fuboTV, Eyeing Sportsbook Launch, Acquires Vigtory

Posted on: January 12, 2021, 09:22h. 

Last updated on: January 12, 2021, 12:51h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Shares of online streaming service fuboTV (NYSE:FUBO) are soaring Tuesday after the company said it’s purchasing sports wagering firm Vigtory. The move is expected to aid the buyer’s effort to launch a web-based sportsbook at some point this year.

fuboTV
A shot of fuboTV’s streaming platform. The company is buying Vigtory to forge into sports betting. (Image: The Verge)

Terms of the deal weren’t disclosed. New York-based fuboTV, which positions itself as a sports-first streaming television platform, said the transaction is slated to close in the current quarter.

Founded in 2019, Chicago-based Vigtory rolled out its mobile sportsbook offering last fall, targeting big money bettors with lower juice or “vig.” For example, if a Vigtory competitor, say BetMGM or DraftKings, is offering -110 odds (bet $110 to win $100), the upstart bookmaker posts the same game at -105 or better.

Vigtory founder Sam Rattner and co-CEO Scott Butera, who joined the company last year following a stint at BetMGM, are joining fuboTV’s gaming division as chief operating officer and president.

Bigger Online, Streaming Push

Through a deal with Casino Queen, Vigtory has access to the fast-growing Iowa sports wagering market?and hopes to be live in as many as five states over the course of this year and into 2022.

The fuboTV/Vigtory deal is the latest partnership between a media entity and a sports wagering company. For the buyer, the acquisition is part of a broader push into online betting. Citing Zion Market Research, fuboTV says online wagering will be a $155 billion industry in 2024, and the company is looking to leverage its December purchase of Balto Sports to create a free gaming offering later this year.

The company plans to launch a free to play gaming app to all consumers. fuboTV plans to launch the standalone app and then integrated it into the fuboTV experience.?fuboTV plans to use both acquisitions to launch a sportsbook app, and eventually integrate the app into the company’s streaming service.

The streaming provider recently revealed a preliminary view on its fourth-quarter results, noting it expects to have 545,000 subscribers for 2020, good for 72 percent year-over-year growth.

Wild Ride for fuboTV Stock

News of the Vigtory transaction is helping fuboTV stock to a gain of 18 percent on volume that’s already nearly triple the daily average of this writing.

That comes after a wild December ride for the name. Last month, the shares more than doubled, only to give back all of those gains and then some by the time 2020 drew to a close. Analysts are mixed on the stock.

In a note out today, Wedbush analyst Michael Pachter calls fuboTV’s Vigtory buy “an interesting opportunity,” but points out it is “not a foregone conclusion that it will succeed in this endeavor.” He has an “outperform” rating and a $40 price target on the shares.

That’s a kinder assessment than what Kerrisdale Capital laid out last month. On Dec. 30, that research firm said fuboTV stock was trading at a valuation “completely unmoored from reality,” and that investors shouldn’t expect the name to morph into the next DraftKings or Netflix.