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Flutter Entertainment (NYSE: FLUT), the parent company of FanDuel, updated investors on its current status and plans for the future of the company. The near and long-term future for the online casino and sportsbook operator looks bright in the US and around the world.
On Tuesday morning, Flutter announced it would buy back up to $5 billion worth of stock over the next few years. Shares of Flutter were up more than 5% on the day. Year-to-date, shares of Flutter are up more than 37%.
Flutter also gave investors mid-term guidance on its plans for 2027. The company is projecting a $2.5 billion profit this year. The company expects profit to be at least twice as much in 2027.
The company now projects the US online casino and sports betting market will reach $63 billion. This projection is 1.5 times higher than Flutter’s most recent outlook.
The internal projection counts on more states legalizing online casinos and sportsbooks by 2027. This could be a bit optimistic as states have been slow to legalize online casinos and sportsbooks.
In a statement to investors, Flutter Entertainment CEO Peter Jackson shared some of his positivity on the future of the company saying:
“With our unmatched scale, diversification, and our global differentiator, The Flutter Edge, we have clear sustainable global advantages that will continue to drive sustainable growth and power our financial model with operating leverage building over time.”
Flutter currently has 32 million active users generating approximately $14 billion for the company this year. As of June 1, Flutter’s revenue is approximately three times more than its closest competitor, according to Flutter’s Investor Day, Sept. 2024 presentation.
Key takeaways
- Flutter announces $5 billion stock buyback program.
- The company expects profit to double by 2027.
- Flutter is the number one iGaming brand in the US based on Gross Gaming Revenue (GGR).
- Technology and data science investments are keys to Flutter’s continued future growth.
Flutter’s online casino growth
Flutter is the number one online sports betting and online casino operator based on revenue over the past twelve months ending in June 2024. This is quite the jump from being third in 2022.
The company isn’t resting on its laurels. Flutter’s goal is to hold onto the number one spot while continuing to grow.
Using internal projections, Flutter is projecting it will have a 25% share of the online casino market by 2030. While this is possible, Chris Krafcik from research and consulting firm Eilers & Krejcik Gaming thinks it could be optimistic based on the current trajectory of new states with legal online casinos in the US.
Skepticism aside, Flutter continues to invest in both forward-facing and back-end technology to increase revenue. Flutter has been successful using AI in Australia and expects the US to follow.
This could help reduce its spending on customer acquisition and retention. It could also improve the user experience in Fanduel Casino.
Could AI be a win-win for Flutter and its players?
During the presentation to investors, the company noted that the US still has a way to go to maximize its AI the way it does in Australia. Flutter isn’t concerned with how AI is impacting US operations.
AI improves over time as it learns the habits and preferences of all Fanduel Casino players. Since the technology is still new, it’s still learning customer preferences. The longer it’s in use, the more it will learn about Fanduel casino players.
This could provide a win-win situation for players and Flutter.
Flutter’s AI acts similarly to YouTube and TikTok algorithms. Those apps feed users video content based on their previous interactions with the apps.
While Flutter’s AI learns more about the players, it will offer promotions to focus on the types of bets and games played. Marketing games and promotions that AI thinks players will like should lead players to have a better Fanduel Casino experience while increasing Flutter’s revenue.
Investing in Fanduel Casino
While Flutter is investing heavily in data science and AI, it’s also improving its technology for players.
The current Fanduel casino technology can handle many players while operating smoothly with little delay.
Flutter continuously tracks Fanduel Casino players to see which content they prefer.
62% of FanDuel Casino players prefer games they are familiar with. While the majority want to play games they know just over a third of players (36%) want to play new games in Fanduel Casino.
Exclusive online slots and other games are as popular with Fanduel as they are in other online casinos. Just over half of its players (53%) also want to play games exclusive to Fanduel Casino.
While Flutter cross-promotes its casino and sportsbook operations, only 10% of casino players want to play games branded by sports leagues like the NFL or NBA. Only 6% want to play team-themed games in Fanduel Casino.
