Flutter’s First Half 2023 Report Highlights FanDuel’s Profitability

Flutter's First Half 2023 Report Highlights FanDuel's Profitability

Flutter Entertainment, the world’s largest online gambling operator, has unveiled its financial results for the first half of the year (H1), demonstrating strong growth and profitability.

The Irish gambling conglomerate posted $6.25 billion in revenue for the first six months of this year, up 42% on the first half of 2022.

A significant highlight from the report is the profitability of its U.S. subsidiary, FanDuel. Flutter bought out FanDuel in 2018, and the brand has since soared to the most popular spot in most legal state markets across the U.S.

The one-time daily fantasy sports-based operator made $100 million in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) across H1 2023, and achieved 47% market share.

“The first half of 2023 marks a pivotal moment for the Group, with our U.S. business now at a profitability inflection point, helping transform the earnings profile of the Group and significantly enhance our financial flexibility,” said Flutter CEO Peter Jackson in the company earnings release.

Navigating Challenges on Top

While FanDuel’s journey to profitability is positive for Flutter, the brand has faced its share of challenges.

The U.S. market is teeming with competition, and even though FanDuel has managed to carve out a significant market share, it has recently been feeling the heat from competitors.

Flutter’s report indicates that FanDuel’s market share has been under pressure towards the end of H1 2023. In the nation’s largest online sports betting market, New York, DraftKings recently overtook FanDuel in monthly handle for the first time.

U.S bookmakers also took a bit of a hammering in June, with upset championship wins for the NBA’s Denver Nuggets and the NHL’s Las Vegas Golden Knights forcing millions in payouts. And that was during a traditionally quieter time of year for sportsbooks.

The upcoming launch of Penn Entertainment-backed ESPN sportsbook might also have FanDuel looking over its shoulder heading into the next half. With ESPN’s internationally known branding ready to launch in 14 legal states, the media giant’s sportsbook could be a big new competitor after replacing Barstool Sportsbook.

During H1, Flutter also announced the closure of another sportsbook it owned, FOX Bet. Flutter inherited a contract with Fox to operate the online sportsbook when it took over PokerStars creators The Stars Group in 2020.

Fox has spent the intervening years arguing that Flutter underinvested in FOX Bet and focused on FanDuel, until eventually Flutter’s hand was forced to close FOX Bet with the contract expiring this month.

Despite those challenges, FanDuel reported a 40% increase in its average monthly players in the first half of the year, helping it reach $1.24 billion in revenue. Flutter’s overall revenue surged to $6.65 billion, a 33% rise compared to the same period last year.

Ongoing Process for U.S. Listing

The recent achievements of FanDuel have further prompted speculation on Flutter’s potential stock listing move. Currently based on the London Stock Exchange, the company has been working on a move to New York’s NASDAQ for over a year.

Such a strategic move would offer FanDuel enhanced access to capital, enabling it to expand its U.S. operations.

Jackson confirmed that the move is still in progress, and Flutter is in discussion with financial regulators.

“We’re working through the implications for our other listings on securing this U.S. listing, with the Securities and Exchange Commission (SEC) at the moment, in terms of preparing our application to the FCC, which is ongoing, and we’ll continue to work in the background on what the implications are for our other listings,” he said, in response to an investor question during the earnings call.

Flutter this year also appointed a new U.S based chairman, Australian-American businessman John Bryant, further solidifying its intent to expand in the U.S.

Author: Paul Campbell