If the US sports betting market is an arms race, then FanDuel might have the biggest arsenal. And the current market leader showed off its firepower in August, dropping $80 million into accounts across the US as sports returned.
But the group has more than just deep pockets. Flutter’s mega-merger with The Stars Group also saw Fox Bet and PokerStars brought under the FanDuel umbrella. How best to maximise all those assets? LSR caught up with FanDuel Group president and temporary Fox Bet chief Kip Levin to find out his plans for a frenetic second half of the year.
LSR: What has the return of MLB done to betting volumes?
A: It’s been huge. The first game back, we did more turnover than on Game 7 of the World Series last year. There’s a lot of pent-up demand around real sports coming back. Given the state of the world, people are excited to bet.
LSR: Do you expect that interest to keep ramping up as more sports come back, or are most bettors already betting again?
A: We would absolutely expect more growth. We have customers who bet on all sports, and customers who only bet their favorite sports. You’ll see those different groups of customers coming back with NBA, NHL and NFL. Another variable is we just went be live with the FanDuel Sportsbook in Colorado and other new states compared to a year ago when we were really only live in NJ.
LSR: Some analysts have suggested the US market long term will be a FanDuel/DraftKings duopoly. Is that how you see it?
A: There are a lot of competitors coming in and ramping up their investment. There’s a cash influx from these various IPOs too, so this is not going to be a two-competitor market. We’d love to see a world where we sustain a 40+% market share, but as we look around the globe, there aren’t many markets where that happens. It remains to be seen whether it looks like Australia, with a small number of big players than longer tail, or more like the UK, with six or seven big firms.
LSR: We heard from one pro bettor that FanDuel limits had come down in recent months. Was that a deliberate strategy?
A: There hasn’t been a concerted effort to reduce limits. We are one of the operators who are most open to taking bets from different types of customers. It is possible some limits were lowered but there are many variables that go into that. But I can’t say there’s been a strategic move to do that.
LSR: FanDuel Group and Fox Bet became one division back in July. How closely are those teams working together?
A: It’s been challenging to do integration work with COVID but we are working very closely together now. We are working on a specific strategy for the Fox Bet brand. This week we rebranded Fox’s sports betting show “Lock It In” to “Fox Bet Live.” You’ll also start to see a lot more integration of the Fox Bet brand into live sportscasts, their newly launched Fox Sports digital platform, and the return of Super 6 with MLB.
The Fox Bet playbook is different from the FanDuel business. Fox Bet is very focused on recreational customers given the Fox platforms we’re using. And we’re certainly excited to see how that works.
LSR: It sounds reminiscent of the Paddy Power Betfair approach with one brand aimed at the more recreational customer and one brand willing to take on more customers perhaps?
A: That’s a good analogy.
LSR: Some have suggested that running two brands in the US might prove too costly in the long run?
A: Right now, the strategy is to run two brands. We are comfortable with the operational complexity of operating here, and we have a lot of experience with it. In contrast, others might look at that operational complexity as being hard to overcome. We don’t see it that way, and again we don’t see it being a duopoly long term. We have two strong brands with unique assets, so I see no reason we couldn’t make a dual-brand approach work.
LSR: Would that mean moving them onto one platform?
A: Long term, you would expect we’d put them on the same platform. But with distinct front ends, different markets, prices, so they would be fully differentiated.
LSR: Would that be on the FanDuel platform, which is a bit of a tech Frankenstein at the minute, with parts from several different companies?
A: I can’t get into a ton of details, but we are actively evolving that platform to pull all products under the same roof, with one wallet, one account. That work has been going on for quite a while. But when that’s all been pulled together, you’d imagine that would be the platform.
LSR: Does that dual-brand approach mean FanDuel stays away from big integrated media partnerships then?
A: We have a pretty aggressive integrated media strategy for FanDuel, as well. We have a big partnership with Pat McAfee who has been a phenomenal partner to us. And we just announced an exclusive betting deal with The Ringer, which is huge in the podcast space. We are also doing some unique NBA integrations with Turner’s NBA broadcasts. And then we are looking at other regional media partners who have a strong base in certain states. The US has a vast array of options around sports media and its evolving fast.
And I’d add as well, we’ve seen huge growth around horse racing during the pandemic. We own the TVG racing network, which is carried in close to 50 million US homes and has seen record growth in ratings over the past six months. It’s 24/7 live racing, and we’ve really ramped up integration of content and promotions around the FanDuel Sportsbook business.
LSR: Presumably the end of remote registration in Illinois was not part of your plans there?
A: We were optimistic that in-person registration was going to be on hold and we were proceeding with that expectation. So, it’s a disappointing outcome, especially when you consider general health and safety. That said, we’re pushing ahead and working hard on getting launched. We have a few different options in terms of market access. This is a marathon and not a sprint, so while it’s a disappointing setback to have those limitations, we expect to be launching at some point in the near future.
LSR: Is exchange wagering anywhere near the top of your priority list?
A: We’ve had the racing exchange in NJ for a couple of years, but it never really gained enough traction. That’s largely because you need rights for all the tracks, and we never truly got them comfortable with the low-margin commission model. So, we’re pulling that down for now, but that’s not to say we’d never bring it back if we had the opportunity. As you know, the biggest issue for sports is the Wire Act and not having cross-state liquidity. Long term, we’d be very excited to see the exchange model come to the US.