The fast-growing, sports-first streaming service fuboTV (FUBO -0.75%) has been growing in popularity with both consumers and investors over the last year as it innovates and executes. But this streaming-TV service may be just getting started. The company's subsidiary, Fubo Gaming, has been busy securing market access agreements to launch a new sports-betting app, positioning the company to take market share in the fast-growing digital sports gambling market. Its latest approval is in Iowa.

Here's what investors should know about fuboTV's ambitious new business -- and how it could help the growth stock.

A person betting on a sports game from home.

Image source: Getty Images.

These are the "early innings"

"We believe we are in the early innings of a massive opportunity," said fuboTV co-founder and CEO David Gandler in the company's second-quarter earnings call when discussing its Sportsbook plans.

Differentiating the app, it will have a "Watching Now" feature that uses data from its streaming service to sync the wagering app with what a user is watching on fuboTV. "Leveraging fuboTV's first-party user behavior data to understand consumers' viewing preferences and recommend relevant bets, the company intends to turn passive viewers into active, engaged participants," the company said in a press release about Fubo Sportsbook. This marks "an industry-first integration," according to fuboTV.

In addition to securing a market access agreement in Iowa, it has obtained agreements in Arizona, Pennsylvania, Indiana, and New Jersey. The company confirmed this week that it is on track to launch in Q4.

As fuboTV prepares for an official launch of Fubo Sportsbook in Q4, the company has already rolled out free-to-play games, which management says are helping educate and train its users for real-money betting. "Free gaming serves to educate and train our customers, which we believe will ultimately reduce the learning curve and drive greater levels of adoption of our Sportsbook," said Gandler during the company's most recent earnings call.

Building on fuboTV's impressive momentum in streaming

Fubo Sportsbook will add fuel to an already powerful fire. The company's business has seen extraordinary momentum recently. fuboTV paid subscribers increased 138% year over year to about 682,000 in Q2. This led to nearly 200% revenue growth and a 281% year-over-year increase in advertising revenue. Importantly, engagement also hit new highs as streaming hours on its platform during the quarter rose 148% year over year to 245 million.

Management has high hopes for Fubo Gaming, betting that it will help improve paid customer retention, engagement, and advertising revenue, and ultimately strengthen the company's unit economics over the long haul.