At the end of 2021, FanDuel accounted for 40 percent of the share of gross gaming revenue (GGR) in the U.S. online sports betting market. Just six months later, the gap had widened to 51 percent.
Ireland-based Flutter Entertainment PLC, FanDuel’s parent company, credited the strength of the brands, strategic partners and efficient marketing for the success, according to Covers.
“In the four years since launch, FanDuel has refined its state launch ‘play book,’ converting customers from our daily fantasy sports database at a faster rate with each new state,” the company said in a press release.
In order to close the gap, other operators might resort to introducing new products, bonuses and other advances. Mergers with other companies may also boost the operators below FanDuel.
That said, many operators have already had to pull back on promotions in order to cut costs and increase profits.
“We are particularly pleased with momentum in the U.S. where we extended our leadership in online sports betting with FanDuel claiming a 51 percent share of the market and number one position in 13 of 15 states, helping contribute to positive earnings in Q2,” Peter Jackson, Flutter’s CEO, said in a statement.
FanDuel’s position diversifies how Flutter brings in revenue. The U.S. accounted for more than a third of Flutter’s revenue in the second quarter, and the U.S. business was profitable for those three months as well.
Average monthly players in the U.S. came to just about 2.2 million the first six months, an increase of almost 50 percent from the prior year. Handle rose 115 percent year-over-year to approximately $13 billion, and revenue was up 61 percent, to about $1.4 billion.
“This was driven by efficient customer acquisition in new and existing states, our superior product driving strong customer economics and good operating efficiencies, offset by the cost of our sportsbook launch in New York where tax rates are higher,” the company said.
Flutter reported total revenue of about $4.1 billion, up 11 percent. After taxes, though, the company had a net loss of about $135 million.
“The second half of the year has started well and we look forward to the start of the football seasons in both the U.S. and Europe,” Jackson said. “Being part of the Flutter Group provides unique strategic advantages to our portfolio of brands, giving access to expertise, technology and resources to drive performance and capitalize on further growth opportunities we see ahead.”
Meanwhile, FanDuel is one step closer to entering the coveted Nevada sports betting market, now that the Nevada Gaming Control Board (NGCB) has formally recommended the company for a limited partnership with operator Boyd Gaming.
The matter will now head to the Nevada Gaming Commission (NGC) for final consideration on August 25. If approved, FanDuel would act in an advisory-type role for Boyd at its Fremont Hotel & Casino property sportsbook, which would be redesigned under the FanDuel brand. Boyd has partnered with FanDuel in other states where the company operates and FanDuel is licensed.
Despite the branding change, FanDuel representatives told the NGCB that the company will not import any technology into the state, and that Boyd will continue to operate its sportsbook and mobile app.
Erica Okerberg, an attorney for FanDuel, confirmed during the NGCB hearing that “the plans are only to provide information and guidance based on customer patterns, knowledge, and information through FanDuel and Flutter models. There will be no pooling of risk from any other FanDuel sportsbook.”
Okerberg did add, however, that there would be a “revenue share with operating that retail sportsbook.”
FanDuel was previously issued a cease and desist order back in 2015 by the NGCB for taking wagers on its daily fantasy platform without proper licensing. However, the company has since changed ownership, and is now under the umbrella of Flutter Entertainment.
According to Okerberg, “there won’t be any FanDuel employees (at Fremont),” and the sportsbook will continue to use its existing IGT-based software. NCGB Chairman J. Brin Gibson raised concerns about the details of the proposed partnership, specifically about how consumers may be misled by the sportsbook’s branding change.
Gibson asked FanDuel’s Howe: “If a patron has a dispute, are they going to presume it’s FanDuel?”
Howe reiterated the fact that the company has been “co-branding sportsbooks since we started operating,” and added that she doesn’t “have concerns around situations like this where a company is licensing a brand.”
It’s easy to see why board members would have concerns about FanDuel’s involvement in operations at the Fremont location, given the fact that the company does operate sportsbooks and provide its mobile app in 13 other Boyd properties across the U.S.
Howe said that she understood the trepidation, but reiterated that the company “has experience with this similar model with a couple of other jurisdictions, particularly in tribal markets. They’re very familiar with this and it’s not a first-case impression in understanding where the lines are. I feel confident the team understands those lines and the Boyd team understands those lines and everybody wants to work together to make sure they’re not crossed.”
