During the Flutter Q2 earnings call, company CEO Peter Jackson did not hold back his feelings about Illinois lawmakers both upping the tax rate and introducing a tiered tax structure with a heavier tax burden for the most successful operators.
Flutter CEO takes shots at Illinois lawmakers and sweeps sportsbooks
“I do think that introducing a graduated tax system that punishes those who have invested the most to grow their businesses is wrong,” he said. I think it will drive customers to offshore operators or potentially to onshore operators who are offering unregulated and untaxed prop parlays under the guise of sweepstakes.”
While Jackson managed to take swipes at both lawmakers and the growing number of sweeps operators, the company will not follow in DraftKings’s footsteps in terms of how to handle the economic stress of high-tax markets.
“We have no plans to introduce a surcharge for winners,” Jackson said.
Instead, FanDuel plans to mitigate 50% on the new tax burden by curbing marketing spend. He did note, however, that in similar cases of high-tax markets, smaller operators have been forced to adjust prices, leading to new customers for market leaders. With that in mind, FanDuel expects to be harmed less than some competitors now that the change is in effect.
FanDuel says it has 59% of North Carolina sports betting market
Even with the new climate in Illinois, the tone of the earnings report was largely positive. FanDuel reportedly has 59% of the newly launched North Carolina market, helping to boost national GGR market share for sports betting to 47%. The company also reported a 25% share of the online casino market in the U.S. The company also updated 2024 guidance 3% to $6.2 billion.
Flutter reported Q2 revenue of $3.6 billion and adjusted EBITDA of $738 million. Those two numbers are up 20% and 17%, respectively over the same period in 2023.
The U.S. was responsible for most of the success and Jackson credited FanDuel Casino’s move to a proprietary platform and strong performance in legacy states as two of the reasons for the strong performance. He also said the sportsbook is making major strides in MLB parlays, an area he cited as a weakness in past years. He also acknowledged that CPA costs for the company are on the decline in North America.
Jackson has questions about GG Poker’s WSOP acquisition
On the iGaming front, Jackson addressed the big move from PokerStars’s largest competitor, GG Poker, acquiring the WSOP. He said the company is still well positioned in the U.S. and cast some doubt on how the deal will work out.
“GG Poker operates in a lot of markets that we wouldn’t be prepared to operate in. So I think there’s some interesting questions there for some of those people involved,” he said of the deal.
