Flutter flexes FanDuel’s sportsbook muscle as 2022 marketing costs reach $727m
US market leader showcases 42% market share arising from “single biggest opportunity” with more set to follow
Flutter Entertainment CEO Peter Jackson has paid tribute to the growth of FanDuel, proclaiming that the US market leader is performing “better than we could have hoped” following the repeal of PASPA in 2018.
Speaking at an capital markets day (CMD) for FanDuel held in the firm’s New York office, Jackson extolled the brand’s success in the market, providing greater detail on how strategically FanDuel and Flutter interact.
“The US market represents the single biggest opportunity in our sector today and we are proud to own FanDuel, the premier asset within this market,” Jackson said.
“FanDuel’s success demonstrates the importance of global scale combined with local leadership and expertize. A clear strategy focused on the customer has delivered the number one position that FanDuel enjoys today and will continue to ensure FanDuel is the long-term market winner.
“The superior economics that FanDuel enjoys as the market leader represents an enormous value creation opportunity for the group as our US business continues to grow,” he added.
A key strategic element of the cooperation is the relationship between the FanDuel Advantages and the Flutter Edge programs, initiatives which the operator suggested had produced a “winning position of unparalleled scale” in acquiring, retaining, and growing customer numbers.
“We are confident in a path to a 2030 total addressable market of more than $40bn in gross gaming revenue which represents growth of 4.5 times the size of the market today,” Flutter said.
The firm suggested that these mature EBITDA margins in the business would be equivalent to those in Flutter’s other divisions, with growth potential implying “significant levels of long-term profitability”, increases which could enable group level transformation.
Lifting the lid on the FanDuel business, Flutter confirmed a US sportsbook market share of 42% and a 18% share in igaming over the Q3 2022 period, with the brand having seven million US account holders.
During January to September 2022, the FanDuel app was downloaded 3.3 million times, compared to just 2.8 million for its nearest rival DraftKings, with FanDuel spending less on marketing at $727m than DraftKings which spent $803m in the same period.
In respect of daily fantasy sports (DFS), Flutter confirmed that 84% of its DFS customers had also placed a bet online via its sportsbook.
According to data provided during the CMD presentation, 25% of FanDuel’s customer activations have been through referrals, with costs per acquisition (CPA) arising from referrals 60% lower than other player acquisition methods used by FanDuel.
Drilling down into FanDuel’s revenue mix, the operator confirmed more than two-thirds (66%) of its overall revenue came via its sportsbook, falling to 23% in igaming, and just 4% in DFS. Racing and sponsorship revenue amounted to just 7% in the same period.
FanDuel product make-up
The numbers are a marked contrast to 2018, the year of PASPA’s repeal, when DFS accounted for 45% of the company’s revenue, just ahead of racing and sponsorship with 42%.
Jackson lavished praise on the FanDuel CEO Amy Howe for playing her part in that success following her appointment to the top job in October 2021.
“Amy Howe and the leadership team have done a phenomenal job in executing on FanDuel’s strategy to date and we remain excited about continuing FanDuel’s success story,” Jackson said.
Also speaking at the CMD, Howe cited the untapped potential of the US market, speculating that roughly 80% of the US population will live in states with regulated sportsbook markets by 2030, with a quarter of those having access to igaming at the same time.
Discussing potential sportsbook launches, Flutter confirmed that a proposed launch of the FanDuel sportsbook in Maryland is set to take place within the next week, subject to approval by the Maryland Sports Wagering Application Review Commission.