Flutter growth spurred by FanDuel US products

Flutter Entertainment Reports Impressive Revenue Growth Driven by US Sports Betting and iCasino Expansion

Flutter Entertainment’s recent earnings call unveiled a robust 14% increase in fourth-quarter revenue, with a notable 19% growth for the entire fiscal year. This impressive performance is primarily attributed to the significant rise in US sports betting and iCasino activities, signaling a dynamic shift in the gambling landscape.

During the quarter, FanDuel, Flutter’s flagship brand in the US, experienced a 7% growth in average monthly players, culminating in a 13% increase for the fiscal year. Executives expressed enthusiasm over Flutter’s worldwide growth trajectory during the earnings call held on March 4.

The company reported a remarkable fourth-quarter profit of $156 million (£122 million/€147 million) and an annual profit of $162 million, both reflecting over 100% growth compared to the previous year. Furthermore, Flutter is currently executing a share repurchase program, planning to buy back $1 billion in stock by 2025, indicating strong financial health and investor confidence.

These results aligned well with pre-established guidance, showcasing the company’s strategic direction. Among the key highlights was the success of the innovative “Your Way” parlay betting options, which are currently in beta testing, alongside the positive momentum from the ongoing stock buyback program.

Turning to the US market, CEO Peter Jackson announced plans for FanDuel to prepare for a late-year launch in Missouri. The company is actively seeking ways to navigate the substantial tax increase enacted in Illinois last year, demonstrating its commitment to optimizing operational efficiency amidst regulatory challenges.

While the legal gambling environment in the US faces competition from unregulated sweepstakes platforms and rising prediction markets, Jackson described the latter as “an interesting opportunity,” acknowledging their limitations compared to traditional sportsbooks, which offer a broader array of betting options.

FanDuel Emerges as the Leader in US iGaming Market

Prediction markets, which allow betting on contracts related to sports and political events, continue to grow in popularity. Recent entrants like Kalshi and Polymarket have started offering sports-related contracts, raising concerns in the gambling industry regarding the absence of responsible gambling regulations and potential risks to tribal sovereignty. These markets have processed hundreds of millions in bets, diverting revenue from conventional gambling platforms.

Amidst this backdrop, Jackson enthusiastically announced that FanDuel has ascended to become the market leader in both sports betting and iGaming across the United States. This growth occurred despite a challenging NFL season — often termed “customer-friendly” within industry circles — characterized by some of the toughest outcomes seen in two decades. Nevertheless, FanDuel achieved a structural gross revenue margin growth of 14.5% and a staggering 43% increase in iGaming revenue. The Super Bowl’s success at the start of the year further invigorated overall performance.

Aglimmer of Hope for New Markets

Currently, seven states in the US permit legal iGaming, with Flutter operating in five. However, legislative efforts in states like Indiana, Virginia, and Wyoming to advance iCasino laws have stalled, with Maryland’s progression also impeded. Despite these setbacks, Jackson remains optimistic, stating, “maybe we get one new iGaming state… We remain confident that can happen.”

Legislative discussions are ongoing in Illinois and New York regarding online gambling bills; however, movement has yet to gain momentum. Flutter is anticipating a significant investment of approximately $80 million in preparation for the Missouri launch projected for the fourth quarter, alongside an additional $10 million planned for a 2026 launch in Alberta. While these expenditures may contribute to short-term losses, they signify Flutter’s long-term strategy to enhance its market position.

Global Innovation Shaping the Future of Gambling

The tax increases in Illinois escalated FanDuel’s obligations from 15% to 40% on adjusted gross revenue (AGR). Executives noted that this tax hike is anticipated to have a $50 million impact on the company’s performance for 2024; however, they expressed confidence in mitigating approximately 50% of this burden in the forthcoming year, though the specifics remain undisclosed.

Moreover, globally, executives pointed to significant drivers in the iGaming sector, including the strategic acquisition of MaxBet and ongoing innovations within the UK and Ireland markets. Flutter leveraged its competitive advantages, branded as the “Flutter Edge,” to consolidate investments across Italy, India, Turkey, Georgia, and Brazil. While some market contractions were noted in Australia, promising player trends were highlighted, indicating resilience in customer engagement.

NSX Acquisition on Track for Conclusion Next Quarter

In Latin America, with the launch of legal sports betting in Brazil on January 1, Flutter’s focus remains keenly on mergers and acquisitions that align with its growth strategy. Jackson emphasized ongoing investments in organic search across various international markets as the company anticipates closing the NSX acquisition in Brazil by the second quarter. This investment is part of Flutter’s broader strategy, which seeks to integrate “local heroes,” identified as promising local enterprises for acquisition. Once onboarded, Flutter provides critical support while respecting the local market expertise of these businesses.

With this strategic acquisition, Flutter aims to capture an impressive 11% share of the burgeoning Brazilian market, positioning itself strongly as this promising region continues to evolve in the global gambling landscape.