FanDuel boosts Flutter’s success in Q3

There’s nothing a sports bettor likes more than to receive a profit boost on a bet.

This morning, Flutter Entertainment, which is also a parent company of PokerStars, Paddy Power Sportsbook, Betfair, explained on a Q3 financial results conference call, how its bet to purchase FanDuel for $4.2 billion in 2020 is still paying off.

During the three-month period ending on 30 September, Flutter reported that it increased its group revenue to £2.03 billion up from £1.89 billion, which marks a 13% increase year-on-year.

A huge reason for this growth is the performance of U.S.-based FanDuel.

In Q3, U.S. group revenue increased 12% year-on-year as it grew from £598 million to £668 million, no doubt in part due to the sports betting application cornering a 40% Gross Gaming Revenue market share of online sports wagering.

“We are particularly pleased by the great progress we are making in the U.S.,” said Flutter Chief Executive Peter Jackson. “We are the first online operator to achieve structural profitability, and the strong ramp in EBITDA during 2023 will continue into 2024 and beyond, as our profit margins expand materially.”

Since the NFL season kicked off in the U.S. back in September, FanDuel upped its new-player acquisition numbers by 38%, which equates to 2.6 million users during the third quarter.

“I am excited about our plans heading into the sports rich months of November and December as we execute on our winning strategy which, combined with the FanDuel Advantage, keep us leading the industry,” said Jackson.

FanDuel’s revenue is up 52% year-on-year; it also secured the second position in iGaming with a 23% market share. Despite those impressive numbers, DraftKings overtook FanDuel for the first time in U.S. iGaming market share during its Q3 that ended 23 August, according to Eilers & Krejcik, earning approximately 31% of online sports betting and casino gaming revenue.

Going forward, Flutter as a whole projects revenue and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to be approximately £3.75 billion and £140 million. This would achieve structural profit for the full year despite ongoing investment in customer acquisition to drive long-term growth.

“We don’t anticipate the backend of this year to be any different,” said Jackson. “We don’t expect next year to be any different. We will acquire as much business as possible.”

One thing that will change in 2024, is Flutter’s presence on the New York Stock Exchange as the company announced that it expects this to transpire during Q1 of next year.

To continue preparing for this move, Flutter will cancel its listing on Euronext Dublin, which is Ireland’s main stock exchange, as it feels "it is appropriate to maintain just two listings to minimize regulatory complexities.”

“We are making good progress toward our U.S. listing which will bring the group significant benefits from accessing the world's deepest and most liquid capital markets,” said Jackson. “Overall, the significant potential for U.S. growth and ability to leverage scale benefits across our diversified portfolio outside of the U.S., underpins our confidence in our significant and sustainable long term earnings growth potential."

Only time will tell how both FanDuel and DraftKings reign will last with Fanatics recent acquisition over the summer of PointsBet and the imminent launch of ESPN Bet on 14 November.