Fanduel Starts Off Strong in 2023, Flutter Shareholders Show Approval for US IPO
Giant in the US online sports betting scene, FanDuel is shining this year. Its parent company, Flutter Entertainment (OTC: PDYPY), is reaping solid financial returns thanks to FanDuel.
Last Thursday, Flutter gave investors a sneak peek at its 2022 financials. They highlighted that if not for investments made to kick off mobile sports wagering in Maryland and Ohio, FanDuel would've been profitable in the second and fourth quarters of last year.
For cost-conscious investors who care about new market entries and their impact on operators' profitability, the upside is clear: these investments are paying off for FanDuel. Maryland and Ohio are reportedly its most successful launches so far, according to Flutter. Online sports betting went live in Ohio in January, and data shows it's been a massive hit there.
Analyst Lara Martinez of Third Bridge commented that FanDuel could potentially secure a spot among the top two operators if any states legalize sports betting. She credits FanDuel's substantial brand recognition and advanced technology for this potential.
Third Bridge predicts FanDuel's US market share could reach 55% over the next five to eight years. They see Georgia as the next big player in state legalization, with the potential to become a $250 million sports betting market in the long run. However, a recent legislative attempt was unsuccessful, suggesting that sports betting approval in Georgia might be tough in 2023.
Flutter Confirms FanDuel's 2023 Profitability
With Maryland and Ohio powering its way, Flutter believes FanDuel will likely achieve profitability annually this year.
“The US is showing consistent growth across existing states and from successful launches in Maryland and Ohio. The US is remained on track to be EBITDA positive for the full year 2023,” noted Flutter.
FanDuel's path to profitability, declining spending, and increasing market share in the US could be one reason driving Flutter to consider listing its shares in the US—something they mentioned last month they are considering.
“We recently announced that we believe an additional US listing of Flutter’s ordinary shares will bring numerous long-term strategic and capital market benefits,” said Flutter CEO Peter Jackson in a statement. “We have started a detailed discussion with our shareholders and initial feedback has been positive. We look forward to ongoing engagement with investors and stakeholders on this matter and we will announce the results of this engagement in due course.”
iGaming Needs Boost
If there's a weak spot in Flutter/FanDuel's US strategy, it's probably iGaming. BetMGM dominates online casino market share, and as analyst Lara Martinez notes, many bettors don't automatically link FanDuel with internet casinos.
“This is a gap they need to fill, as it'll be crucial for Flutter's profitability in the US,” according to the analyst.
For any operator, including FanDuel, online casinos are an integral part of broader digital gaming profitability plans. That's because this segment offers superior growth opportunities and margins compared to sports betting.
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