Flutter Entertainment, owner of FanDuel Group, has posted record full-year revenues of $2.76bn for 2019, up 14% from $2.34bn year-on-year in its latest update to investors. And in a detailed US update, the firm has prioritized a ‘first skin’ approach to market in maintaining a successful strategy in the US sports betting sector.

While Flutter’s revenue growth looks good on paper, it was achieved against a backdrop of declining FY2019 EBITDA results which slowed 15% to $497m (FY2018: $582m), due to $138m in incremental taxes and regulatory charges.

Notably, Flutter’s US activities were given significant coverage in the update. Peter Jackson, Chief Executive, commented: “2019 was a very significant year for Flutter, with further successful expansion in the United States, enhancement of responsible gambling initiatives within our business and the announcement in October of our proposed merger with The Stars Group

“In the US, FanDuel finished 2019 as the largest online sportsbook and casino, less than 18 months after the launch of our sports betting operations. Our online market share during 2019 of 44% in the states where we have gone live is testament to the quality of our products, brand and team. We remain as confident as ever in the size of the prize in the US and in our strategic approach which positions us well for the future.”

Expanding on its US strategy, the firm said it believes that certainty of market access in each state is key, ideally via ‘first skin’ access agreements. “First skin refers to having the right to use the first online/mobile licence that a land-based partner is granted in a particular state,” it told investors. “Some states have only granted one skin per operator, for example Michigan, which is why securing first skin access is a priority. 

“We recently secured additional first skin market access deals with The Cordish Company in Maryland and Twin River in Colorado. We now have first skin market access deals in 15 US states. Looking ahead, we believe that the strength of our market share performance to date will make us an attractive potential partner in further states.”

According to Flutter, the 2019 trading period saw the acquisition of 285,000 additional sports betting customers, bringing its total US customer base to over 350,000. Key to that, said the firm, was a strong performing, established US business allied to a database of 8.5 million customers.

The company also cited the influence of its FanDuel brand which, it claimed, resonates strongly, benefiting from a marketing investment of $130m during 2019 alone and over $600m to date. 

“In the sportsbook markets in which we currently operate, FanDuel has the highest unaided brand awareness and leadership in Google search trends, highlighting how the brand has mass appeal beyond its traditional DFS base,” it said. “This has ultimately resulted in a very attractive average customer acquisition cost of less than $250 since the sportsbook was launched.”

Concluding its US summary, Flutter stated: “The combination of favorable customer acquisition economics and our leading product offering means that we have experienced average customer payback of less than 12 months in New Jersey, benefiting from cross-sell to casino. Furthermore, we believe that the standalone New Jersey sportsbook will be structurally contribution-positive in 2020.  

“In 2020, we expect to go live online in at least three additional states (Colorado, Tennessee and Iowa) and we also plan to progress our work on our proprietary technology stack, utilizing group assets to ensure we have sufficient scale and flexibility to deal with individual state requirements.”