Fox Bet Set To Generate A Loss Of $40m, Per Q3 Stars Group Report

• The Stars Group launched online sports betting operations in Pennsylvania and New Jersey during the third quarter of the year.
• Flutter agreed to acquire the Stars Group during Q3, the sale won’t be completed until 2020.
• The Stars Group International decreased in revenue due to local restrictions on deposit methods for online sports betting and gambling.

TALLAHASSEE, Fla. – The Stars Group (TSG), owners of popular online gambling brands such as PokerStars, BetStars, Sky Bet, and most recently Fox Bet, have reported a mixed result for their third-quarter performance.

According to the report, total revenue for the company rose 8.8% when compared to the same three-month period for last year. The Stars Group was able to generate $622.5 million for Q3 2019 as opposed to the $571.9 million for Q3 2018.

Revenue was largely driven by an increase in legal sports betting.

“During the quarter, online sports betting was The Stars Group’s largest product vertical (35.0% versus 27.7% in 2018), followed by online casino (31.3% versus 31.6% in 2018) and online poker (30.9% versus 37.7% in 2018).”

A big reason why online sports betting revenue grew during the third quarter of 2019 is due to the launch of Fox Bet in Pennsylvania and New Jersey. But, despite revenue increasing, the app is expected to generate a loss of $40 million in 2019. This estimated loss was previously disclosed by the company.

TSG’s net loss amounted to $51.7 million for Q3 2019. Another factor that attributed to this amount was a decrease in revenue from international markets. The company pointed to foreign exchange fluctuations, regulatory changes, and local restrictions on deposit methods as the reason for the decrease in revenue.

When compared to last year, these countries only attributed to 14% of the company’s Q3 2019 revenue in the international segment as opposed to 20%.

However, The Stars Group saw nothing out of the ordinary.

“Our third-quarter results were robust and in-line with our expectation, supported by strong revenue growth in our United Kingdom and Australia segments, which helped offset both the ongoing disruption in certain of our lower-priority international markets and continued foreign exchange headwinds across the business,” said Rafi Ashkenazi, CEO of The Stars Group.

“We have also made rapid progress in the U.S. following our landmark Fox Sports deal in May, with the launch of our Fox Bet products at the start of the professional football season in New Jersey and Pennsylvania and some very encouraging signs from our Fox Sports Super 6 nationwide free-to-play games.”

During the quarter, Flutter Entertainment agreed to acquire TSG through a $6 billion all-stock deal. However, completion of the sale is expected to happen in 2020 pending regulatory approval.

News tags: FOX Bet | FOX Sports | New Jersey | Pennsylvania | Rafi Ashkenazi | The Stars Group