Flutter CEO encourages sweepstakes operators to enter the regulated arena

Flutter Entertainment CEO Peter Jackson has called on sweepstakes operators to “cross the Rubicon” and enter the regulated space, as he championed the FanDuel parent company’s commitment to ‘white’ markets.

Speaking as part of his keynote address at G2E in Las Vegas, Jackson was pressed by CNBC’s Contessa Brewer on the explosive growth of sweepstakes and why Flutter hadn’t launched a sweepstakes product.

Conversations at the industry expo have turned to the much-debated sector, according to those on the floor at the annual event, with Discerning Capital’s Davis Catlin taking to LinkedIn to suggest most of the chatter is around the topic.

Sweepstakes gaming has exploded in recent months, with some lobbyists and opponents arguing sweepstakes are sportsbooks operating under another guise.

Analyst firm Eilers & Krejcik Gaming estimated the sweepstakes industry was worth $11bn in 2023, up 66% on the previous year.

As well as pure sweepstakes operators such as Fliff and Chumba Casino, the sector has been joined by betting operators looking to capitalize on being able to offer their products in dozens of US states.

For instance, predictions market Novig has closed and relaunched as a social sweepstakes operator, while Prophet Exchange surrendered its license in New Jersey and re-emerged as a sweepstakes operation called Prophet X.

Players in California and Texas, where sports betting is not yet legal, have access to the likes of Fliff, which is one of the brands dominating the US sweepstakes market.

And, as the pressure as mounted, sweepstakes operators came together last month to form the Social and Promotional Gaming Association trade body to support the sector.

When asked why Flutter hadn’t followed the trend into sweepstakes, Jackson was steadfast in his commitment to only operating in regulated markets and sectors.

He said: “We operate in different markets, but we are only focused on operating in areas which are regulated.

“Now, there are benefits from a regulatory perspective. The states get to earn taxes. We have a lot of controls in place. If you think about the work that we do to ensure that we take responsible gaming, very, very seriously, it starts on the top.

“I do it. Amy [Howe, FanDuel CEO] does it. The whole organization’s very focused on it. It’s a cultural thing. It’s a data science thing. It’s taking learning some other markets, and also from an integrity perspective – the data that we collect we can share with the sporting codes.

“Having these things regulated is crucial. And to the extent that these things are regulated then we will participate, but we do think it’s important that they cross the Rubicon and become regulated, for all of those reasons.”

Also, during his conversation with Brewer, Jackson touched on the illegal market as he expressed his surprise at the ease by which customers can access and play with offshore firms.

The Flutter CEO went on to note that no single jurisdiction or market had laid out the blueprint for tackling the illegal market.

He said: “I find it difficult that it is still so easy for people to access some of these offshore operators, because they don’t end up paying taxes, the customers are not protected, [and] you don’t get the same degree of protection from a sports integrity perspective.

“I would like to see more done to prevent that. I’m not sure I could point to a country that say they’ve nailed it in terms of closing down the offshore market. It’s very difficult, particularly with crypto and some of the other solutions now available.”

In his concluding remarks, Jackson acknowledged it was neither sweepstakes nor the illegal market that were the biggest threat to Flutter.

Instead, when asked what his main concern about future success was for the New York-listed company, Jackson replied internal complacency and public perception of the industry.

He said: “We try really hard, once we’ve got the scale of a leader, to make sure that we maintain the mindset of a challenger. I think that’s as true for us in the US as it is in the UK, Italy, Australia, and the other markets we operate in. Avoiding complacency is crucial.

“I think ultimately, the societal license is key. By that I mean there are three groups of people: there’s people who enjoy a bet, there’s people who don’t like it at all, and they’re pretty vocal about it.

“And there’s people in the middle. The people in the middle actually have a significant voice. We have to maintain our societal license, and I think that’s the most important thing for us.”