Flutter Entertainment (FLUT, PDYPY) — the parent company of sports gambling platform FanDuel — began trading on the New York Stock Exchange on Monday. Flutter Entertainment CEO Peter Jackson joins Yahoo Finance's Josh Schafer on the floor of the NYSE to discuss Flutter's listing and the path to increasing market share in the US sports betting landscape.
Jackson comments on the timeline for sports betting legalization across the United States: "There are clearly going to be some states which will be holdouts, so we don't expect Utah to pass legislation. When we look at the three big states between Florida, Texas, and California, we'd expect we'll be operational in at least one or two of those states in time. There's plenty of firsts to go after. We're in 45% of the population here in the US already..."
Jackson also talks about parlay betting, the NFL ahead of this year's Super Bowl, and competition within the space against other platforms like DraftKings (DKNG).
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
JOSH SCHAFER: And we are here on the floor of the New York Stock Exchange, and standing with me is Flutter Entertainment CEO Peter Jackson. Flutter committed a dual listing today on the New York Stock Exchange. They were planning to have a primary listing on the Stock Exchange later this year.
Flutter, of course, the parent company of US Sportsbook FanDuel, the biggest US Sportsbook in the US. Peter, obviously a big moment for you here. A lot of people have been anticipating this. I guess, why now? Why come to market now?
PETER JACKSON: We've been really excited to come and list our business here on the New York Stock Exchange. It's the world's biggest capital market. We're the world's biggest sports betting and gaming business. And we thought it was the right thing to do. It's taken us a bit of time to go through all the work to get our secondary listing accepted, but we're delighted we're here and we're very excited.
JOSH SCHAFER: And you mentioned the overall size. And that's one thing that's a big topic in this industry is sort of the growth of sports betting that we've seen in the US since it was legalized, and potential further growth. Your projections for there to maybe be a total addressable market of $40 billion by 2030. How do we get there?
PETER JACKSON: Well, we are a fast growing business. If you look at our revenue growth last year, we're up 25%. And we get the benefit here with Flutter of owning FanDuel, but also all of our international businesses, which are growing between 5% and 10% as well.
The $40 billion figure that you referenced-- we simply looked at the number of states that we anticipate licensing, looked at the penetration rates that we expect to get to in comparison with Australia and other markets, and we looked at the average bet size that Americans are doing. And that's where we get to the $40 billion. I suspect it'll turn out to be conservative, because everything in America turns out bigger than you expect.
JOSH SCHAFER: How big of a concern is legalization? We know that hasn't necessarily been a linear path, thus far. I'm thinking of California in 2022 not approving legal sports gambling like many of the other large states have. Is it a concern that maybe the market never gets to all 50 states and gets as big as it could be?
PETER JACKSON: There are clearly going to be some states which would be-- which would be holdouts, right? So we don't expect Utah to pass legislation. When we look at the three big states between Florida, Texas, and California, we'd expect that we will be operational in at least one or two of those states in time.
There's plenty for us to go after. We're in-- 45% of the population here in the US can already avail of the FanDuel Sportsbook. And there are more states that we think will come on stream in time.
JOSH SCHAFER: And I'm curious, Peter, when you think about competition in this space-- one of the big discussions entering this football season here in the fall was ESPN getting into betting for the first time, right? And we had Fanatics getting into betting. So some new players after you worked so hard to dominate the market share with DraftKings. How is that impacting your business right now and maybe the marketing spend that you have to put out?
PETER JACKSON: Every year, at the beginning of the football season, we always talk about the fact it's going to be competitive. And it always ends up being. There was every year, there's been someone coming in trying to make a splash. The thing that we're really focused on is making sure we deliver the best product for our customers. And that's what sets us apart. The same game parlay that people love and are really embracing in American football and also in basketball, something that we pioneered and we're well ahead of the competitors. And that's what's really important for us in this market.
JOSH SCHAFER: Same game parlay is going into one game, and betting on multiple outcomes, right? Betting on someone to score a touchdown and maybe betting on their team to win and combining those bets into one.
PETER JACKSON: Absolutely.
JOSH SCHAFER: How has that helped you as a business? Because I'd imagine that might be a higher margin part of the business.
PETER JACKSON: Well, it's a very complicated thing to pull off, right? And kudos to our team in Australia who solved the math involved in those outcomes, because they're all related with each other. But from a customer perspective, it's something which is so exciting.
When you're watching a game, and you've got a view that someone's going to reach those rushing yards targets or score a touchdown or your team's going to win, you can combine them all together. It keeps you focused on the game right up until the end. And that's why we think customers have been so engaged with it.
And in Q4, sports results went against us. We gave $343 million to our customers because the sports results went against us. So these parlays work sometimes for us and sometimes for the customers.
JOSH SCHAFER: How do you manage that as a business when you have that much money going against you?
PETER JACKSON: We're a well diversified group. And that's one of the things that really helps us. We're the world's biggest sports betting and gaming business. Number one here in the States. We're number one in the UK, number one in Australia. Very strong positions in many other markets around the world. And that diversification of geography and sports really helps us.
JOSH SCHAFER: And Peter, it is the day after the NFC and AFC Championship games. So I have to ask you about the Super Bowl coming up in two weeks. We have Chiefs and we have 49ers. I'm curious, just for you as a business, is this still kind of the biggest weekend for the sports betting industry in the US? Or is that starting to shift as the market matures?
PETER JACKSON: It's interesting. If I look at the amount of bets that we had on those two games yesterday-- if I just take the 49ers game, that was the single biggest game we've had since the Super Bowl last year. So we're sure the Super Bowl will break records for us in a couple of weeks time.
It's always fascinating to see where the weight of the money ends up on the different teams. So you know, yesterday, when we looked at the weighted money, the 49ers were not that strongly backed. So it was interesting to see them come through. But you know, look, we'll be rooting for our customers and try and deliver them a brilliant experience at the Super Bowl.
JOSH SCHAFER: Is that your way of saying you don't have a pick for us?
PETER JACKSON: I'm not going to give you a pick. I don't want to get caught out doing that. But you know, look, we'll be very excited. There'll be 600 markets available for our customers to select from. The big question, though, for the Super Bowl is will the Gronk make it or will he miss? That's what we don't know this year. And you'll have to watch the Super Bowl to find out.
JOSH SCHAFER: We'll be watching for that FanDuel AD during the Super Bowl with Gronk. Peter Jackson, the Flutter Entertainment CEO.
