Fubo pins long-term strategy on sportsbook success

Fubo TV founder and CEO David Gandler has suggested that the development of the Fubo Sportsbook is one of the key pillars on which the firm’s future success, or failure, could hinge.

As part of the streaming provider’s Q1, 2022 results call, Gandler isolated sportsbook among five key areas, namely efficient growth, advertising, technology and content costs, as being firmly set within Fubo’s long-term strategy.

“We believe our focus on these initiatives strike an appropriate balance of building growth while driving the operating leverage inherent in our model,” Gandler told investors.

“Wagering remains a key pillar of our strategy to integrate interactivity into our live TV streaming experience. We believe our differentiated approach of bringing to market our proprietary Fubo Sportsbook, which integrates live sports streaming and wagering into a single ecosystem will disrupt both video and gaming,” he added.

Addressing potential future rollouts, Gandler suggested it would be on a phased basis rather than an all-out assault.

“Mindful of the increasing cost of capital, we’ve taken a measured approach to our rollout of our Fubo Sportsbook. However, we do not see this is a long-term challenge,” Gandler said.

“Our sportsbook is both a differentiated product feature within our streaming business, as well as a stand-alone service. Unlike other books in the market, we have the advantage of leaning in on our growing customer database to scale, therefore significantly decreasing our marketing cost to acquire players, which we expect will shorten our path to profitability.”

In February, Fubo secured a triple-state market-access deal with Caesars Entertainment in states including Mississippi, Louisiana, and Missouri. This was in addition to a previous deal with Caesars that saw Fubo gain access to Indiana and New Jersey. Fubo is also live with its sportsbook in Iowa and Arizona.

Referencing progress made in those two markets, the Fubo TV CEO continued: “When we came into this, we had a thesis, and I think what we’ve learned in the first two state launches is that people who are watching TV spend more time gambling. They place more bets, and they spend more money and so what we’ve been doing most recently is managing our marketing effectiveness and our promotions.

“As we sort of get a better sense of how we’d like to roll that out, we’ll continue to look to migrate our subscribers over to the book. But so far, we’re very happy about what we’ve seen, and we’re looking forward to doing more.

“We’ll probably launch a couple of more states before the end of the year. Long term, the goal from an ARPU [average revenue per user] expansion perspective is probably low to mid-single digits from a dollar perspective, and we will probably start to see some revenue coming in 2023,” he added.