FanDuel is the first US sports betting operator to report a profitable quarter.
The majority owner of FanDuel Group, Flutter Entertainment, made the announcement during the company’s earnings call on Aug. 12.
Flutter reported that FanDuel closed the first quarter of 2022 with $22 million “in earnings before interest, taxes, depreciation and amortization from its sports betting and iGaming operations,” otherwise known by the acronym EBITDA.
FanDuel continues to reap the benefits as a US online casino and online sportsbook operator. The company’s 2022 Q2 report also shares plans to become fully profitable in 2023.
Why FanDuel is No. 1 in US online gambling market
“We are particularly pleased with (the) momentum in the US where we extended our leadership in online sports betting, with FanDuel claiming a 51% share of the market and number one position in 13 of 15 states, helping contribute to positive earnings in Q2.”
FanDuel accounts for 33% of Flutter’s revenue, compared to only 10% in the first half of 2019. The brand acquired more than 1 million new players in the year’s first three months. When New York’s sports betting market launched in January 2022, the company acquired 1.2 million new customers in the first quarter of the year and about 250,000 new customers in Q2.
According to Flutter, FanDuel has converted over 60% of its fantasy sports players in New York, New Jersey, Pennsylvania, Indiana, Iowa and West Virginia into sports bettors.
While other operators seemed to have slowed down in the first six months of the year, FanDuel Sportsbook took a different approach, Jackson said on Friday’s call:
“We saw lots of opportunities, so we pushed hard. We [didn’t] feel constrained by spend because [we had budgeted] for states that haven’t launched yet.”
“The major point is that we’ve maintained our disciplined approach to customer acquisition. We’ve always been focused on looking at our cost to lifetime value. While other people were pulling back from the market because we saw that lifetime value was being maintained.”
Established presence in US, plus less marketing costs
One-third of all new customers acquired in the year’s first half were from US states that launched before 2021, and FanDuel’s cost per player acquisition is under $300, the company said.
Many online sports betting operators had recently cut back on marketing and promotional costs, as no new states launched online gambling in the second quarter of 2022.
Marketing as a percentage of revenue was reduced by 6% due to maturing business in existing states and “disciplined investment,” Flutter said. Therefore, Flutter told investors to expect $300 million in losses to round out 2022.
FanDuel remains Flutter’s No. 1 brand
FanDuel is Flutter’s most popular product, given that the platform offers online casino, sports betting and daily fantasy sports. Flutter also stands behind recognizable brands Betfair, PokerStars, Fox Bet, TVG and Adjarabet.
FanDuel online sportsbook first launched in the US in September 2018 in New Jersey. It is live in these states:
- New Jersey
- New York
- West Virginia
FanDuel online casino games are available in five states so far.