FanDuel Group expects to lose $185-210 million this year as the company embarks on an aggressive customer acquisition spree around the NFL season.
Peter Jackson, CEO of parent company Flutter, said the group had learned its lesson from previously not investing heavily enough in states like New Jersey.
“We know how important it is when states start to open up to invest hard to acquire customers,” Jackson said.
“You’ve heard me say before we wish we’d spent more money historically in some of the states when they first opened up, because the customer economics have ended up looking better than we imagined.”
Specifically, Jackson said retention levels were better than other markets, leading to better lifetime players values.
“When we look at those charts, we get very comfortable with our level of investment,” Jackson added.
The risk of course is over-saturation. It’s already a growing issue in Colorado.
FanDuel’s expansion plans
Jackson said the EBITDA loss would be at the lower end of the range if remote sign-ups for Illinois sportsbooks were revoked again.
Overall, revenues from the US business climbed 66% in H1 to $366 million. Horse racing and online casino and poker picked up the slack in Q2 when sports were absent.
Sportsbook stakes increased by 23% in the half, but it was a tale of two quarters. Q1 saw growth of 81%, offset by a 44% reduction in Q2.
The group added more than 350,000 customers in the half.
Big plans for proprietary tech
Elsewhere, FanDuel pledged further consolidation of its US business onto its own technology.
The company has been combining DFS, sportsbook and casino accounts in NJ and Pennsylvania in recent weeks. And it will continue that into H2 by replacing all third-party platform technology with its own.
“That will give us effectively end-to-end control of our tech in the US market,” Jackson said.
“The team in America will own their own version of the sports betting platform that they can make changes to. Now of course, if they design/develop a fantastic feature, that will then become available to the teams in Europe, and vice versa.”
Jackson said that approach allowed teams to maintain a local focus but benefit from the group’s global scale.
Flutter shares were essentially flat on the London Stock Exchange following the results announcement.
Goldman Sachs issued a”Buy” rating on the firm, with a price target of 13,200p.