FanDuel Group owner Flutter Entertainment plc has published a trading update for the three months ended March 31 2020 showing revenue growth of 29% pre-sports disruption, but a significant fall in US sports revenue from March 16 to April 12.
The headline figures reveal total revenue for the period of $679m, up 16% from $594m year-on-year, or 29% pre-March 15 year-on-year. US revenue growth of 72% reflected a strong performance across both sports and gaming, said the firm. This was driven by further expansion into additional states and continued “excellent customer acquisition”.
The FanDuel brand acquired over 100,000 new customers since the beginning of the year, bringing total sportsbook customers acquired since launch to over 450,000. As a result, FanDuel’s online sportsbook continues to enjoy a leadership position with an approximate 41% market share.
During the period Flutter also added to its US retail portfolio with expansion into two additional states, Mississippi and Michigan.
Updating investors, the firm stated: “Our partnership with Motor City Casino in Detroit secures high quality first skin market access in Michigan and access to a marquee retail location. US gaming revenue increased by 260%, driven by successful cross-sell strategies in both New Jersey and Pennsylvania.
“FanDuel’s combined online gaming market share in New Jersey and Pennsylvania reached 25% in February. Revenue across our TVG racing and Daily Fantasy Sports businesses grew 3% year-on-year.”
Chief Executive Peter Jackson commented: “The group performed very well in the period prior to the disruption to sporting events in mid-March. We delivered strong customer growth across each of our brands and benefited from favorable sports results across our sportsbooks.
“Following the widespread cancellation of sporting events, group revenues have been more resilient than we initially expected, helped by the continuation of horse racing in Australia and the US. Gaming continues to perform well across the group.
“During this unprecedented time, we are keenly aware of our heightened responsibility to ensure that we do all we can to promote responsible gambling. We have stepped up our own practices and are collaborating with our peers within the Betting and Gaming Council to continue to raise standards across the sector.
“We are also working hard to provide all the support we can to our employees and I would like to thank them for their ongoing commitment and support for each other during this difficult period. While the current disruption is truly exceptional, it underlines the importance of product and geographic diversification.
“As such, the strategic logic of our combination with The Stars Group remains compelling. Following approval of the deal by the Irish Competition and Consumer Protection Commission, we look forward to completing the transaction in Q2 upon receipt of outstanding shareholder and regulatory approvals.”
Flutter had already warned of a significant impact on business from COVID-19 restrictions in its March 16 market update. Underlining those earlier predictions, the firm told investors that US revenue is currently 8% lower year-on-year, with a decline in sports revenue of 46%.
US gaming revenue, however, is showing growth of circa 200%. “This reflects our expanded US gaming footprint and the continuation of some racing,” it noted, adding: “Our racing coverage is increasingly being televised on US mainstream channels, introducing our TVG product to a new cohort of potential customers.”
The company said that it is closely monitoring the outlook for re-commencement of sports and will provide further updates as and when appropriate.
On its workforce, it advised: “Since mid-March a number of national governments have announced schemes of financial support. We have concluded that for as long as possible, we will endeavor to fund the salaries of all of our employees through the group’s own financial resources. Should the duration of the crisis be such that not taking this support would jeopardize jobs, we will review our position.”