 – 2021. Jackpot besar yang lain-lain tampil dilihat dengan terpola melalui info yg kita umumkan dalam laman tersebut, dan juga siap dichat kepada petugas LiveChat support kami yang menjaga 24 jam On-line untuk melayani segala maksud para visitor. Mari segera join, dan ambil prize Lotto dan Kasino On-line terbaik yang tampil di website kami.
Flutter’s acquisition of The Stars Group last year created the world’s largest online gambling company. The combined company’s value has increased nearly 50% since then, so clearly there has been a lot of upside. It’s not all butterflies and rainbows, however, and Flutter has taken on a number of ongoing problems along with TSG’s assets.
The massive judgment reinstated against PokerStars by the Kentucky Supreme Court is the one that gets the most attention. However, Flutter has also taken on what seems to be an unwelcome roommate in Fox Sports. It’s through a partnership with that company that TSG formed Fox Bet, its new sports betting brand for the US market.
That partnership has now led to a contractual battle. Flutter plans to sell part of its stake in FanDuel Group by way of an IPO, but had extended to Fox, as part of the TSG acquisition, the option to buy an 18.6% share of the group. Fox’s understanding of the deal is that it can buy those shares from Flutter for the same price the latter originally paid. Flutter feels that Fox should pay a fair market value.
Neither is budging, so the issue is heading to arbitration. In the meantime, Fox has threatened to pulled FanDuel ads from its airwaves. Flutter has downplayed the importance of Fox as a partner, and moved former TSG assets including Fox Bet and PokerStars out of FanDuel Group so that they will not be part of the IPO.
The problems with Fox Bet are deeper than one dispute, however. As a brand, it has been underperforming. Flutter plans to migrate it to its Paddy Power Betfair technology platform to improve the product. Other issues may be harder to resolve.
Flutter’s goals aren’t the same as TSG’s were
For starters, it’s probably safe to say that the Fox Bet deal never would have taken place at all if TSG hadn’t been independent at the time.
PokerStars is the undisputed global leader in online poker, but it’s weak in other verticals. Poker is never as big a money-maker as sports betting or casino products, but PokerStars makes up for that by holding the lion’s share of most legal markets.
The piecemeal approach of gambling expansion in the US is unfavorable to poker, however. For the US to become more than a drop in the bucket of TSG’s global revenue, the company needed to leverage its popular poker brand into success in the other verticals. It’s had middling success with its casino, but its international sportsbook, BetStars, has never found much traction.
Partnering with a nationally popular media company to launch a new sports betting brand seemed like a wise move at the time. It might have paid off eventually if TSG had remained independent.
It’s far less clear what value Fox Bet has to Flutter, given FanDuel’s dominant position in the market. The latter brand accounts for 91.6% of the parent company’s US revenue, while TSG’s brands, including Fox Bet, make up the other 8.4%.
This has led to speculation that Flutter would ultimately like to disentangle itself from Fox entirely, and phase out the Fox Bet brand.
Free advertising isn’t enough
Another aspect of the deal that has faded in relevance is advertising on Fox’s broadcasts.
Despite being a bit old-fashioned compared to the product, television advertising has been important for US sportsbooks. TSG didn’t know up front how successful it would be in the sports betting vertical, however, and so investing in TV ads could have produced a negative return. Forming a joint venture with Fox meant that the latter would promote the new brand in return for a share of revenue, so TSG was able to offload that risk.
Flutter, on the other hand, has been happy to shovel money into advertising on behalf of FanDuel. It doesn’t have the same risk aversion in the sports vertical that TSG does. There’s therefore comparatively little advantage to it in having this joint venture in place, rather than a more traditional B2B relationship.
Flutter CFO Jonathan Hill addressed this side of things in the company’s Q1 earnings call last month:
Fox is not a huge component of marketing spend for FanDuel. FanDuel was successful before the merger when Fox became a partner. While we are highly supportive of Fox, FanDuel is not overly reliant on that channel for marketing.
There is one thing Fox Bet does have that Flutter doesn’t: Its free-to-play product Fox Super 6 is the market leader in that category, and a powerful customer acquisition tool. However, that alone may not be enough to keep Flutter interested in maintaining what is clearly a souring relationship.
Even TSG may not have done enough for Fox Bet
The mismatch between Fox Bet and Flutter’s overall business is a new problem. Yet the sportsbook’s performance was lackluster to begin with. With $100 million in revenue, it’s far from the bottom of the heap, and smaller operators like PointsBet or TwinSpires would give a lot to be in that position. However, given the status of PokerStars and Fox Sports in their respective areas of business, one might have expected more from the collaboration.
Lack of management experience at TSG may have been part of the problem. When Amaya – as TSG was known at the time – took over the company, all the company’s former top brass had to go. The whole point of the reverse takeover was to separate the PokerStars brand from its past black market activities in the US, so as to be able to re-enter the market legally. That meant that no one involved in those activities could stick around.
Prior to that, Amaya was just a small time manufacturer of slots and other casino products. Its executives had no experience running anything on the scale of PokerStars, nor even with poker per se. Although they managed to avoid running the company into the ground, there was a fair bit of criticism directed at the company’s leadership in those years. It’s probably one reason that none of the company’s executives received top positions at Flutter, and many have left to join Hard Rock’s new online division.
Treating sports betting as an afterthought is a mistake
TSG may also have been caught looking past the sportsbook, towards its ultimate goal of casino profits. When it acquired the British company Sky Betting and Gaming, well before the Fox Bet deal, it was already telling investors that it saw poker and sports as part of a funnel to acquire users for its casino. After all, that’s where the real money is.
However, in the US, we’ve seen that companies that focus on casino first and attempt to pivot to sports don’t do very well. Caesars has been a bit player so far, but that may change now that it has absorbed William Hill. Golden Nugget is a top casino brand in its home state of New Jersey, but is a second-string operator in Michigan. BetMGM seems like an exception, until you consider that MGM Resorts is only half of the venture. The other half belongs to Entain, which has tremendous sports betting experience in Europe.
Given that trend, TSG would probably have had to focus predominantly on the sportsbook first, in order to become equally successful in all verticals in the US. Even if the long game is all about casino, it doesn’t seem as if putting the cart before the horse is something US operators can get away with, and TSG may have been guilty of that.
Fox attempts to make itself indispensible
Even as Fox pursues legal action against Flutter to obtain its shares of FanDuel at the price it wants, it’s clear that it hopes to salvage the relationship. Flutter believes it has far less to lose than Fox does if the partnership falls apart, and is probably correct in that belief. However, Fox is doing what it can to change that dynamic.
Its threats to pull FanDuel ads from its airwaves don’t seem to have scared Flutter, so Fox is upping the ante.
It’s now looking to acquire the dedicated sports betting media outlet Outkick. Ostensibly, this is to drive Outkick’s audience over to Fox Bet.
While the acquisition would certainly serve that end, there’s probably an ulterior motive as well. In announcing its plans, Fox mentioned that Outkick has an exclusive marketing relationship with FanDuel, and described it as “an attractive source of wagering leads” for the latter.
In other words, it may be that Fox is hoping the purchase will give it additional leverage in the relationship. Exactly how well that works remains to be seen. It does make one thing clear, however: Whatever the outcome of the current arbitration between the companies, it’s unlikely that the FanDuel IPO will be the end of the drama in this tempestuous relationship.