FanDuel Group recently included in its 2019 financial report the fact that 42% of their 350,000 sports betting customers came in from FanDuel’s daily fantasy sports. The FanDuel financial report also indicated that the company’s online casino revenues tripled during the fourth quarter of 2019.
A company spokesman admitted that FanDuel benefited from their strategy of cross-selling sports betting to their fantasy sports customers. Cross-selling between our products lowered acquisition costs as well as increasing customer retention. Likewise, a $60 million marketing investment in the U.S. also helped push FanDuel over the top.
FanDuel as a 44% market share of the online sports betting in the four states where it operates a Sportsbook. Those states include New Jersey, Pennsylvania, Indiana, and West Virginia. That places FanDuel in the leading position in three of those states. However, statistics released by the Indiana Gaming Commission show that DraftKings takes the lead over FanDuel in that state.
The fact that FanDuel has expanded beyond daily fantasy sports into sports betting and online casino games also boost the company’s profits. FanDuel is now a subsidiary of Flutter Entertainment; Flutter is a part of the Financial Times Stock Exchange 100 index on the London Stock Exchange, which also includes online horse racing website TVG and BetFair.
The potential demand for FanDuel’s Daily Fantasy Sports, sports betting, online casino games, and horse racing now exceeds $10 billion per year.
“We are very proud of our second successful year since we launched legal sports betting in the United States,” said FanDuel Group CEO Matt King.
FanDuel Expands its Sportsbooks
FanDuel’s Sportsbook, which included both its online product and its brick-and-mortar operation at the Meadowlands Racetrack, produced 54% of its net revenue growth in 2019. The reported net revenue for 2019 was $480 million.
FanDuel announced recently that it will go live in 2020 in Iowa, Tennessee, and Colorado.
The 14 states that currently allow legal sports betting encompass only 24% of the US population; however, FanDuel estimates that 23 more states are actively pursuing online casino and sports betting bills. These 23 states represent an additional 44% of the US population.
The U.S. Supreme Court vacated a law in 2018 restricting sports gambling to Nevada, and New Jersey was ahead of the game. The Garden State paved the way for sports gambling back in late 2011. That’s when Garden State residents approved a referendum to approve Las Vegas-style sports betting to the state’s racetracks and Atlantic City casinos.
Flutter Plans Worldwide Expansion in 2020
Dublin-based Flutter recently announced an 18% growth in the company’s worldwide online gaming revenue in 2019. That’s compared to 2018’s 11% revenue growth.
A company spokesperson recently indicated that while executing Flutter’s strategy is a key focus, it is also important to reflect on the future direction of the company and the sector more broadly. Flutter operates in a highly competitive and fast-paced industry that is governed by a plurality of national regulatory and tax frameworks. These are continuously evolving. Regulatory change presents Flutter with both great opportunities but also real potential challenges and risks. To be well-positioned to embrace such change, Flutter believes that global scale and diversification are key to the company’s success.
The spokesperson also indicated that in 2019 Flutter saw examples of both. The continued expansion of regulated sports betting in the U.S. continues to expand. This is an opportunity that Flutter believes is transformational for the company. Our core markets in the UK, Ireland, and Australia also incurred a significant increase in taxes, while our international operations experienced a few unexpected market closures during the first half of the year.
Flutter CEO Peter Jackson stated: “Our 2019 online market share was 44% in the states where we have gone live. That is a testament to the quality of our brand, products, and team. We remain confident in the size of the prize that the U.S. represents in our strategic approach. That will position us well for the future. The new financial year is off to a very good start, with excellent momentum across all of our brands. We are very pleased with the Group’s prospects, and in particular, with our proposed combination with The Stars Group. That will help us to build a more diversified global business.”
The Canadian-based Stars Group operates online brands such as BetStars, PokerStars, and Full Tilt Poker.
Flutter further laid out its strategy for growth in the U.S.; the company continues to believe that market access in each state is key Ideally, access should be obtained through ‘first skin’ access agreements. The first skin is the right to use the first online or mobile license that is granted in each state to a land-based partner. Some states, such as Michigan, only grant one skin per operator. This is why securing first skin access is very important.
Flutter Group recently secured first skin market access deals with Twin River in Colorado and with the Cordish Company in Maryland. Flutter now has first skin market access deals in fifteen states. As time goes on, the strength of Flutter’s current market share performance will make the company an attractive potential partner in even more states.