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As legal online gambling in the US continues to thrive, one operator has mainly seen significant success. Dominating the US sports betting market with a 42% share, Flutter Entertainment’s FanDuel forecasts full-year profitability in 2023.
The company said it believes it can multiply its revenue in 2022. Specifically, by up to five times to nearly $15 billion over the long term, should the operator reach ‘maturity.’
FanDuel’s Chief Executive Amy Howe said of the revenue forecast at the company’s Capital Markets Day:
“We do believe that we’ll be on the high end of the range – five times.”
Howe also emphasized that FanDuel was “incredibly confident” of turning a profit for the first time in 2023.
Flutter confirms FanDuel is leading the US online gambling market
According to an investor presentation held on Nov. 16, the company said FanDuel now accounts for 42% of the US online sports betting market. It is nearly two times more than 24% of its nearest competitor, DraftKings.
Jointly owned by MGM Resorts and Entain, BetMGM holds the third-place position with 15% of the market share.
Flutter Entertainment CEO Peter Jackson noted that more states legalizing the market had helped the company’s most successful brand, FanDuel, mature.
Jackson told Yahoo Finance:
“The base is growing. It’s not just for new states that we’re adding — that’s growth and state penetration… revenue from each [new legalization] Cohort grows every year.
So the customers that we have are doing even more business with us and we are increasing the state penetration and putting new states on top.”
FanDuel’s revenue goes from $300 million to $3 billion in four years
When Flutter bought the majority stake in the operator, which was solely fantasy sports in 2018, FanDuel’s revenue stood at $300 million.
Last week, Flutter progressed its 2022 full-year revenue guidance for FanDuel to between $2.95 billion and $3.2 billion. The company expects the total US online gambling market to reach $40.5 billion by 2030 (from the current $9 billion).
That figure explains rising legalization, which FanDuel believes could go smoothly. The mobile sports betting industry has been live in 21 US states, including Washington DC.
Californians recently had their say and rejected propositions 26 and 27, which would have legalized sports betting in the state.
FanDuel expects sports betting to be legalized in states covering 80% of the US population by 2030. That figure is up from the current 35%.
Long-term targets for FanDuel are impressive
FanDuel is planning to reach a 12% gross win margin by 2025, which is more than the current 10%. FanDuel’s scale and competitive advantages can deliver long-term margins of 25%–30%, like other Flutter divisions.
Fanduel Chief Financial Officer David Jennings said:
“Given our expectation for the size of the market, we are clearly talking about very material levels of profitability, even in the context of Flutter’s large earnings base today.”
In 2022, FanDuel spent 29% of its revenue on promotions. With 80% targeting highly engaged customers to maximize ROI (return on investment).
