FanDuel Q2 report reaffirms US market dominance
FanDuel has more sports betting market share by gross gaming revenue in operating states than all its competitors combined, according to a report released Friday from its parent company, Flutter Entertainment.
US market leader FanDuel has 51% GGR market share across its 15 operating online sports betting markets, the highlight of an impressive earnings report announced Friday. It has more than double the market share of its two closest competitors, DraftKings and BetMGM.
“We are particularly pleased with momentum in the US where we extended our leadership in online sports betting with FanDuel claiming a 51% share of the market and number one position in 13 of 15 states, helping contribute to positive earnings in Q2,” said Flutter CEO Peter Jackson as part of a report announcing the European operators first half financials. “We remain firmly on the path to profitability in 2023, driven by our compelling customer economics and disciplined investment.”
FanDuel, DraftKings, BetMGM and Caesars, which have combined for more than 80% handle market share across the US, have each spent hundreds of millions of dollars in advertising, free bets and other promotions over the past few years. Despite the spending, Flutter reported $22m in positive EBITDA contribution from FanDuel in Q2 2022.
FanDuel is the first major US sports betting and online casino gaming operator to report a profitable quarter. DraftKings, BetMGM and Caesars have each targeted Q4 2023 as the first profitable quarter for their respective online gaming divisions.
However, the company expects to lose roughly $300m during the second half of 2022, largely from marketing and promotional expenditures, including those in new state market openings. The company projected its online sportsbook will go live in Kansas in the fourth quarter of 2022, and could also launch in Massachusetts and Maryland before year’s end.
FanDuel is expected to earn an online sports betting license in Ohio, which will launch online sports betting on Jan. 1, 2023. The company has also spent millions of dollars on an online sports betting ballot measure in California but it is too early to tell if the referendum will pass or when legal sports betting could begin if approved by voters.
FanDuel projects to be profitable for full year 2023. It would be the first US sports betting operator to report a yearly profit.
Along with rival DraftKings, FanDuel was one of two major US daily fantasy sports operators that pivoted to sports betting after the Supreme Court struck down the federal wagering ban in May 2018. Flutter, a European gaming giant that owns Paddy Power and Betfair, acquired FanDuel shortly after the court’s ruling, using it as the focal point of its American expansion.
FanDuel is live in:
Across these 15 states, it has more gross gaming revenue market share than all other sportsbooks combined
— Ryan Butler (@ButlerBets) August 12, 2022
FanDuel made up less than 10% of Flutter’s revenue in 2019. As of the first half of 2022, it makes up more than 33%.
Flutter attributed FanDuel’s success to its superior product offerings, which other US sports betting stakeholders have increasingly said will be the differentiating factor in market share, even ahead of the hundreds of millions of dollars spent in player acquisition costs.
Company officials also cited “customer acquisition practices,” such as high-profile partnerships with Pat McAfee and Turner Media, as well as “operational execution” as other keys to the company’s revenue totals.
The company announced 2.2 million average monthly FanDuel sports bettors during H1 2022, a nearly 50% year-over-year increase from the first half of 2021. In more mature markets such as New Jersey, Pennsylvania and West Virginia that launched in 2018, FanDuel estimates more than 60% of its DFS players have also placed a bet with the company’s sportsbook.
FanDuel reported similar DFS cross-sell percentages in New York, the nation’s largest sports betting market by handle. FanDuel has captured majority gross gaming revenue share in the nine-operator new York market that includes its three nearest rivals.
More than 80% of FanDuel bettors have placed a bet with a “higher margin parlay product” such as the company’s Same Game Parlay+. The growth of single-game parlays have also been cited as a major revenue driver for FanDuel and other sportsbooks.