Top executives of FanDuel parent Flutter Entertainment spoke mostly in generalities during Tuesday’s second-quarter earnings call. But they were explicit about one thing.
“We have no plans to introduce a surcharge for winners,” said CEO Peter Jackson. He was referring to DraftKings’s plans for an impost on winning bets, an effort to claw back revenues lost to taxes in states such as Illinois and New York.
FanDuel’s stance on the issue had been a point of much anticipation leading into the call. Wall Street was looking to FanDuel for an indication as to whether DraftKings would be a trendsetter or an outlier on the issue.
Rush Street Interactive had already kiboshed the idea of surcharges. And shortly after Jackson’s pronouncement, DraftKings canceled the surcharge. As reported by Bloomberg, DraftKings posted on X that it made the decision “based on feedback from customers.”
On the earnings call, Jackson said, “There’s a happy medium for tax rates. Most states have a sensible approach.”
That didn’t include imposing a graduated tax rate, as Illinois has done, which Jackson said would drive customers offshore to illegal bookies. He vowed to make up the difference in affected states via tighter holds (“moderating levels of generosity”) and less local marketing.
Tensions and crosstalk arose at the end of the earnings call, when UBS Managing Director Robin Farley queried Jackson at length about adding surcharges “to pass the cost along to the customer” and help set a precedent. Farley contended that, given FanDuel’s and DraftKings’s predominance in sports betting, they could set the market and also deter other states from increasing their levies.
Jackson’s response was curt.
In his first earnings call from his new New York City offices, Jackson said he felt vindicated in FanDuel’s customer-acquisition strategies. He called the overall results “a very strong quarter for the group and ahead of expectations. We have outperformed in our main markets.”
Jackson touted improvements in Flutter’s NBA, WNBA, and MLB products, as well as the successful launch of Italy’s first-ever same-game-parlay bet. The latter, he said, led to record market share in that country.
The horse racing market in Australia was said to be fading, but it was offset by growth in rugby wagering, according to Flutter bosses. Said new CFO Rob Coldrake, “I’m delighted with the current momentum in the business.”
Coldrake cautioned that a modest negative return on investment should be expected in the third quarter. He added that it would be more than offset by a revenue upsurge in the final quarter of 2024 and that Flutter would be putting an additional $20 million toward marketing.
The CFO also basked in Flutter’s success in the Euro 2024 soccer tournaments, which saw heightened activity and favorable outcomes for the bookmaker. “We’re absolutely delighted,” he said. “That [success] continued into the third quarter.”
Coldrake characterized Flutter’s international igaming performance as “excellent,” marked by year-over-year growth in all four of its United Kingdom brands.
Jackson didn’t comment on rumors that Flutter might be interested in the Diamond Sports affiliation shed by Bally’s Corp., or on a possible acquisition of ESPN Bet. “We’ve always been able to benefit from our strong media ties here in the U.S.,” he said. “Scale is our friend. It’s important that we have quality products to back it up with.”
His CFO added that Flutter was rolling out a poker platform in Italy and “we’re seeing some green shoots” in the U.S., via its subsidiary Poker Stars. That firm was cited as one of the main components of Flutter’s push into Brazil, a territory Jackson has been trying to penetrate since 2018 and “we’re finally getting there.”
