The last half decade has seen astonishing growth for US sportsbooks as America takes the stabilisers off sports gambling
US Sports betting has flourished since 2018 when the ‘Bradley Act’ that had outlawed most gambling nationwide was repealed.
Cut to 2022 and FanDuel and DraftKings are rampant all over the US garnering huge market caps, with growth that doesn't appear to be slowing.
FanDuel, founded in Edinburgh back in 2009 developed its daily fantasy game by allowing users to win prizes by drafting a team of athletes predicting their good form, like the UK’s fantasy football, leading to a major investment by Flutter Entertainment.
It was a good move. The Irish FTSE 100 bookmaking company has seen exponential growth since 2018 when it began to acquire FanDuel.
Now Flutter boasts a £20bln market cap, much higher than its principal rival DraftKings (DK).
DK includes fund giants Vanguard and ARK as well as Chelsea owner Todd Boehly among its backers.
Since 2018, US States have been legalising sports betting including New York, Pennsylvania and Washington with California, Florida and Georgia all indicating they will shortly be following suit.
Driven by online gambling technology developed in the UK, FanDuel and DK can now guide customers directly into the world of betting.
As punters will tell you, it’s a seamless transition from daily fantasy to actual betting as the skills required are identical - an interest in sport and a desire to win money.
US still early into its gambling experience
Combine this with America’s youthful understanding of betting and such companies are cleaning up.
The days of the US flocking to Nevada to bet are over, instead, gamblers can access via mobile phone or online meaning the NFL, NBA and MLB are even easier to wager on, even if the odds offered are slightly weaker than the UK.
Flutter’s results today underlined the speed of its expansion.
Third-quarter revenues for the group rose 22% to £1.89bn but this included US growth of 82%.
Flutter Entertainment raises US guidance but expects £280mln charge from rising debt costs
Full-year revenues in the US unit are now expected to be between £2.45bn to £2.65bn (up from previous guidance of £2.3bn to £2.5bn), while the US operation, ie FanDuel, is expected to swing into profit next year.
Peel Hunt had predicted the results would “highlight a continuing remarkably strong performance from FanDuel attesting to the considerable intrigue from investors and the clear room for growth when Californians and maybe Texans can join the party”.
Flutter Entertainment’s share price is 11,790p, down slightly today, while DraftKings share price is US$11.77, giving a market cap of .US$5.6bn.