Flutter leadership celebrates second-quarter results
“I’m delighted to report a strong set of results for the quarter,” began Flutter Entertainment CEO Peter Jackson, kicking off Thursday’s earnings call. “Our performance in Q2 positions us strongly to deliver on our objectives.”
Jackson said he was nonplussed by Illinois’s new handle tax, against which FanDuel is incepting a bet surcharge beginning 1 September. He added, “We’re confident that Illinois is an outlier… We’re seriously disappointed that this tax came into play.”
Jackson opined that the handle tax was good neither for customers nor the integrity of sports. Asked if the FanDuel surcharge might spread to other states, he replied, “we don’t expect this to happen anywhere else.”
Anticipating questions about the incursion of prediction markets into sports betting, Jackson stressed Flutter’s 20 years of operating event contracts through Betfair. He said Flutter was shaping potential US strategies.
Queried further on the matter, Jackson said, “it’s clearly a fast-moving space,” but Flutter’s Betfair experience would be helpful. He wouldn’t elaborate further, beyond saying the company was monitoring developments.
Turning to overseas jurisdictions, Jackson said Flutter had achieved 30% market share in Italy and “SNAI integration plans are well underway.” As for Brazil, “we retain a strong conviction that the market will be very significant.”
Returning to the United States, Jackson disclosed a 17% boost in revenue, FanDuel’s highest gross-revenue margin yet. Players increased 32% and FanDuel Rewards was launched, as was “a record volume of new titles.”
NBA betting activity was described as “encouraging,” including the addition of single-game parlays (SGPs). The latter were also expanded to tennis in time for Wimbledon.
A new SGP product in Italy helped drive a 15% increase in international revenue.
Previewing the third quarter, Jackson announced the July launch of Flutter’s first bingo network, a joint venture with Sisal. “The PokerStars integration is another strong pillar of the program,” he added.
Chief Financial Officer Rob Coldrake chimed in to say that he had “even more conviction” that Flutter would identify and execute US$300 million in savings by 2027. He said Flutter closed the quarter with US$1.7 billion in cash and US$8.5 billion in debt. Coldrake also maintained a long-term goal of returning US$5 billion to shareholders over a three- to four-year period.
Because of the absence of new state launches, particularly 2024’s in North Carolina, marketing expenses were down 4%. Coldrake said some spending was being deferred until the NFL and NBA seasons, “broadly $20 million to $25 million.”
Jackson wouldn’t be drawn out on the prospects for sports betting in California. “We have a lot of respect for the tribes,” he replied, saying he would listen to their concerns.
Where might igaming go from here? Its penetration in the US, Jackson said, “has still got a long way to go.” FanDuel was, he said, looking to obtain direct casino customers, rather than convert sports book users.
Told that FanDuel had one of the best igaming market positions, Jackson replied starchily, “we’re the market leader for igaming, because we have continuously executed on our strategy.” He cited the rewards club, jackpots, and new game titles as evidence of this. “But we’re still in the very early days.”
Referring to the cost of outsourcing game products, Jackson continued, “All of our content for FanDuel is coming from third parties,” some of it exclusive to Flutter. “In time,” in-house products would arrive to alleviate those licensing costs.
Having failed to land the Italian lottery, Coldrake denied any such aspirations elsewhere. “We always said that we thought this was a unique opportunity” and that Flutter wasn’t necessarily interested in other lottery contracts.
Although it was relatively early for the Brazilian market, Jackson was asked if Flutter had aspirations elsewhere in Latin or South America. “We think about many markets where we’re not,” he replied. Jackson said there were interesting opportunities, but that Flutter needed to invest in its existing business.
Coldrake added, “Southern Europe and Africa are really outperforming. It goes from strength to strength.” Turkey, he continued, was “performing phenomenally well.” Australia, however, had “some challenges around horse racing.”
Lastly, Coldrake was pressed on FanDuel’s allotment of US$70 million to launch sports betting in Missouri later this year, double what his competitors were said to be allocating. “We’ve not changed our approach,” he replied. “We’ve consistently held a number for Missouri.”
“As we move into the second half of the year, we’re excited with what we see,” Jackson said in conclusion.
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David McKee is an award-winning journalist who has three decades of experience covering the gaming industry.
