Bulls and bears have plenty to say about fuboTV's (FUBO +0.00%) prospects as a play on sports gambling, but it's hoping to make its own luck with its second acquisition in the gambling market in as many months. The sports-first live-streaming provider announced on Tuesday that it will be acquiring Vigtory, a sports betting and interactive gaming company.
Terms of the deal weren't disclosed, but it expects the nuptials to close by the third quarter of this year. And fuboTV isn't wasting any time here: It expects to launch a sportsbook before the end of the year. Paired with last month's deal for Balto Sports, provider of the content automation software that will help fuboTV launch a free-to-play fantasy sports experience this summer, the intentions are pretty clear here. fuboTV hopes to stand out as the live-streaming platform that can get you into the game in more ways than one.
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Shooting the gap
In football, shooting the gap is when a defensive lineman tries to exploit holes in an offensive line to take down the competition. FuboTV is up against some pretty big competition in the live-streaming game. YouTube TV and Hulu + Live TV are industry leaders owned by Alphabet's (GOOGL +0.65%) (GOOG +0.85%) Google and Disney (DIS +2.17%), respectively.
Google and Disney are the equivalent of dominant 300-pound offensive linemen: They have a size advantage over fuboTV, with the connections to reach a wide audience and the financial resources to bankroll programming advantages.
But one thing they're not is nimble. Laser-focused on live TV, fuboTV can go places where they can't. It can also turn on the spigot of sports gambling without raising eyebrows the way that Google or Disney would if they decided to rip a page out of fuboTV's playbook.
This all matters, of course: fuboTV launched as a streaming platform emphasizing live sports with roughly 40 different channels dedicated to real-time sporting coverage. It has far more nonsports channels, too, but this is the differentiator for now. It also became the first platform to stream live sporting events in 4K when available.
It may not seem like much of a moat. YouTube TV, Hulu + Live TV, Sling TV, and others can huddle up with global sports channels and call the same play, and fuboTV naturally doesn't have exclusive rights on 4K high-def programming.
It's pretty tempting to follow in fuboTV's footsteps, too. Sports fans watch a lot of TV (fuboTV subscribers stream an average of four hours a day). These viewers are also richly valued by marketers. On top of monthly subscriptions that start at $65, fuboTV generates $7 a month in ad revenue per account.
No one is growing its share of new streaming-TV sign-ups at a headier pace than fuboTV since live sports returned in the U.S. this summer. It's just a matter of time before the competition makes a bigger push for this market, but this is also why the back-to-back months of fantasy sports and sportsbook acquisitions are so big for fuboTV.
Do you think Disney is going to hop onto the gambling bandwagon? You can't even gamble on its cruise ships! In Florida, it routinely lobbies against pro-casino legislation. Google already has enough to worry about with regulators trying to keep its reach in check. It's taken more than a year to try to get the world to sign off on a wearable-fitness acquisition! It's not opening a sportsbook anytime soon.
This is the hole between these two giant offensive lineman. This is where fuboTV can shoot the gap. This is where it cashes in on its core audience cemented for hours a day watching live sports. It starts with fantasy sports this summer -- it goes for the wallet-unfolding spike with real-money wagering a few months later.
fuboTV was already accelerating its growth without the gambling elements. It grew its pro forma revenue by an impressive 71% in the third quarter, and picked up the pace with 77% to 84% top-line growth for the quarter that ended last month.
It may be small, with just 545,000 paid subscribers heading into 2021, but it had momentum even before playing the gambling card that it knows most of its tech-titan and media-stock rivals can't play.
