FanDuel Sportsbook Keeps Grabbing Customers As Others Rethink Spend – Legal Sports Report

While some US sportsbooks pull back on marketing in an effort to hit profitability, FanDuel is doing the opposite.

The acquisition opportunity is too good right now to pull back, Flutter CEO Peter Jackson explained during the companys trading update Wednesday morning.

That is even after a first quarter that saw FanDuel add more than 1.3 million customers in the US, which is more than 70% of the new customers acquired in all of 2021, Jackson said.

FanDuel is spending around $290 per new customer with average paybacks in 12 to 18 months, which has management ready to keep working for more players.

We are continuing to push hard on driving some customer acquisitions and were very, very pleased with the acquisition costs that were seeing and the lifetime value dynamics that were also seeing, Jackson said. Its giving us real conviction and were leaning in very heavily to acquire as much business as we can.

The only market where FanDuel pulled back slightly is New York, Jackson said, though new customers are still flowing in there. The company said NY sports betting exceeded expectations with how fast its daily fantasy players are converting into sportsbook customers.

FanDuel is keeping its foot on the pedal while others are backing off more than ever, Jackson said.

Other people seem to be stepping back as I think theyre finding the dynamics difficult but we are seeing a continued big opportunity and are really leaning very hard into it. On a post-Super Bowl basis, we believe that the marketing intensity were seeing and the generosity levels have stepped back more significantly this year than weve seen in previous years amongst our competitors.

Multiple sportsbook operators are making changes based on profitability. Caesars Sportsbook is dramatically cutting back on traditional marketing while Churchill Downs is ending its online sports betting and iGaming business altogether.

Total bets across US sports betting and iGaming more than doubled to $7.7 billion in the quarter with revenue of $574 million in the first quarter. That came from a 43% increase in average monthly players to 2.4 million.

There was a flood of customers signing up for Super Bowl betting, as the day of the game was FanDuels single biggest day ever for new customers. More than 1.5 million players were active on Super Bowl Sunday.

March Madness betting also set a new record with 19 million bets across the tournament.

FanDuel was the top online US sports betting operator in the quarter with a 37% market share, according to the trading update.

That kind of leadership position is not just from adding new customers but retaining old ones as well. FanDuel is seeing strong retention and the biggest reason is the strength and quality of our product, Jackson said:

Were seeing very, very good levels of retention. In fact I think its one of the things thats really helping to contribute to the very strong lifetime value that were seeing from customers. Were seeing really good engagement and repeat engagement with our customers.

And so I think whilst there are quite high levels of churn in the market as people avail themselves with some of these free offers, amongst our customer base were seeing people stay on our platform even if they take advantage of other peoples free money.

Jackson noted the online California sports betting proposal that should be on Novembers ballot has a best-in-class campaign team and significant levels of funding.

It also could bring in hundreds of millions in tax funds for homelessness and mental health solutions, he added. The measure would face a competing tribe-backed proposal that would limit the market to retail wagering for at least five years.

Were doing everything we can to make sure ours is successful. If it is successful and adheres to the expected timetable wed think the state would launch in time for the 2023 NFL season, Jackson said.

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FanDuel Sportsbook Keeps Grabbing Customers As Others Rethink Spend - Legal Sports Report