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Flutter, the parent company of FanDuel, considers itself the largest gambling company in the world. Its second-quarter earnings and guidance for the year help support that claim.
The company reported a 20% increase in second-quarter worldwide revenue of $3.6 billion compared to $3 billion a year ago. The jump in revenue resulted in a huge 364% increase in profit to $297 million. Last year the company only showed a $64 million profit during the same period.
The US was a major catalyst for the increase. Flutter’s US revenue was up 39% to $1.5 billion.
The strong quarter led Flutter (NYSE: FLUT) to raise guidance for the year. Overall, the company is expecting full-year revenue to be 20% greater than last year. Flutter also expects its profit to jump by 34% by the end of the year.
Flutter expects US revenue to increase by 3% to $6.2 billion and EBITDA to increase by 4% to $740 million for the year.
One reason for the revenue increase during the quarter was the number of players. During the second three months of the year, Flutter saw its Average Monthly Players (AMP) increase to 14.3 million, up 17% from last year.
The company announced that instead of adding a sports betting tax surcharge in certain markets, it would optimize and reduce marketing and promotional spending. Talk of a surcharge became moot shortly after Flutter’s quarterly earnings call.
Key Takeaways:
- Flutter’s revenue grew for the quarter while profit skyrocketed.
- The company increased its full-year financial guidance due to the strong quarter.
- The US accounts for nearly 50% of Flutter’s revenue.
- Flutter will reduce marketing spend instead of passing higher taxes onto consumers.
US iGaming Growth Outpaces Sportsbook
Flutter’s second-quarter revenue in the US was up 39% from a year ago. Online casino revenue increased 47% during the quarter while Flutter’s online sportsbook was up 41%.
The growth for iGaming was strong in both new and existing states. Revenue from iGaming was up 40% in states that launched before 2020. It was up 45% for the states that launched before 2022.
Overall, Flutter’s US online casino AMP was up 30% while revenue grew by 47% during the second quarter.
During the second quarter online slots were the fastest-growing segment for the iGaming division. Real money online slots saw 62% growth compared to the same period last year.
The company reached a milestone during the quarter. Flutter finished migrating FanDuel Casino to its own proprietary technology platform. This will make FanDuel more stable for players and give Flutter new opportunities to grow.
Operating with its own tech will make it easier for Flutter to increase how much in-house content it can offer in FanDuel Casino. Like most online casino operators, exclusive game content such as Fort Knox Cats is drawing new players and keeping existing players. The new FanDuel Reward Machine features also helped drive increased player engagement.
The proprietary tech platform will also make cross-promoting different products easier. This should have a long-term impact on revenue moving forward.
FanDuel Sportsbook Continues To Grow
While iGaming grew faster during the second quarter, the sportsbook division was as strong as ever. During the earnings period, sportsbook revenue grew 41% while AMP was up 30%.
Sports betting revenue for the quarter was boosted by NBA live betting, MLB prop betting and a new WNBA in-house product.
The company launched sports betting in North Carolina during the quarter. FanDuel had a 59% share of net gaming revenue in the state.
Two weeks ago, DraftKings floated the idea of adding a surcharge to sports wagers in Illinois to combat a tax increase. This has been a hot topic on earnings calls with other Illinois online sportsbook operators.
Flutter’s plan to combat higher tax rates is to reduce its marketing spend instead of passing the increase onto consumers. Shortly after Flutter concluded its earnings call, DraftKings decided not to move forward with the surcharge.
