Streaming television company Fubo TV says it will no longer develop its sports betting business and will end betting-related services in a handful of states where it was offered.
The announcement was made on Monday in a filing with the Securities and Exchange Commission (SEC), in which Fubo TV said its board had approved the dissolution of its sports betting subsidiary Fubo Gaming. The move comes two months after Fubo TV said it was placing the sports betting part of its business under strategic review.
Fubo TV said the end of its sports betting business will cost approximately $70 million and lead to some employee layoffs. Some workers who were assigned to that part of the business are expected to receive severance packages, the company said. It was not clear how many workers were affected by the move.
In a statement, Fubo TV chief executive David Gandler said the sports-betting side of Fubo TV no longer fit in with the company’s long-term growth goals.
“Following our previously announced strategic review, we have concluded that continuing with Fubo Gaming and Fubo Sportsbook in this challenging macroeconomic environment would impact our ability to reach our longer term profitability goals,” Gandler said. “Therefore, we have made the difficult decision to exit the online sports wagering business effective immediately.”
Gandler said more information about the company’s decision will be released in a conference call with investors and reporters early next month.
On Monday, Fubo TV released a preliminary quarterly earnings report in which the company affirmed it expects to lose approximately $100 million. The company has not posted a profit since it launched in early 2015; instead, executives say Fubo TV is on track to be profitable by 2025.
What Fubo TV lacks in profit is made up for in part by subscriber growth: In August, Fubo TV said it had more than 947,000 subscribers who were shelling out $70 or more per month to access dozens of Internet-streamed live cable channels, including ESPN, Fox Sports, BeIN Sports and CBS Sports networks. That number is expected to climb to over 1.2 million, executives said on Monday, eclipsing a previous target set for subscriber growth.
“We expect to deliver strong revenue and subscriber growth in Q3, exceeding our previously issued guidance in North America, against the backdrop of a highly competitive operating environment,” Gandler pledged. “We’re pleased with this expected performance, and our progress toward achieving our positive cash flow target in 2025 .”
The decision to abandon its sports wagering business marked a sudden about-turn for a streaming service that largely hung its hat on the product. Less than two weeks after Fubo TV announced that part of the business was under strategic review, executives held an Investor Day conference where they touted future innovations and strategies that revolved around sports betting.
At the conference, executives teased several forthcoming features that they hoped to integrate with their sports-betting service, including live wagering based on real-time circumstances that occur within a game, such as whether a football team would make a field goal after a touchdown. Rather than have a separate app, Fubo TV said it wanted the sports book to be fully integrated with the Fubo TV app, so viewers could place bets and watch a game from a single screen.
In the interim, Fubo TV offered sports wagering through an app that was complementary, but otherwise separate, from the live television service. The Fubo Gaming app was available in a handful of states, including New Jersey, Arizona and Iowa.