Mon. Apr 15th, 2024

FanDuel parent Flutter came out swinging Thursday, insisting the online gaming platform is the market leader in sports betting in the United States after DraftKings last week boasted it had taken over the top slot.

“We have a billion dollars more in revenue in the U.S., so we’re very clearly number one,” Flutter CEO Peter Jackson said in an interview with CNBC after an earnings conference call.

Even as Jackson projected confidence in the company’s market position, FanDuel’s revenues failed to meet Wall Street expectations in the third quarter. In the U.S., the company’s revenue grew by 20% year over year to $820 million, and average monthly players grew by 38%.

Flutter shares plummeted after the company reported disappointing third-quarter results. It blamed its softer than expected top line on a streak of customer wins in September and October, foreign currency headwinds, a slowdown in Australia and tax changes in India.

It did not detail earnings results, but reiterated its full-year adjusted EBITDA guidance of $180 million in the U.S.

The FanDuel Inc. app and DraftKings Inc. website are arranged for a photograph in Washington, D.C.

Andrew Harrer | Bloomberg | Getty Images

DraftKings, by contrast, issued improved guidance in its third quarter earnings report last week. It said it expected full-year adjusted EBITDA losses of $95 million to $115 million and revenue of $3.67 billion to $3.72 billion.

On a conference call with analysts and investors, Flutter’s CEO Jackson said he thinks the measuring stick to determine who is the market leader should change. He said net gaming revenue, rather than gross gaming revenue, should be the more important metric for who is in first place. There, FanDuel has 47% market share and holds the top spot ahead of DraftKings.

FanDuel claims the number two position in iGaming, or online casinos, in the U.S. Its gaming revenue grew 52% year over year. FanDuel said it’s the fastest-growing brand in the space.

Igaming is more profitable than sports betting — and it’s a big contributor to DraftKings gaining the number one slot. Its acquisition of Golden Nugget Online is paying off in online casino play.

DraftKings was quick to claim the crown, and CEO Jason Robins touted the company’s market position on his earnings call and in an interview with Jim Cramer on CNBC’s “Mad Money.” Robins said he’s very proud, “but also realized it doesn’t mean anything if we don’t continue to build on the momentum that we’ve generated.”

DraftKings took the top spot from FanDuel in August in online betting, combining iGaming and online sports betting but leaving out retail sports wagering, according to Eilers & Krejcik, a research and consulting firm in the gaming industry,

But traditionally, gambling results are categorized as sports betting (online and retail) and iGaming, separately.

Also, the Eilers & Krejcik research report was issued before all states reported their gaming numbers. August is typically a slower sports month, so iGaming results would account for a bigger percentage of the total.

At least one other rival think it has a claim to part of the online betting crown. During MGM’s earnings call Wednesday, CEO Bill Hornbuckle acknowledged DraftKings’ triumph in August, but said, “Year in and year out, we’ve been number one in iGaming. And so we’ve got a very big position we want to protect, and we’ll continue to do so.”

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