FuboTV said it is entering the online sports wagering game via the acquisition of Balto Sports, a fantasy sports tech company spawned from the Y Combinator startup incubator program.
FuboTV, billed as a "sports-first" live TV streaming service, said it will tie together Balto Sports' automation software and tools with its own proprietary technologies to launch a free-to-play gaming offering. Per Balto Sports' company description, its tools reduce the time and manual labor needed to manage and track online fantasy sports contests, such as tournament brackets, survivor pools and pick'em games, involving thousands of players.
FuboTV did not reveal the financial terms of the acquisition or say when it expects to launch its new online sports wagering capability. However, fuboTV expects its free-to-play offering to "layer on real money wagering in regulated markets," company co-founder and CEO David Gandler said in the release.
The deal comes less than a month after FuboTV announced its intentions to enter an online sports wagering market made popular by services such as Draft Kings and FanDuel.
FuboTV, which ended Q3 2020 with 455,000 subscribers and expects to end 2020 with at least 500,000, reasoned that such an offering would complement its focus on live sports and help it drive higher subscriber engagement, improve service retention and open up additional revenue streams.
"We believe there are significant synergies between consumers who enjoy wagering and our subscribers who enjoy streaming live sports, creating a flywheel opportunity," Gandler said. "We will be strategic in our approach to wagering as we consider and evaluate different opportunities and will adjust our plans accordingly."
Adding online sports wagering could help FuboTV establish some product differentiation and separation in a crowded market of virtual multichannel video programming distributors (vMVPDs) that also include YouTube TV, Hulu, Philo, AT&T TV Now, Vidgo, Dish-owned Sling TV and TVision, T-Mobile's recently launched OTT-TV service.
US-based vMVPDs combined to add 1.48 million subscribers in Q3 2020, enough to result in a small, overall gain of 31,000 subs when held against a loss of 1.45 million subs among traditional pay-TV providers, according to MoffettNathanson's latest analysis of the US pay-TV sector.
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— Jeff Baumgartner, Senior Editor, Light Reading