Flutter CEO lauds FanDuel dominance in New York

Flutter Entertainment CEO Peter Jackson has welcomed the performance of the FanDuel sportsbook in New York, the positive results of which have seen Flutter’s US division report 45% year-on-year revenue growth.

In its group results for Q1 2022, FanDuel’s parent company reported year-on-year growth of 6%, spurred on by gains in the US and Australian markets.

At a US level, FanDuel continued its stellar performance, generating revenue of $574m and 2.4 million customers during Q1, a market share of 37%.

During the quarter, FanDuel acquired 1.3 million new customers, buoyed by launches in New York and Louisiana, as well as strong campaigns across Super Bowl LVI and March Madness, twin factors which led to FanDuel being the most downloaded sportsbook app across both events.

Speaking as part of the Q1 2022 results call, Jackson lauded New York in particular as “exceeding expectations” following the launch there in January, which saw the sportsbook shrug off early competition from Caesars Entertainment to assume a dominant position in the market.

“From our perspective, we’ve seen the fastest penetration of our DFS base than we’ve seen in any other state, which means that the CPAs have been very attractive for us,” Jackson said.

“While we’re pleased with that, it’s clear that not many other operators have the same benefits, and while they’ve enjoyed the benefits and all the initial investment at the beginning of the launch, I imagine that will peter out with the current tax levels and the returns that most operators are likely to generate in that market,” he added.

These sentiments were echoed by Flutter CFO Jonathan Hill, who noted the Empire State’s crippling 51% tax rate on sports betting as a mitigating factor in the potential contraction of the New York market.

“All of the operators have certainly pulled back from some of the initial signup offers and some of the generosity as have we. We’ve pulled back on our generosity levels in that market because there are better markets from a payback perspective for us to invest in the states, and newer markets where the paybacks are longer,” Hill added.

New York legislators Joseph P Addabbo Jr and J Gary Pretlow have previously tabled legislation that potentially could have seen this taxation rate reduced to a much more palatable 25%, however these bills failed to gain the traction required during budget negotiations in the Empire State.

For his part, Jackson refused to be drawn in on whether he supported a reduced tax rate but suggested this would ultimately be of benefit to both FanDuel and New York itself in the long run.

“We’re not going to speculate on the path that New York might take, but we do know that in the states which have lower level of taxes, we know that you actually end up generating higher tax receipts to the state,” Jackson said.

One of these new markets where FanDuel is expanding is Ontario, which has a more favorable 20% tax rate. Recent data from investment bank Morgan Stanley shows that FanDuel is engaged in a three-way tussle with theScore and bet365 for dominance in Ontario.

Jackson, however, said it was too early to suggest that FanDuel would enjoy the same leading position in the Canadian province that it does in the US market.

“We’ll look forward to seeing how we do when the market has a few more entrants in it and things get up to full speed, some players haven’t even launched,” he explained.

“I believe the Ontario regulator might be trying to phase the launch to make sure they don’t have a disorderly market by having everybody launch at the same time.

“I think we might let the market mature a little before we release details of our position in the market, but it’s a very large market and we’re very excited about it,” Jackson concluded.