Table of Contents
Flutter Entertainment, the parent company of the FanDuel Group, released its Q1 trading update this week, stating that the company is off to a good start in 2021, with sales growth in both sports and gaming. During the quarter, the company’s US operations brought in nearly $400 million in sales.
The top line numbers show a welcome return to form. Sports income for the quarter was $1.3 billion (2020: $875.3 million), while gaming revenue was $822.2 million (2020: $695.2 million). The three-month total revenue was $2.1 billion (2020: $1.6 billion).
Global player base growth
Peter Jackson, the company’s CEO, explained: “We continued to significantly grow our global player base which in turn drove a 42 percent increase in our online revenue. At the same time, safer gambling continues to be a key priority across our markets with new measures introduced including our Gamban partnership in the US and development of the planned Affordability Triple Step in the UK.
“In our International division, the investment we are making to enhance player generosity and reinvigorate the PokerStars brand has seen an encouraging early response from customers. In the US, we continue to lead the market with revenue of almost $400m in the quarter. We believe that the quality and breadth of our offering remains a key differentiator for FanDuel sports and the key driver of our leadership position.”
In Q1, the firm’s US business had over 1.6 million average monthly players, making it twice the size of its Australian business and gaining ground on its International division, according to Jackson.
“We are continuing to consider our options with respect to a possible US listing of a small shareholding of FanDuel Group,” he said. “No decision has been made at this time and we will update the market as appropriate. As restrictions begin to ease and retail reopens across a number of markets, we remain confident that our diversified business leaves us well placed to deliver sustainable growth going forward.”
Michigan and Virginia launch
Flutter praised its rapid growth in the United States, citing launches in Michigan and Virginia during the quarter as well as “excellent ongoing momentum” in established states.
In the third quarter, sales in the United States increased by 135 percent to $396 million. FanDuel Group generated 91.6 percent of revenue (Full Year 2020: 89.1 percent), while FOX Bet (which includes PokerStars US) generated 8.4 percent. Customer acquisition continues to outperform expectations, according to the company, with over 900,000 new customers added during the quarter, aided by high levels of interaction around the Super Bowl and expansion into two new states.
Flutter noted: “Our total average monthly players grew by 132 percent to 1.6m. We recorded a 36 percent share of the online sportsbook market during Q1.4 Sports revenue increased 130 percent in the quarter, with sportsbook 227 percent higher and growth across our other sports products (TVG horse racing and daily fantasy sports) of 51 percent.
“Sportsbook stakes grew 235 percent, with our online sportsbook now available in 10 states compared to 4 in Q1 2020. Performance in these four more mature states remains very encouraging with staking growth of 93 percent in Q1.”
A 100 basis point increase in anticipated margin was offset by investment in consumer acquisition promotional activity, resulting in a net revenue margin that was broadly flat year over year. The competitive Michigan launch in January helped boost gaming revenue by 146 percent to $137 million.
Existing casino states are also doing well, with revenue growth of 89 percent in the quarter, according to the company. The market share of online gaming rose to 23 percent in Q1 2020, up from 20 percent in Q4 2020.