The leader amongst online sports betting sites in the United States believes it has even more room to grow — in both new and existing jurisdictions.
Flutter Entertainment PLC held an event on Wednesday to showcase its key U.S. business: FanDuel. And, according to its Dublin-based parent company, FanDuel already leads all other U.S. operators in terms of gross gaming revenue from online sports betting, as it currently generates more than 40% of receipts in 16 states.
Wednesday's presentation projected FanDuel will reap about $3 billion in net gaming revenue this year, including sports betting, iCasino, and daily fantasy, after deducting free bets and other promotions. What's more, the numbers presented at the investor day pegged the current size of the U.S. market for online sports betting and internet casino gambling at around $9 billion a year in gross gaming revenue.
By 2030, though, Flutter and FanDuel are forecasting the total addressable market in the U.S. will grow to more than $40 billion a year, with online sports betting-related revenue quadrupling from roughly $4.6 billion annually to $22.6 billion across all operators. That would allow FanDuel to generate a lot more revenue as well, even as the business is already aiming for full-year profitability in 2023.
Room to run
Key to that thesis is significant growth in the share of the U.S. population with access to legal sports betting and iCasino offerings. To get to $40 billion a year in total revenue in the U.S., Flutter is projecting the share of the adult population with access to online sports betting will rise to 80% from 35% over the next 18 years or so, while iCasino access will rise to 25% from 12%.
“So all in, a four-and-a-half times multiplier from where we are today,” FanDuel CEO Amy Howe said during Wednesday’s presentation, adding that it presents a "significant runway for growth."
This, however, suggests more states will legalize online sports betting and iCasino within their borders. Moreover, it suggests some of the bigger states in the U.S. will come online as well, such as California.
“There's a lot of white space left on the map, a lot of new states that we can open to increase our population coverage,” FanDuel President Christian Genetski said. “And second, we believe there is still a lot of runway for growth in our existing states.”
I believe this is what the kids call a "total beatdown" for the online sports betting measure in California pic.twitter.com/lGKq5hZWWY
— Geoff Zochodne (@GeoffZochodne) November 9, 2022
Genetski added that they are trying to unlock additional markets and that they see a path to 80% of the U.S. adult population gaining access to legal sports betting. He also acknowledged it may seem a bit weird to make such a claim just a week after FanDuel and six other online sports betting companies had their pro-mobile wagering ballot measure in California resoundingly rejected by voters.
Yet the FanDuel president played down their expectations for California this year and suggested more went on behind the scenes between the online operators and the state's Native American tribes, who opposed the mobile sports betting measure and proposed their own retail one (which also failed).
“I don't want to go into too much detail about all the conversations we had along the way,” Genetski said. “But… suffice it to say it was not always a fait accompli that the large tribal casinos in California were going to oppose mobile sports betting. As it turned out, ultimately, I think they weren't ready for it in 2022. And they did oppose it, and they did so at the cost of their own retail sports betting measure.”
Still, Genetski claimed all relevant stakeholders agree that, as sports betting continues to spread across the United States, California will eventually follow suit.
“It is going to join those states,” he said.
FanDuel says more than 200,000 people tailed @PatMcAfeeShow's Super Bowl same-game parlay this year, which they are confident was the biggest group parlay bet in the global history of sports betting (bottom of this investor slide). pic.twitter.com/TLRE6bgUI0
— Geoff Zochodne (@GeoffZochodne) November 16, 2022
Furthermore, FanDuel is anticipating further growth in its existing states, such as New York and Louisiana, which only relatively recently launched online sports betting. The growth from these (whose player bases may become more recreational as they mature), plus the new ones, will help nudge the total addressable market toward $40 billion.
Flutter and FanDuel also see room for growth in iCasino, although the ceiling for that growth is much lower than that of sports betting.
Even so, Genetski said there are reasons to be optimistic, including impressive tax revenues in existing iGaming states and the possibility of cash-strapped governments looking for ways to fill holes in their budget amid tough economic conditions.
“Another significant point, and something that's changed over the course of the last two years, is that we now have near unanimity in the land-based casino community that iGaming is a net positive,” Genetski added. “So we now have a coalition that involves both the pure-play online operators and the land-based casinos working together to push for iGaming. As a result, we see real momentum.”
