FanDuel expects to be profitable in the US by 2023.
That was the key update from FanDuel parent Flutter, who reported a bullish set of Q2 results on Tuesday morning.
Key numbers from FanDuel results
FanDuel Group grew revenues 159% to $906 million, with marketing spend at $404 million.
The company has acquired 2.2 million customers since launching sports betting at an average CPA of $291.
On average, those customers generate a 20% return on their acquisition cost in the first year, Flutter said.
Potholes on road to profits
Those figures should lead to profitability by 2023, Flutter noted, assuming nine more states go live with sports betting, including New York.
If Florida, Texas or California go live before 2023, FanDuel would spend more on acquisition and potentially delay profitability.
“That would be a nice problem to have as it mean our addressable market would be even bigger,” said Flutter CEO Peter Jackson.
Bright outlook for FanDuel
Jackson continued with positive comments about future US economics.
“We remain the number one online sports betting operator by some distance thanks to the quality of our products and the extensive reach of the FanDuel brand,” Jackson said. “The customer economics we are seeing in the US bode very well for the future, with early FanDuel customers generating positive payback within the first 12 months of acquisition.”
FanDuel generated 56% more revenue than DraftKings in H1, with similar marketing spend.
It also had a 45% share of US online sportsbook revenues in Q2.
Focus on casino?
In an analyst call Tuesday, Jackson fielded multiple questions about iGaming in light of DraftKings’ acquisition of Golden Nugget Online.
“In gaming, we see an opportunity to grow our market share and look forward to further enhancing our product offering in the coming months,” Jackson said.
He said the company was refining its cross-sell process and was happy with its existing gaming brands including Stardust Casino.
“We run the world’s largest online casino business so we have tremendous know-how within the organization,” Jackson said.
He said Flutter expected eight of the next nine states to regulate sports betting only, so sports would remain the priority.
Whither FanDuel IPO?
Finally, Jackson touched on the potential FanDuel IPO, that was recently put on the backburner.
He suggested it was still an option in the future. However, he said Flutter would only ever spin off a small part of the business to retain full operational control.
“That’s one of the reasons FanDuel has done as well as it has,” Jackson said. “It has the full support of the global business so we wouldn’t want to change that.”
Flutter stock climbed 8% on the London Stock Exchange following the results.