Michigan Down to 14 Online Sportsbooks After Flutter Announces Shutdown of FOX Bet

FOX Bet will be ceasing operations in Michigan and in all other states where it previously operated. Its owners, Flutter Entertainment and Fox Corporation made this known in a public statement issued in the final week of July 2023.

For a short while now, rumors had been flying around that stakeholders proposed shutting down the sportsbook’s operations. This comes after a string of losses and several accusations that Flutter paid little attention to the growth of the sports betting brand.

The closure of FOX Bet now brings the total number of online sportsbooks in the Wolverine State to 14.

FOX Bet went live in the US in 2019 and was previously controlled by The Stars Group. Flutter Entertainment acquired The Stars Group in 2020 and began to oversee the operations of FOX Bet, alongside Fox Corp, which also had controlling shares.

However, since the acquisition, the sportsbook has reported losses of up to $60 million yearly. In the first half of 2023, FOX Bet also accounted for 20% of Flutter’s loss on earnings before interest, taxes, depreciation and amortization (EBITDA).

In addition, Fox Corporation had previously alleged that Flutter neglected the operations of FOX Bet, rather focusing on PokerStars and FanDuel. These two sports betting brands are controlled by Flutter Entertainment and were acquired from The Stars Group deal. The rift between these two owners also quickened the shutdown of FOX Bet’s operations.

A joint statement released to the press revealed that FOX Bet would officially stop taking bets on July 31 but there would be a gradual closure of its services till August 31.

“Flutter Entertainment and Fox Corp. announce today the decision to close sports betting platform FOX Bet. A phased closure of FOX Bet’s operations will take place between 31 July and 31 August 2023,” the statement read.

FOX Bet generated about $86 million in lifetime online sports betting handle in Michigan alone. As at the first half of the year, it had pulled in $10.7 million worth of wagers. Its lifetime handle places it in ninth place of the total 15 mobile sportsbook operators in the state. Unfortunately, revenue from Michigan was not enough to sway stakeholders into continuing operations.

According to the terms of several deals that existed between Flutter and Fox Corp., the latter company will retain ownership of the FOX Bet brand. The public statement announcing the end to FOX Bet’s operations read thus:

“FOX will retain future use of the FOX and FOX Bet brands, including FOX Bet Super 6, and intends to launch an all-new FOX Super 6 game later this summer.”

In addition, Fox will enjoy a right to acquire 18.6% of FanDuel’s operations as well as own a 2.5% stake in Flutter Entertainment. This compensation is considerably huge for Fox Corp. and offers immense financial benefits.

In 2021, Fox and Flutter had both been entangled in a legal battle over the exact price of the 18.6% stake that Fox was to own in FanDuel. Today, FanDuel Sportsbook is worth about $20 billion and owning shares in the company could provide incredible returns. Similarly, Flutter is looking to list on the New York Stock Exchange before the close of the year, presenting another great financial opportunity to Fox to earn more dividends on its stake.

Unfortunately, Michigan online sportsbooks are now down to 14, like they were when TwinSpires quit operation and before SI Sportsbook MI came on board. The big question has now been finding out what sportsbook operator would replace FOX Bet.

Prior to the closure, FOX Bet was the official sports betting partner of the Odawa tribe. This could now force the Indian tribe into a frantic search. For now, FOX Bet has informed customers to access their account and funds from PokerStars Sportsbook. The big problem for Michiganders is that PokerStars does not have operations in Michigan.

Many have now tipped PokerStars to take over from FOX Bet. However, that will require an operating license and approval from the Michigan Gaming Control Board. FanDuel Sportsbook MI may also be favorites to take over should there be a bidding process.