Flutter Entertainment underlines number 1 status in US market as H1 revenues climb

Image source: Flutter Entertainment

Flutter Entertainment Plc has underlined its claim to be the number 1 US sports betting operator in its H1 2021 interim results posted this week, citing the quality of its products and the extensive reach of the FanDuel brand.  

During the trading period the firm recorded group pro-forma revenues of $4.2bn, up 30% on corresponding H1 2020 results of $3.3bn.

Headline revenue growth was attributed to the ‘excellent online performance’ of its sports betting units, which generated combined revenues of $2.6bn (H1 2020: $1.7bn) as UK&IRE, Australia and US units were helped by a normalized sporting calendar.

Chief Executive Peter Jackson told investors: “In the US, we remain the number 1 online sports betting operator by some distance thanks to the quality of our products and the extensive reach of the FanDuel brand. 

“The customer economics we are seeing in the US bode very well for the future, with early FanDuel customers generating positive payback within the first 12 months of acquisition. 

“We remain absolutely focused on extending our sports product advantages and replicating our market share success in further states as they regulate. In gaming we see an opportunity to grow our market share and look forward to further enhancing our product offering in the coming months.” 

A significant portion of Flutter’s H1 update was centered on the US where the firm generated over $900m in revenues in H1, with Q2 revenue expected to hit the half billion dollar mark in a single quarter for the first time. 

The firm noted: “As a result, the revenue gap between our US business and its main competitors is continuing to widen, compounding the scale advantage we enjoy today. That scale advantage is an important element of our goal to achieve a US flywheel effect which sees us use our scale to accelerate the growth of our business. 

“The more we grow our customer base and revenues, the more we can invest in technology, products, promotions and pricing, thereby further enhancing our customer proposition. This, in turn, will help us to achieve better customer acquisition and retention than our competitors, increasing our scale and driving future growth. 

“Our success to date has been built upon two key competitive advantages, namely the quality of our product and the reach of the FanDuel brand.”

On customer base numbers, Flutter stated: “We are continuing to grow our customer base rapidly. In the last 12 months to 30 June, FanDuel acquired 1.7 million new sportsbook and gaming customers, equating to over three times the total existing base acquired up to that point. 

“Those existing players generated a positive contribution of $190m in the last 12 months. When combined with the $212m contribution from our daily fantasy and horse racing businesses, the total contribution of our US business pre-new player acquisition was $402m. 

“This was an increase of 138% on the prior comparable period. We were able to use this positive contribution to fund new player acquisition of $311m.” 

With heavy market emphasis currently being placed on the cost of customer acquisition, Flutter also sought to clarify its position on when its US investment will yield a profit. “It is important to note that we are not setting a target date for profitability – the date the business turns profitable remains an output for us,” it advised. 

“We remain entirely focused on growing the embedded value of the business by acquiring as many customers as we can for as long as we can generate attractive returns on that investment.” 

Flutter also underlined that its projection assumes that none of California, Florida or Texas launch online sports betting/gaming before 2024. 

“Should one of these large states regulate sooner, our level of investment in new player acquisition would be higher and profitability could therefore be delayed,” it said. “The projection also assumes no major change to the regulatory/tax landscape in current or prospective states.”