Flutter Entertainment heralded a year of unprecedented corporate triumphs as it released its financial results for the 2023 fiscal year this Tuesday, March 26. Anchored by a colossal 24.7% surge in group revenue to a towering $11.79 billion, the results have not only showcased Flutter’s industry prowess but significantly, spotlighted its ascendency in the competitive U.S. market.
Driving this meteoric success is the performance of Flutter’s U.S. sports betting and iGaming platform, FanDuel. Company CEO Peter Jackson celebrated FanDuel’s climb to market dominance in the U.S., a region that now stands as the linchpin of Flutter’s strategic successes.
FanDuel’s robust expansion in the gaming landscape is echoed in its market share metrics for 2023, boasting a net gaming revenue share that scaled to 53.4%—a noteworthy leap from 43.2% the previous year. This expansion welcomed over 3.7 million novel enthusiasts into the realms of betting and iGaming, marking a steady year-over-year climb of 19.0%.
More impressive is Flutter’s swing to a positive further adjusted EBITDA in the U.S., coming in at $167 million for 2023—a stark contrast to the $263 million loss noted in 2022, and marking the enterprise’s first full year recording positive further adjusted EBITDA. Uplifting the financial narrative, the EBITDA margin surged from a -8.2% in 2022 into the positive reaches at 3.7% in 2023.
During the earnings call, Jackson extolled the U.S. sector’s endeavors, particularly in the iGaming front, while Chief Financial Officer Paul Edgecliffe-Johnson proclaimed that Flutter, with FanDuel at its helm, has reigned as the top online casino operator in the U.S. since January 2024.
“There is tremendous momentum in the business,” asserted Jackson, applauding the innovative strides and hinting at greater aspirations for the company’s future trajectory. FanDuel entices a growing U.S. customer base, surpassing rivals like DraftKings and BetMGM, thanks to its compelling product offerings.
Where FanDuel really shines is in its sports betting features, particularly its celebrated parlay products which have galvanized Flutter’s presence during peak U.S. sporting seasons. Jackson underscored the competitive edge this affords the company during NFL and NBA periods, emphasizing FanDuel’s product quality that not only differentiates them but also fosters a strong margin due to pricing precision.
In a strategic maneuver of market expansion and distribution diversification, September 2023 saw Flutter acquire a significant 51% stake in the Serbian sports betting and gaming operator MaxBet for €141.0 million, with an option to acquire the remaining shares in 2029. This acquisition seamlessly integrated into Flutter’s broader expansion ethos.
Jackson, along with CFO Edgecliffe-Johnson, stressed Flutter’s discerning approach to mergers and acquisitions, targeting only those market leaders that align with their strategic vision. They indicated that Flutter could deviate from its upgraded medium-term leverage target, particularly when potential acquisitions are deemed attractive.
One such fruitful acquisition was the takeover of Italy’s premier online gaming and lottery firm Sisal in 2022. This move bore fruit in 2023 with Sisal contributing $1.22 billion in revenue, equating to 43.4% of Flutter’s International sector sans the U.S., UK, Ireland, and Australia. Sisal’s adroitness in wooing land-based players online and leveraging the lottery player audience offered vital strategic advantages in markets with restricted advertising.
However, it wasn’t all upward trends for Flutter. The company acknowledged a “mixed bag” for its International sector, with earnings in Australia the sole segment to report a downturn, as revenue slumped by 7.1%. Notwithstanding a robust 45% market share through its Sportsbet operator, Flutter ascribed this to increasing regulatory pressures and dwindling player spend.
Yet, Jackson remains optimistic. Despite the challenges, he lauded the Australian team for generating game-changing ideas with global relevance, particularly in parlay betting. Though mixed fortunes colored the Australian narrative, Jackson showcased a resolute belief in the potential for it to empower Flutter’s continued worldwide ascendancy.
