Flutter Gives Nod to FanDuel & US Progress in Earnings Report

Flutter Gives Nod to FanDuel & US Progress in Earnings Report
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Flutter Entertainment, the largest online gambling operator in the world that counts FanDuel in its portfolio of brands, reported total group revenue of $7.35 billion for 2020, on a pro forma basis, an increase of 28% increase year-over-year. Other Flutter companies include Paddy Power, Betfair and Poker Stars.

Flutter’s revenue report fairly gushed over its performance in the U.S. pointing out that “in the U.S. we have continued to make huge progress.”

Dublin-based Flutter reported that following recent launches in Michigan and Virginia (both in 2021), that the FanDuel sportsbook is now live online in 10 states and reaches “almost a quarter of the U.S. population.”

FanDuel remained the market leader in the U.S. with fourth-quarter market shares of 40% in online sports betting and 20% in iGaming.

The U.S. online gambling market is exceeding expectations, Flutter said in its earnings report.

“We now expect the (total addressable market) for our US brands to exceed ($20 billion) in 2025, a material upgrade to our previous estimate.”

It attributes that calculation to:

An increase in spending patterns that FanDuel is seeing in its early significant states (e.g. New Jersey, Pennsylvania and Michigan).

A projected increase in the number of states that are expected to legalize online sports betting and gaming. By 2025, Flutter said, it expects online sports betting to be available to 65% of the US. adult population and iGaming to be accessible to 16%. That’s up from past estimates of 50% and 11% respectively.

Customer Acquisition Costs Lead to Net Loss

Still, the cost of customer acquisition drove a net loss.

“In the U.S., our 2020 EBITDA loss of £170 million ($237 million) reflected our ongoing investment in customer acquisition in both new and existing states,” Flutter said.

Flutter said that it had strong performance in customer retention in the U.S., noting that “on average, retention rates in the U.S. after 12 months have been 1.8 times those of our UK brands.”

“During Super Bowl LV week, we acquired over 350,000 new sportsbook and gaming customers, exceeding our customer acquisition for all of 2019,” Flutter said. “Our 2021 customer acquisition year to date is already close to 90% of that achieved in all of 2020. … Our U.S. revenues currently exceed our next two nearest competitors combined.”

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