Flutter CEO: New Jersey blueprint proves there is money to be made in US
Flutter CEO hopes to silence cynics with $40m annual earnings contribution from The Garden State
Flutter Entertainment expects the state of New Jersey to contribute more than $40m in revenue by the end of the 2020 financial year.
The FTSE 100 operator published the estimate in a presentation on December 3 having sewn up a $4.2bn deal to purchase an additional 37.2% stake in its US-facing FanDuel business.
New Jersey is the first US state in which Flutter launched operations following the repeal of PASPA and is one of the few states where sports betting has been legal for three NFL seasons, having initially gone live in Q3 2018.
Jackson said: “This [figure] illustrates for some of the cynics out there wondering whether people would be able to make money in the US market, that you can, or certainly that we can with our model.”
Flutter CEO Peter Jackson
The ultra-competitive battle to win US market share has seen operators reinvest revenue into marketing as firms seek to grow brand awareness and ply bettors with welcome bonus offers.
Flutter CFO Jonathan Hill revealed the operator had spent beyond its initial marketing budget in New Jersey as the state has grown much faster than initial estimates – mirrored by growth at Flutter.
According to Hill, the $40m New Jersey revenue estimate will be used to fund expansion into additional US states, as and when they regulate.
One analyst asked Jackson how future revenue in single-vertical states would be impacted, considering there is no potential to cross-sell players between betting and gaming.
“Clearly the igaming cross-sell is important in New Jersey,” said Jackson. “We have been achieving higher levels of cross-sell than we would have anticipated when we look at our European businesses.
“In states where igaming isn’t available, we’ll have to make sure we construct products that play to what customers are looking for.
“We are one of the few operators that have a same-game parlay product available in the market, and more than half of our customers are using that product now.
“There are also lots of gamification products for sports betting and you will see us pushing those products harder in states where igaming isn’t allowed.
“We also hope more states will legalize igaming to drive additional revenues,” he added.
Flutter’s US division, which encompasses FanDuel, TVG, Fox Bet and PokerStars, reported an 82% jump in revenue for Q3 2020.