Some U.S. sportsbooks pull back on marketing in an effort to hit profitability, but FanDuel is doing the opposite, according to Legal Sports Report.
The acquisition opportunity is too good right now to pull back, Flutter CEO Peter Jackson explained during the company’s trading update
That is even after a first quarter that saw FanDuel add more than 1.3 million customers in the US, which is more than 70 percent of the new customers acquired in all of 2021, Jackson said.
FanDuel is spending around $290 per new customer with average paybacks in 12 to 18 months, which has management ready to keep working for more players.
“We are continuing to push hard on driving some customer acquisitions and we’re very, very pleased with the acquisition costs that we’re seeing and the lifetime value dynamics that we’re also seeing,” Jackson said. “It’s giving us real conviction and we’re leaning in very heavily to acquire as much business as we can.”
The only market where FanDuel pulled back slightly is New York, Jackson said, though new customers are still flowing in there. The company said NY sports betting exceeded expectations with how fast its daily fantasy players are converting into sportsbook customers.
“Other people are stepping back as they are finding the dynamics difficult, but we are seeing a continued big opportunity and are really leaning very hard into it. On a post-Super Bowl basis, we believe that the marketing intensity we are seeing, and the generosity levels have stepped back more significantly this year than we have seen in previous years amongst our competitors.”
Multiple sportsbook operators are making changes based on profitability. Caesars Sportsbook is dramatically cutting back on traditional marketing while Churchill Downs is ending its online sports betting and iGaming business altogether.
Total bets across U.S. sports betting and iGaming more than doubled to $7.7 billion in the quarter with revenue of $574 million in the first quarter. That came from a 43 percent increase in average monthly players to 2.4 million.
There was a flood of customers signing up for Super Bowl betting, as the day of the game was FanDuel’s single biggest day ever for new customers. More than 1.5 million players were active on Super Bowl Sunday.
March Madness betting also set a new record with nineteen million bets across the tournament. FanDuel was the top online U.S. sports betting operator in the quarter with a 37 percent market share, according to the trading update.
FanDuel excited for California proposal. Jackson noted the online California sports betting proposal that should be on November’s ballot has a best-in-class campaign team and significant levels of funding.
It also could bring in hundreds of millions in tax funds for homelessness and mental health solutions, he added. The measure would face a competing tribe-backed proposal that would limit the market to retail wagering for at least five years.
“We are doing everything we can to make sure ours is successful. If it is successful and adheres to the expected timetable, we would think the state would launch in time for the 2023 NFL season,” Jackson said.
