Flutter declares 2022 an ‘exceptional’ year for FanDuel as OSB market share surpasses 50%

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Flutter CEO Peter Jackson has claimed that FanDuel holds an “unparalleled number one position” in the US sports betting market, and reiterated confidence that 2023 will deliver full-year positive EBITDA contributions.

Jackson wrote to investors as the FanDuel parent company posted its 2022 preliminary results, in which it recorded group-wide revenues of $9.18bn, an increase of 27% year-over-year, as its US wing continues to go from strength to strength. Group-wide EBITDA also increased by 27%, as earnings reached $1.09bn in 2022. 

FanDuel coming out on top

FanDuel recorded over three million active monthly players during Q4, with over 50% of the US sports betting market share in states where it is live. Flutter states that its US brand is the ‘clear number one’, and reiterated its dominance by claiming it is the number one player in 15 of 18 sports betting markets.

Meanwhile, on the online casino side of things, Flutter noted that it has around 21% market share as it strives to improve its offering. 

On an earnings perspective, FanDuel recorded revenues of $3.2bn in 2022, up 67% YoY, whilst its EBITDA loss narrowed by 6% to $313m. However, the firm claims it was EBITDA positive in Q2 and Q4, apart from investments made into the launches of both Maryland and Ohio. 

FanDuel handled $23.55bn in sports wagers during 2022, up 109% from 2021, with a net revenue margin of 7.7%, taking revenues to $1.99bn. 

Flutter attributed this to the introduction of five new states in the year (NY, LO, WY, KS, MD) and the ‘excellent’ level of staking in those territories, but also said that existing states also delivered growth. 

Cost of sales was 620 basis points higher at 50.1% of revenue, driven by the tax rate in New York, something that FanDuel has pleaded with lawmakers to reduce. 

From an expenses perspective, marketing costs increased to $1.2bn in 2022, though this has reduced in terms of percentage of revenue by 11ppt as advertising necessity is reduced in existing states. 

On the group’s US performance, Jackson explained: “Flutter delivered a strong performance in 2022, continuing to execute on the strategic priorities we outlined last March. Growth in our recreational customer base delivered 2022 revenue growth of 27% and we ended the year with a record 12.1m average monthly players in Q4. 

“We have an unparalleled number-one position in the US where we continue to go from strength to strength. The combined power of the ‘FanDuel Advantage’ and the ‘Flutter Edge’ delivered our most successful launches to date in Maryland and Ohio. Leveraging our number one FanDuel brand we had a record Super Bowl and have acquired over 1.2m customers in 2023 so far.”

Online Casino ambitions

Despite its sports betting strength, Flutter stated it still has work to do on the online casino side of things, explaining that it has a strategy to improve the offering. 

FanDuel recently pleaded with legislators in New York to legalize online casino in the Empire State, aiming to replicate sports betting expansion, with NY being the biggest market in the US so far. 

On its online casino offering in the US, Flutter detailed: “We have a clear strategy to improve our igaming performance and grow our podium position, through increasing our focus on casino direct igaming customers and improving our product range and player experience. Although it is early days, we are pleased by the progress to date. 

“Q4 customer player days were 1.5 times the comparable period last year benefitting from the introduction of our FanDuel casino daily reward machine in Q3. Flutter exited the year with 63% growth in Q4 igaming AMPs and a 21% share of the Q4 igaming market, with FanDuel Casino sharing three percentage points higher than in Q4 2021.”

Potential US listing

Recent media reports have claimed that Flutter is seeking a public listing in the US and seemingly the group confirmed those reports in its preliminary results. 

It confirmed a consultation was underway with relevant stakeholders to explore the possibility of a US listing, noting that it may help with several strategic aims. 

A statement read: The Flutter Board has reached a preliminary view that an additional US listing of Flutter’s ordinary shares will yield a number of long-term strategic and capital market benefits. 

“As we outlined here, we have begun a consultation with our shareholders to determine whether to put forward a formal resolution for approval. We will announce the results of this consultation, once we have concluded an extensive program of engagement with our investors and stakeholders.”

Looking ahead to 2023, Flutter stated that the first eight weeks of the year have been ‘in line with expectations’ following a record launch in Ohio. Meanwhile, existing states have delivered ‘continued strong growth’ in the early stages of 2023. 

Pertinently, management doubled down on the firm’s ambitions to deliver an EBITDA-positive contribution in the US this year. Crucially, it stated that it remains “on track” to deliver on that aim. 

Jackson concluded his remarks to investors: “2023 is off to a pleasing start driven by positive momentum from the end of last year. With our combined US business on track to deliver a positive EBITDA for the full year 2023 for the first time, the Group is currently at an earnings’ transformation point and we look forward to delivering future growth and progressing further against Flutter’s strategic priorities in the coming year.”