The majority owner of FanDuel Group, Flutter Entertainment, announced in the company’s Friday earnings call that FanDuel is the first US sports betting operator to report a profitable quarter.
FanDuel, which started as a daily fantasy sports operator and has grown its presence into retail and mobile sportsbooks, plus a FanDuel Casino component, continues to benefit from a highly widespread US presence while beating its top rival, DraftKings Sportsbook.
Flutter reported that FanDuel closed the first quarter of 2022 with $22 million “in earnings before interest, taxes, depreciation and amortization from its sports betting and iGaming operations,” otherwise known by the acronym EBITA, in financial speak.
The company’s 2022 Q2 report also shares plans to become fully profitable in 2023, which will put it ahead of its competitors.
Flutter Entertainment CEO Peter Jackson said in a statement that Flutter Entertainment’s brand is No. 1 in the US gambling market:
“We are particularly pleased with momentum in the US where we extended our leadership in online sports betting, with FanDuel claiming a 51% share of the market and number one position in 13 of 15 states, helping contribute to positive earnings in Q2.”
A few key points on FanDuel Sportsbook revenue
FanDuel accounts for 33% of Flutter’s revenue, compared to only 10% in the first half of 2019. The brand acquired more than 1 million new players in the first three months of the year. When New York’s sports betting market launched in January 2022, the company acquired 1.2 million new customers in the first quarter of the year and about 250,000 new customers in Q2.
According to Flutter, FanDuel has converted over 60% of its fantasy sports players in New York, New Jersey, Pennsylvania, Indiana, Iowa and West Virginia into sports bettors.
While other operators seemed to have slowed down in the first six months of the year, FanDuel Sportsbook took a different approach, Jackson explained:
“We saw lots of opportunities, so we pushed hard,” Flutter’s CEO said on Friday’s call, “We [didn’t] feel constrained by spend because [we had budgeted] for states that haven’t launched yet.”
“The major point is that we’ve maintained our disciplined approach to customer acquisition. We’ve always been focused on looking at our cost to lifetime value. While other people were pulling back from the market because we saw that lifetime value was being maintained.”
Its main competitors — BetMGM, Caesars and DraftKings — all reported losses year over year for Q2.
US performance driven by efficient customer acquisition
One-third of all new customers acquired in the year’s first half were from US states that launched before 2021, and FanDuel’s cost per player acquisition is under $300, the company said.
Many online sports betting operators had recently cut back massive marketing and promotional costs, as no new states launched in the second quarter of 2022.
Marketing as a percentage of revenue was reduced by 6% due to maturing business in existing states and “disciplined investment,” Flutter said. Therefore, Flutter told investors to expect $300 million in losses to round out 2022.
FanDuel remains Flutter’s No. 1 brand
Given that the platform offers online casino, sports betting and daily fantasy sports contests, FanDuel is likely Flutter’s most popular product
Flutter also stands behind recognizable brands like Betfair, PokerStars, FOX Bet, TVG and Adjarabet.
Thanks to its high-quality design and a user-friendly app featuring numerous promotions and the possibility to place same-game parlays on different events, FanDuel remains players’ top choice.
In the US, FanDuel first launched in New Jersey in Sept 2018. The operator went online in several states subsequently, including Colorado, Illinois, Indiana, Tennessee, Virginia, Michigan, Arizona and Connecticut. In early 2022, FanDuel became live in New York, Louisiana, and Wyoming.