FanDuel’s New York Success Indicative of Nationwide Market Dominance as Strive for 2023 Profitability Continues
Yesterday, Lineups’ Mia Fowler wrote about New York’s rapid takeover of the United States sports betting market with more state tax revenue in its first five months of operation than any state has had in its lifetime. New York has handled over $7 billion to date and has generated over $500 million in gross gaming revenue. FanDuel has continued to emerge as the dominant sportsbook in the state with a staggering market share.
FanDuel’s Dominant NY Market Share
In the most recent week ending June 19, FanDuel handled 47% of all money bet online on sports. That turned into an astounding GGR share of 89.1% at over $12.3 million. DraftKings was the only other operator to even surpass the $1 million GGR threshold as it came in at $1.1 million, and three sportsbooks posted negative revenue for the week.
FanDuel has held a strong lead in market share in New York for a while now, and it has generated $3.2 billion in handle (39.4%) and $262.2 million in GGR (45.5%) since its launch on January 8. FanDuel is the first operator in New York’s history to surpass $3 billion in total bets handled, and the operator has generated more tax revenue for New York year-to-date than Nevada’s entire sports betting market has developed all time.
FanDuel revenue from New York sports betting last week: $12 million.
The next closest operator? DraftKings: $1 million.
— Sam McQuillan (@sam_mcquill) June 27, 2022
FanDuel Leading in Other States
The strong market lead for FanDuel in New York is reflective of the operator’s dominant market share across the country. In many states’ most recent reported handle and revenue figures, FanDuel was the leader in the market by a significant amount.
In Michigan’s May report, FanDuel handled $99.4 million in bets (29.8%) and generated $15.2 million in GGR (42.3%) on a 15.2% hold rate that was by far the highest in the state. In Indiana’s May report, FanDuel claimed a handle of $91.6 million (29.7%) and $12.6 million in GGR (41%).
In Illinois’ April report, FanDuel handled $287.9 million in total wagers (34.3%) and $33.4 million in GGR (49.1%) on an 11.6% hold rate, all of which led the state. FanDuel’s lifetime market share in Pennsylvania comes in at 36.4% and its revenue share sits at a staggering 41%.
FanDuel’s Plan is Working
In March, FanDuel’s parent company Flutter had its Q4 2021 earnings call, and the company reported that FanDuel’s revenue grew 113% year-over-year to $1.9 billion in 2021 compared to DraftKings’ $1.3 billion as the second-most profitable platform. FanDuel reportedly had a 40% market share across the United States in 2021, and it was the top platform in nine states over the course of the full year.
FanDuel has provided an industry-leading product that has continued to improve, and it’s proven to be a winner in the industry. According to Flutter Entertainment CEO Peter Jackson, customers “may take other competitors’ free money, but they come back to the FanDuel app.” FanDuel also has an advantage of a built-in foundation of Daily Fantasy Sports customers who will be more likely to use its sportsbook than switch to a competitor.
In Q1 2022, FanDuel delivered a record quarter with a 45% year-over-year revenue growth to $574 million. FanDuel also acquired over 1.3 million new customers in Q1, which represents over 70% of its entire customer acquisition volume during the full year of 2021. Of course, the launch of New York’s market was incredibly beneficial to the boost in those numbers.
*Flutter's FanDuel Expects Profitability in 2023
• FanDuel reported a 40% U.S. sports betting market share for the fourth quarter.
• Over $1 billion was invested in promotions, sales, and marketing across its U.S. business in 2021.
Source: Flutter IR$FLTR.LN
— Roundhill Investments (@roundhill) March 1, 2022
FanDuel has continued to benefit from consolidation in the sports betting space, and the most recent numbers in New York are a great example of this – the top four sportsbooks in the state (FanDuel, DraftKings, Caesars, and BetMGM) combined for over 94% market share despite there being eight total operators in the state. While there are dozens of platforms available across the country, smaller companies simply can’t compete with FanDuel at the top of the market.
FanDuel has maintained a deadline of profitability by 2023 and CEO Amy Howe told the Wall Street Journal that “what got FanDuel to where it is today is not necessarily going to be what gets us to potentially a $10 billion company.” Regardless of what Howe and her company’s plans are for the future, impressive 2022 success continues to provide confidence in FanDuel’s ability to be profitable by 2023.