Michigan Sports Betting Could Be Disturbed By New Fox Flutter Ruling

Questions about Fox’s future with FanDuel and the company’s Fox Bet service are being asked. Could there be one less Michigan sportsbook in the future? 

The Fox Corp. Flutter Ruling Explained

The new ruling occurred in November from the Judicial Arbitration and Mediation Services against FanDuel’s parent company, Flutter. 

Legal Sports Report states that the new ruling provides Fox with a “10-year option that expires in 2030”. It allows the team to acquire 18.6% of FanDuel for $3.72 billion, with an additional 5% annual escalator. 

With the escalator, the current value of the stake changes to $4.1 billion.

The Fox team stated the ruling was “fair and favorable.”

“FOX has no obligation to commit capital to this opportunity unless and until it exercises the need. This optionality over a large equity stake in the market-leading U.S. online sports betting operation confirms the significant value FOX has built as a first mover media partner in the U.S. sports betting landscape.”

Fox and Flutter: A Rocky History 

This legal dispute is not new. The Fox and Flutter clash dates back to 2019. 

It all started when Flutter obtained The Stars Group. At the time, this group operated within Fox Bet as part of a partnership.

However, the deal allowed Flutter to seize full ownership of the Fox Bet platform. The Fox team could purchase 50% of Fox Bet and an 18.6% stake in FanDuel.

In 2021, Fox filed a suit against Flutter due to the valuation of FanDuel. It concerned the 18.6% equity stake and its valuation.

FanDuel’s sportsbook value increased to more than $11 billion after Flutter’s acquisition.

But Fox wanted that new valuation applied to its purchase option. On the contrary, Flutter believed the fair market value should be taken from the time of purchase. 

What is the Future of Fox Bet?

Right now, the ruling hasn’t changed anything for Fox Bet. We likely won’t see any changes for at least a year.

Flutter and Fox both have the power to terminate the agreement in August 2023, which would end the sportsbook and the long-running clash.

Fox Bet provides online sportsbook services for Odawa Casinos in Michigan – if terminated, other casinos would be affected.

Though Fox Bet isn’t a top player in Michigan, it’s a consistent performer. Fox Bet sits in eighth place in Michigan’s sportsbook performance, and since January 2021, it has taken $80.4 million in deposits, which adds up to an impressive $5.8 million in total revenue. 

Fox Bet has accounted for only 1.1% of Michigan’s all-time sports betting market share. It isn't much compared to the 16.9% generated by FanDuel/Motor City Casino.

The Fox Bets team prides itself on odds boosts, plus an added focus on NASCAR, the UFC, and the NFL.

How will the ruling affect Michigan sports betting?

Every sportsbook closure is usually announced with plenty of informational messages to all the customers. That was the case with TwinSpires, the first online casino with sportsbook options that left the Michigan market. While the brand’s representatives made their first announcement in February 2022, TwinSpires was actually shouted down on September 6th. 

While in Michigan, there is a place only for 15 licensed online sportsbooks, the Fox Bet closure would open the door for other brands.

There is no apparent connection found without FoxBet, as Odawa Casinos uses PokerStars for online poker and Starts Online Casino for other iGaming operations.

There’s an obvious connection between Circa Sports and Derek Stevens (Detroit), which has also been a potential player in the state. Also, many experts expect to see significant growth in the Fanatics Sportsbook brand.

Besides, the successful launch of sports betting in neighboring Ohio on January 1st can influence the way other operators process.