Flutter breaks US triple-digit growth barrier in 2021 as revenue jumps 113%

Flutter Entertainment has reported a 113% year on year (YoY) increase in revenue derived from the US market during 2021, reaching $1.9bn on a pro forma constant currency (CC) basis.

Driving this continued increase was a 126% YoY spike in sports revenue and an 87% jump in igaming revenue during 2021 spurred by an average monthly player rise of 136%.

The inclusion of three new states, Michigan, West Virginia, and Connecticut, was also highlighted as a contributing factor for the jump in igaming revenue.

Despite the triple-digit percentage increase, the US division made an adjusted EBITDA loss of $333m during 2021.

As expected, US sports betting market leader FanDuel contributed a stellar 94% of the total US revenue figure, with player volumes increasing 71% to 1.6 million players over the 12-month period.

Flutter suggested the FanDuel brand “continues to resonate strongly” with US players, enjoying high levels of brand visibility outside of traditional seasonal peaks, and punctuated by a 47% revenue jump when compared to its US rival allowing it to gain “additional firepower” for investment.

A key element of this, during 2021 was the so-called ‘flywheel effect’ to accelerate growth through a combination of operating leverage, product enhancement, and increased scale.

Moving parts include the addition of some 100 staff members, the expansion of its same-game parlay product and better pricing accuracy on bets.

The Dublin-headquartered operator also confirmed that it had spent a whopping $1bn on sales and marketing exclusively in the US market during 2021, investments which the firm suggested had allowed it to tighten its stranglehold on the US market.

As justification for this stance, Flutter highlighted its 40% Q4 market share in sports betting and 20% market share in the US online gaming market, percentages which contributed to an overall Q4 US market share of 31%.

“This leading revenue share is moving FanDuel closer to a position of profitability,” Flutter said in a statement.

“Encouragingly as we expand into further new states, we are seeing faster adoption rates for online sports betting. This results in bigger initial losses in the early months post a state launch as we acquire more customers.

“However, when combined with better retention rates and our product mix advantages, we now expect new states to generate positive contribution after 12 to 24 months post launch, in contrast to the 18-30 month guidance we provided in 2019.

“Based on our current expectations relating to the timing of new state regulation in 2022 and 2023, we remain confident that our US business will be EBITDA profitable in 2023,” Flutter added, suggesting that this could be impacted by large state launches further down the road.

In respect of one of its newest operational states, New York, where FanDuel has steadily risen up the handle and revenue rankings, Flutter confirmed that the FanDuel sportsbook has acquired 400,000 new customers since its launch on January 8.

Flutter CEO Peter Jackson hailed 2021 as “another strong year” for Flutter in which it made good progress against its strategic objectives, while growing its recreational customer base.

“In the US, we delivered over $1.9bn in revenue, leveraging our differentiated product proposition to remain the number one sportsbook in the market with a 40% share,” Jackson explained.

“Despite our scale, we retain a challenger mindset; this year we launched a number of new features to our market-leading same game parlay product, maintaining our competitive advantage in sports.

Jackson continued: “I’m also pleased to see the progress on our path towards profitability; FanDuel sportsbook and gaming business delivered positive contribution in 2021 for the first time, a significant milestone for the brand.

“Overall, I am pleased with the progress we have made during 2021 and believe Flutter is exceptionally well positioned for future growth,” he added.

At a wider group level, Flutter Entertainment reported a 17% year-on-year (YoY) increase in pro forma revenue to £6bn on a CC basis for the full year 2021.

The FTSE 100 operator revealed sports betting revenue growth of 27% YoY to £3.7bn and more modest igaming YoY growth of 4% to £2.2bn.

Group EBITDA fell by 18% YoY to £1bn, while group EBITDA excluding Flutter’s US operations slid 10% on CC basis to £1.2bn.

Flutter’s shares on the London Stock Exchange plunged 13% to £93 in early trading, wiping around £2bn off the value of the business.