fuboTV (NYSE:FUBO) is getting ready to launch its mobile sportsbook later this year, and it could be a formidable contender in the space. The company is a sports-centric streaming service, which attracts sports fans as customers.
Therefore, offering the subscriber base a sports betting service is a nice complement. That's one of three reasons fuboTV could find success in the sports betting market. Let's take a closer look.
1. A growing base of sports fan subscribers
fuboTV is rapidly growing subscribers to its streaming service. The company boasts 682,000 paying viewers, an increase of 138% from the same quarter last year. Management expects that figure to grow to 915,000 by the end of its fourth quarter. Remember, the company offers a sports-centric streaming service, so a good part of these subscribers are fans who sign up to watch sports.
Importantly, fuboTV needs to get approval from each state it wants to offer sports betting services in. Here's what management had to say on getting these approvals: "Our goal in terms of market access is to be able to provide access to our subscriber base by the end of 2023 of up to 50% of our total sub-base. So you can imagine at 915,000, which is our guidance for the end of this year, that becomes a pretty sizable cohort."
More specifically, fuboTV expects to launch its mobile sportsbook in at least three states by the end of 2021.
2. Management is making this initiative a priority
The company believes offering a mobile sportsbook is fundamental to its success. This quote from the company's quarterly financial statement offers insight:
We believe our expected expansion into wagering and interactivity is core to this model. We believe free-to-play predictive games enhance the sports streaming experience-while also providing a bridge between video and our contemplated sportsbook. We expect the integration of gaming with our expansive live sports coverage will create a flywheel that lifts engagement and retention, expands advertising revenue through increased viewership, and creates additional opportunities for Attachment sales.
With that kind of public statement, it does not appear that the company's entry into the mobile sportsbook market is something it's doing half-heartedly. Management is sending a signal to the market that it believes offering a mobile sportsbook to be important to the company's success, an indication it will back it up with an investment of focus and resources.
3. Platform will highlight the integration of services
fuboTV said that its sportsbook would feature an industry-first live sync integration between video and its sportsbook. In other words, while watching their favorite sporting event, fans will get an overlay on the screen that might show some betting odds for the game that's about to start. Or they may be presented with an opportunity to bet on who they think will win the next quarter, make the next bucket, or score the next touchdown.
Depending on how responsive the feature ends up being, it can be more convenient than taking out your phone, opening an app, scrolling to find the wager you are looking for, then finally making a bet. That can make the difference between a viewer deciding to make a bet or not. One-click versus several can change plenty of decisions for a user; just ask Amazon.
Overall, these aspects do not guarantee the company will succeed in the sportsbook market. They are only indications of probability. Management's own forecast estimates fuboTV can capture 3% to 6% of the total gaming market in the long run, which would certainly please shareholders.