Flutter CEO Peter Jackson claimed that FanDuel is the “unparalleled number 1 position” in US sports betting and reiterated his confidence that 2023 would deliver positive EBITDA contributions for full-years.
Jackson wrote to investors after FanDuel’s 2022 preliminary Results were posted. In which the company recorded $9.18bn in group revenues, an increase of 27% over last year, as its US wing continues its growth. EBITDA for the entire group increased 27% to $1.09bn, with earnings in 2022.
FanDuel wins the top spot
FanDuel had over 3 million monthly active users in Q4 and held more than 50% of the US betting market. Flutter stated that the US brand is the “clear number one” and claimed it was the number one in all of the 18 sports betting markets.
Flutter also noted that the online casino market is currently at 21%. It continues to work on improving its offerings.
FanDuel’s earnings were up 67% YoY and saw revenues of $3.2bn by 2022. However, its EBITDA loss decreased by 6% to $313m. The firm claims that it was EBITDA-positive in Q2 and 4 except for investments made into both Maryland and Ohio’s launches.
FanDuel had $23.55bn worth of sports wagers in 2022, an increase of 109% over 2021. The net revenue margin was 7.7%, bringing revenues to $1.99bn.
Flutter attributed the growth to five new states (NY, LO. WY. KS, MD), and the ‘excellent level of staking. However, Flutter also stated that the existing states had also contributed to this success.
The cost of sales was 620bps higher at 50.1% revenue. This is due to the New York tax rate, which FanDuel has asked lawmakers to lower.
Marketing costs rose to $1.2bn in 2022. However, this percentage has decreased by 11ppt because advertising necessity is decreasing in the existing states.
Jackson spoke out about the US performance of the group. Jackson stated that Flutter had a strong performance in 2022 and continued to implement the strategic priorities set forth last March. Our recreational customer base grew 27%, resulting in 2022 revenue growth at 27%. We also ended the year with record 12.1m monthly players in Q4.
“We are proud to hold an unrivalled number-one spot in the US, and we will continue to grow from strength to strength. Our most successful launches in Maryland and Ohio were made possible by the combined power of the FanDuel Advantage and the Flutter Edge. We had a record Super Bowl, and we have so far acquired more than 1.2 million customers through FanDuel’s number one brand.
Online Casino ambitions
Flutter acknowledged its strength in sports betting, but said it still needs to work on the online casino aspect of things. He explained that the company has a strategy to improve it.
FanDuel has recently asked New York legislators to allow online casinos in the Empire State. This is in an effort to duplicate the expansion of sports betting in NY, which is the largest market in the US.
Flutter stated that it has a clear strategy for improving its igaming performance in the US by increasing our focus on direct casino igaming customers, and improving our product and player experience. We are happy with the progress made so far, even though it is still early.
Q4 customer player days were 1.5x the same period last year, thanks to the introduction of the FanDuel daily reward machine in Q3. Flutter ended the year with 63% growth of Q4 Igaming AMPs, and 21% share in the Q4 Igaming Market. FanDuel Casino shared three percentage points more than in Q4 2021.
Potential US listing
Recent media reports claim that Flutter seeks a US public listing. The preliminary results seem to confirm these reports.
It confirmed that a consultation was ongoing with the relevant stakeholders to examine the possibility of a US listed, noting that this may help with several strategic goals.
A statement stated: “The Flutter Board has reached a preliminary opinion that additional US listing for Flutter’s ordinary share will yield a number long-term strategic, and capital market benefits.
“As we have described here, we have started a consultation to determine if we should put forward a formal resolution to approval. Once we have completed an extensive engagement program with our stakeholders and investors, we will release the results of this consultation.”
Flutter said that the first eight weeks in 2023 were ‘in line’ with expectations following the record-breaking launch of Ohio. In the meantime, states that have already experienced strong growth in the first stages of 2023 have shown ‘continued solid growth’.
Management has increased its ambitions to make an EBITDA positive contribution in the US this fiscal year. It also stated that the firm is “on track” for achieving that goal.
Jackson’s remarks to investors concluded with the following: “2023 is off on a pleasant start, driven by positive momentum since last year. The Group is on track to deliver positive EBITDA in 2023, with the combined US business. We look forward to future growth and advancing against Flutter’s strategic priorities.
