FanDuel Finds Gold Medals In US Sports Betting Don’t Come Cheap

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FanDuel owner Flutter Entertainment confirmed in a Tuesday release its place as the largest operator in US online gambling with its latest earnings report, growing US revenue 81% to $967 million in 2020.

That included an 86% rise in stakes at FanDuel Sportsbook to $6.1 billion and a 101% rise in sportsbook revenue.

Flutter said the overall US business including casino, daily fantasy sports, and horse racing, was 40% larger than its nearest competitor DraftKings. It was also larger than the second- and third-largest US operators combined, the company said.

 In Q4, FanDuel had 40% of the online sports betting market and 20% of iGaming.

FanDuel leads US charge for Flutter

Flutter CEO Peter Jackson noted the US specifically in his comments on the trading update:

“Nowhere has our growth been more evident than in the US where we have consolidated our #1 position in this crucial market,” Jackson said. “We finished the year as the first US online operator to reach over $1.1bn in gross gaming revenue.”

The operator posted a $237 million EBITDA loss for its US operations in 2020. That included $484 million spent on sales and marketing.

US sportsbook customers more valuable than Europeans?

However, management said customer economics were so strong it would continue to invest heavily. For instance, the average value of a US player is 80% higher in the first 12 months than a European equivalent, Flutter said.

That number will likely fall as the market gets more competitive. However, Flutter said some of it was driven by its “market leading” product and features like same-game parlay.

In that vein, the firm is aiming to migrate fully to it in-house betting platform before next NFL betting season.

The proprietary platform offers scalability and full access to the “Flutter feature factory,” the company said. 

What next for FanDuel?

Elsewhere, management were non-committal when asked about the prospects for spinning out FanDuel as a standalone company.

However, management upgraded its 2025 addressable market projection to more than $20 billion. That included Texas for the first time.

The upgrade was also driven by an increase in the value of customers in states like New Jersey and Michigan. Flutter’s share price was last down around 2% following the trading update.