FanDuel's parent company Flutter Entertainment predicts that the US gambling market will see significant growth, expecting it to exceed $60 billion by 2030. This latest forecast represents a nearly 60% increase from the previous estimate in 2022. Flutter's stock price soared 8% following the announcement, reaching a new historical high. As part of its strategic expansion, the company also announced a $5 billion stock buyback plan.
Flutter predicts that by 2030, the US gambling market will account for $63 billion of the $70 billion total North American market. This revised forecast is a substantial leap from the previous $40 billion estimate for the US market. Globally, Flutter estimates that by 2030, the total gambling market will reach $368 billion.
Yahoo Finance quotes Flutter CEO Peter Jackson saying, "With FanDuel, we are the largest enterprise in the US, ranking first in both the sports and iGaming sectors, which gives us great confidence in our market size predictions."
Flutter's Global Expansion and Growth Strategy
Flutter's global influence continues to play a significant role in its success. The company reports a 14% annual revenue growth, expecting it to reach $21 billion by 2027, nearly double the $11.79 billion in 2023. A key part of Flutter's growth includes the recent acquisition of Playtech's Italian gambling operations for $2.6 billion, strengthening its presence in Italy. Jackson emphasized the strategic importance of becoming the top company in Italy, noting, "We know that when we rank first in the market, we will gain a disproportionate share of the economy."
In the US, FanDuel operates in 26 states and continues to lead the market. With its existing operations, FanDuel expects its EBITDA to reach $2.4 billion by 2027, a significant increase from $65 million in 2023. Jackson highlighted the value of existing markets, noting that 50% of Americans currently live in states where betting on sports is legal, and as more states legalize mobile gambling, the growth potential is enormous.
States like California and Texas, which have not yet legalized online mobile gambling, are seen as key to Flutter's future success. Jackson expressed confidence that more states will join the market, allowing Flutter to access about 80% of the US gambling market share in the long term.
FanDuel's Dominance in the US Market
During Flutter's recent investor day presentation, FanDuel CEO Amy Howe reviewed the company's extraordinary growth in the US gambling market. FanDuel has not only solidified its leadership in sports betting but has also become the largest iGaming brand by total gambling revenue (GGR). Since 2022, FanDuel's GGR profit margin has increased from 10% to 13%, and its combined market share for sports betting and iGaming is currently the highest in the US at 38%.
Looking ahead, FanDuel expects its US revenue to reach $9.7 billion by 2027, with an adjusted EBITDA of $2.4 billion. Howe emphasized that ongoing lobbying and educational efforts are crucial for unlocking new opportunities in key US states such as California, Texas, and Florida. Despite obstacles, with California's lobbying efforts in 2022 not succeeding and Florida currently in a gambling monopoly, Howe remains optimistic that the right message can pave the way for future legalization efforts.
Global Opportunities and Financial Performance
While the US remains a focal point for Flutter, its international business is also expected to continue growing. Flutter International CEO Dan Taylor noted the company's ability to capture market share in developing regions like Latin America, India, Central and Eastern Europe. Recent acquisitions include the purchase of Italian operator Snaitech for €2.3 billion and the acquisition of Brazil's NSX Group, solidifying Flutter's leadership in mature markets such as the UK, Ireland, and Australia.
Taylor highlighted Flutter's investment strategy of investing in "local heroes," brands that resonate strongly in specific regions. This approach, combined with Flutter's global resources and purchasing power, enables the company to realize impressive value from recent acquisitions such as Adjarabet, Sisal, and Tombola Arcade.
Group CFO Rob Coldrake provided a comprehensive financial overview in his speech. Flutter expects a revenue compound annual growth rate (CAGR) of 16% by 2027, on par with other rapidly growing companies like Doordash, Pinterest, and Tesla. Notably, Flutter's adjusted EBITDA CAGR is projected at 48%, significantly outpacing these companies. The company also plans to achieve $5.2 billion in adjusted EBITDA by 2027, thanks to an efficiency plan expected to save $300 million.
Flutter recently approved a stock buyback of up to $5 billion over the next few years, reflecting its strong financial condition. While Coldrake did not rule out the possibility of future dividends, the company's focus remains on maximizing shareholder returns through the buyback program.
