Flutter CEO: DFS base key to “pretty remarkable” Ohio sports betting success

Flutter Entertainment CEO Peter Jackson has lauded the role of FanDuel’s existing daily fantasy sports (DFS) footprint in enabling the firm to gain a near 50% share of online sports betting in Ohio.

Despite only launching on January 1, Ohio has quickly broken the $1bn handle barrier in a launch period reminiscent of New York in January 2022.

The state’s 17 licensed operators generated $205.7m in taxable revenue over the period.

US market leader FanDuel led the way in January, taking in almost half (45%) of the month’s handle total ($494.1m) and half of the state’s revenue ($103.2m).

Speaking as part of the Flutter group’s 2022 financial results call, CEO Jackson was keen to pay tribute to the team behind the Buckeye State launch.

“We were really pleased with the way which the team performed to get to a point where we’ve got 6% of the adult population as customers of FanDuel in such a short order in Ohio, and to have near 50% of the market was pretty remarkable,” Jackson said.

“We were clearly leveraging our DFS base hard in the state.

“I think, we probably got nearly some 67% penetration of our DFS base in Ohio already, which is a new record for us. I think the team refine and enhance and improve the state launch playbook with each one that we see and I’m really pleased with the results that they delivered,” he added.

DFS conversion into sportsbook comes as Flutter’s overall revenue from DFS and its horseracing TVG business fell 12% to less than 10% of Flutter’s US revenue, with the historic products playing second fiddle to its more profitable sportsbook in the US.

However, the Flutter Entertainment CEO confirmed both DFS and TVG were still important components for the business in the US.

“If we look at the states where we have FanDuel live, we’ve been taking share off the back of that by bringing racing, frankly, to the new audience in America who hadn’t previously participated,” Jackson explained.

“From a DFS perspective, it’s clearly a very important product in the markets in which we operate like, for example, the states which haven’t yet legalised sports betting, where customers are continuing to enjoy our DFS products,” he added.

Jackson was also lavish in his praise for how FanDuel had handled the other big launch state of Maryland, claiming US launches were getting “better and better” for the firm every time.

FanDuel jumped out to an early lead in Maryland, accounting for $236.2m in handle, or 47.5% of the market, in December. However, the firm’s US financials also benefitted from a greater proportion of business coming from existing states where marketing spend is lower.

Addressing this, Jackson pointed to 2022 performance, namely a 24% increase in staking across US states launched pre-2021, with revenues from these markets rising by 42%.

“We’re seeing more efficient marketing acquisition and we’re able to reinvest that in having better products, better generosity driving wallet share, driving further customer volumes and really getting that flywheel powering,” he explained.

FanDuel has continued to deliver strong financial performance for Flutter, characterized by the US division achieving a 50% share of the US online sportsbook market in Q4, with the firm reporting 67% year-on-year (YOY) revenue growth in 2022.

Central to this, Flutter’s outgoing CFO Jonathan Hill contended was the long-standing focus on investment discipline, particularly as other firm’s in the market had reduced their investments after spiralling losses.

“What we saw after the Superbowl last year was competitors pulling back heavily from their aggressive offers which we saw as an opportunity to step in and acquire more business, and we did so because we saw really good paybacks,” Hill said.

“We’ve always shown discipline in our US business, so by investing more heavily while people were pulling back, that absolutely has led to the 50% share we had in in Q4 and online sports betting,” he concluded.