February 6, 2021
If sports gambling has a national holiday, it’s the annual Super Bowl. Americans are expected to will legally bet more than $500 million on Sunday’s Super Bowl LV between the Tampa Bay Buccaneers and Kansas City Chiefs nationwide, up 67% from the estimated $300 million wagered in 2020, according to PlayUSA. Overall, the American Gaming Association estimates Americans bet $6.8 billion on last year’s Super Bowl.
Upstart sports-themed online TV service FuboTV is eyeing sports gambling as a point of differentiation from online TV heavyweights Hulu with Live TV, YouTube TV, AT&T TV and Sling TV. The New York-based service plans to launch an interactive sports gambling book later this year — a move Disney’s sports-themed SVOD ESPN+ is considering as well.
FuboTV, which launched an IPO in 2020, entered 2021 with about 545,000 subscribers paying from $65 monthly for access to more than 100 channels, including 40 sports-themed. The 6-year-old service last year acquired Balto Sports, a backend developer of fantasy sports gaming software. Last month, FuboTV expanded to live sports by acquiring Vigtory, an interactive sports gaming company.
“FuboTV can go places where [Disney and Google-owned YouTube TV] can’t,” The Motley Fool’s Rick Munarriz wrote last month. “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.”
Michael Pachter, media analyst with Wedbush Securities in Los Angles, remains bullish on fuboTV, upping his share price target to $50 from $40. The analyst contends the service’s live sports content is a win for consumers and investors.
“FuboTV is a real company,” Pachter told CNBC. “There’s a lot of pessimism that they can’t stand out [among online TV players]. In fact, they have more sports programming than anybody. And what makes that a huge advantage is that [pay-TV] cord cutters are looking for live sports content.”
Pachter said FuboTV continues to draw advertising revenue streaming Italian, Spanish and British professional soccer in the U.S.
“Their ad ARPU (average ad revenue per user) goes from $6 to $12; the company is talking $20,” the analyst said. “That will get them to profitability in a couple of years.”