Posted on: March 8, 2023, 12:01h.
Last updated on: March 8, 2023, 12:09h.
FanDuel is the dominant US online sportsbook operator. So much so that its market share eclipses its two nearest rivals combined, but if the company has an area for improvement, it’s with its online casino offering.
Flutter Entertainment (OTC: PDYPY), which is FanDuel’s parent company, recently acknowledged some issues with the US iGaming platform, pledging to analysts and investors that this is an area of emphasis for the operator.
We are our hardest critic,” said Flutter CEO Peter Jackson on the company’s fourth-quarter earnings call. “When we looked at the quality of our products in the States, we knew it was not good enough. We have made some improvements to it, but there’s a lot more we’re going to bring to the market.”
It behooves FanDuel to address issues with its US iGaming offer because, despite its dominant sports wagering footprint, the company trails rivals such as BetMGM and DraftKings (NASDAQ: DKNG). Those two firms combine for more than half of the US online casino market — share comparable to FanDuel’s sports wagering penetration.
Why iGaming Matters to FanDuel
FanDuel is making iGaming inroads. The operator had a 20% share in that arena in the fourth quarter, up from 17% a year earlier, according to Eilers & Krejcik Gaming (EKG).
That progress is important because internet casinos are legal in just Connecticut, Delaware, Michigan, New Jersey, Pennsylvania, and West Virginia — a far smaller collection of states than those permitting sports wagering. Industry observers view that as a sign there’s long-term growth ahead as more states permit online casinos as avenues for boosting tax revenue.
Add to that, internet casinos offer operators superior margins and lower overhead than does sports wagering. Customers of the former are also more devoted to their preferred iGaming platform than they are to sportsbooks. FanDuel is making moves to capitalize on those themes.
“One specific callout was the introduction of the FanDuel rewards machine, essentially a daily free-to-play slot mechanic that dishes out bonuses. FanDuel said that helped increase casino player days by 1.5x,” noted EKG.
The company is also leveraging slots content, deploying hourly jackpots and progressives that are awarded daily to compel clients to spend more time on the platform.
FanDuel iGaming Moves Could Pay Off
Some of the aforementioned iGaming moves by FanDuel are already paying dividends as the operator’s app recently ranked sixth in an EKG survey, up from the eighth spot last year.
The research firm estimates FanDuel will continue adding internet casino market share as rivals such as BetMGM and Caesars reduce advertising and promotional spending.
One potential hiccup for FanDuel is that Boyd Gaming is migrating its Stardust Online Casino away from FanDuel. Last year, Boyd acquired Pala Interactive for $170 million in cash as part of plans to bolster its internet casino offering. The Las Vegas-based regional casino operator owns 5% of FanDuel, and the latter is the former’s sports wagering partner outside of Nevada.