Shares of online streaming service fuboTV (NYSE:FUBO) are soaring Tuesday after the company said its purchasing sports wagering firm Vigtory, a move that’s expected to aid the buyer’s effort to launch a web-based sportsbook at some point this year.
Terms of the deal weren’t disclosed. New York-based fuboTV, which positions itself as a sports-first streaming television platform, said the transaction is slated to close in the current quarter.
Founded in 2019, Chicago-based Vigtory rolled out its mobile sportsbook offering last fall, targeting big money bettors with lower juice or “vig.” For example, if a Vigtory competitor, say BetMGM or DraftKings, is offering -110 odds (bet $110 to win $100), the upstart bookmaker posts the same game at -105 or better.
Vigtory founder Sam Rattner and co-CEO Scott Butera, who joined the company last year following a stint at BetMGM, are joining fuboTV’s gaming division as chief operating officer and president.
Bigger Online, Streaming Push
Through a deal with Casino Queen, Vigtory has access to the fast-growing Iowa sports wagering market and hopes to be live in as many as five states over the course of this year and into 2022.
The fuboTV/Vigtory deal is the latest partnership between a media entity and a sports wagering company. For the buyer, the acquisition is part of a broader push into online betting. Citing, Zion Market Research, fuboTV says online wagering will be a $155 billion industry in 2024 and the company is looking to leverage its December purchase of Balto Sports to create a free gaming offering later this year.
Free to play gaming, which will be available to all consumers whether or not they are fuboTV subscribers, will first launch in a standalone app and later be integrated directly into the fuboTV user experience,” according to a statement.
fuboTV plans to use both acquisitions to launch a sportsbook app and eventually integrate the app into the company’s streaming service.
The streaming provider recently revealed a preliminary view on its fourth-quarter results, noting it expects to have 545,000 subscribers for 2020, good for 72 percent year-over-year growth.
Wild Ride for fuboTV Stock
News of the Vigtory transaction is helping fuboTV stock to gain of 18 percent on volume that’s already nearly triple the daily average of this writing.
That comes after a wild December ride for the name. Last month, the shares more than doubled only to give back all of those gains and then some by the time 2020 drew to a close. Analysts are mixed on the stock.
In a note out today, Wedbush analyst Michael Pachter calls fuboTV’s Vigtory buy “an interesting opportunity,” but points out it is “not a forgone conclusion that it will succeed in this endeavor.” He has an “outperform” rating and a $40 price target on the shares.
That’s a kinder assessment than what Kerrisdale Capital laid last month. On Dec. 30, that research firm said fuboTV stock was trading at a valuation “completely unmoored from reality” and that investors shouldn’t expect the name to morph into the next DraftKings or Netflix.
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