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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
Charlie Horner (00:01.528)
It's all change at Flutter and FanJuel as three months after Amy Howe departed the sportsbook brand, Peter Jackson is also leaving as CEO of the parent company. It comes as US revenue declined 6%, eBitDar dropped 70%, and the share price fell by around 60% in the last year. So what next for FanJuel, and what does this bruised giant need to do to regain its confidence? Welcome back to iGaming Daily, supported by Optimove, the creator of Positionless Marketing.
And the number one player engagement solution for sports betting and iGaming operators. I'm Charlie Horner, and to distill all of this one with me today is SBC America's news editor, Tom Nightingale. Tom, how's things?
Tom Nightingale (00:44.414)
Yeah, pretty good, thank you. I should I I I'll clarify what you said. We're gonna try to distill all of this down. yeah, we I mean we're deep in deep in earnings season and it's it's interesting, right? Earnings calls used to be about sort of, you know, how sports betting hold is going and stuff, and now these days, what with prediction markets and everything, the the tone is pretty different for the for for the online gaming giants. So yeah, we had some pretty notable news obviously out of Flutter and FanJuel this week.
Charlie Horner (01:13.518)
Yeah, certainly, certainly. And we spoke with Ted Onplay and Ted Menmuir last week to get the European perspective. I just wanted to flip it and do a bit of a part two to get the US angle, considering that the US is so vital to Flutter's operation these days. so just from your perspective, Tom, how surprised were you that Peter Jackson is stepping down just three months after Amy Howe left as FanJule CEO?
Tom Nightingale (01:41.387)
I mean I didn't expect that to be the head headline news of earnings call day, put it that way. I mean there wasn't really you often get a you often get a sense or, you know, there are indicators in advance that that that something like this is coming, but just like with Amy Howe leaving, FanJul as CEO, this was somewhat out of the blue, although I would add as a caveat that I I I can't say that I find it the most surprising CEO change in the world.
we're gonna talk about, you know, Flutters and FanJuel's kind of somewhat downward trend in recent quarters. And then what I would say as well is like in Dan Taylor, they have someone I you you might call a natural successor, I think, if they were, you know, if Flutter felt they needed to make a change. You have Dan Taylor who's been CEO of Flutter International for six years. And looking back, you know, with hindsight, he was sort of promoted, he had president added to his title as well in May.
So you wonder maybe, you know, was there at least a contingency transition plan in place that they've now decided to put into action? So it's not sort of an absolute bolt from the blue wow, this is in in incredible and goes against, you know, sort of the public image that they'd been putting out because not all is well really with Flutter and FanJor as we know.
Charlie Horner (03:06.254)
Yeah, absolutely. We we covered their Q2 earnings last week when when they were published and it didn't make for pretty reading from from a FanJuel perspective, but also from an international perspective as well. But Jackson spent much of the earnings call talking about this sports book improvement plan, b both in the prepared remarks and and in the QA. What what is the sportsbook improvement plan, Tom? what is the strategy to turn
FanJul's fortunes around and I guess what are the main issues that it's facing, it might be good to to outline where where the challenges are.
Tom Nightingale (03:41.207)
Yeah, well I mean the challenges are sort of manifold, aren't they, really? I mean, for a start, you have if you're looking at the sports book side of things, it didn't take us very long in the earnings the earnings call to hear the term customer friendly results that we hear all the time from online sportsbooks. but it was interesting, I was reading actually about in after the earnings call, Peter Jackson spoke to CNBC, I think it was, and he was quite forthright. He said we didn't execute very well last year on the sports betting side of things.
He said something to think about mishandling, you know, it's sort of customer proposition, pulling back on promotions and generosity a little bit and and and he said that as a result of this sort of stuff, FanJuel entered twenty twenty six with perhaps a smaller sportsbook business than it it really should have done, considering that it's typically been, you know, the number one in the US or certainly, you know, one of the top two alongside DraftKings.
in terms of the strategy moving forward on the sports betting side of things, the thing that really stood out to me, like obviously there's a big focus on we know ev we know that these sports books focus on on parlays and customer attention and cross-sell between, you know, online casino and sports betting. But the the headline really for me on the sports betting side of things is that
Flutter's certainly not going to slow down its investment into the US business. And if in fact, I think they said they're going to put about $270 million of additional investment into the US business in the second half of the year. tying into what Jackson said, you know, they're gonna f I think they're focusing on sort of better rewards. They've got their financial loyalty program that they're expanding.
better promotions and customer generosity and stuff and and and keep people, you know, coming back. Cause obviously FanJuel has a massive sports betting user base, but as we'll get onto later in the call.
Tom Nightingale (05:25.852)
It's fair to say, you know, we've had years of FanJuel and DraftKings as quite clearly the top two places to go and bet on sports online. Now all of a sudden you have not only increased competition from state-regulated sports betting, but obviously there are many, many more places that people can go and bet on sports if they want to these days. so it will certainly be interesting to see. I mean, Dan Taylor doesn't take over officially until 1st of October. So it's worth bearing in mind when we come back in three months' time, we do have another full quarter.
before that CEO change actually takes effect. and obviously with NFL season coming up at the end, you know, towards the end of that quarter, it's going to be very interesting to see, you know, how FanJuel tries to maneuver really to keep hold of what you would notionally say is still a number one the number one ranking in online sports betting. But as we've said, the the the waters are a bit murkier now, aren't they really, than they they were in years past.
Charlie Horner (06:19.84)
Yeah, it's a remarkable story really, because Fan FanJuel was, I mean and arguably still is, one of the clear top two. And y you sort of felt that that position was impenetrable, that it was clear and th and there there was, you know, it was always going to be a success. And it it it really feels like in the last twelve to eighteen months things really have turned around. But while the sports book is struggling, FanJuel Casino is performing quite well. I think revenue
grew fourteen percent year on year during Q two. how has FanJuel sort of built up that casino brand over the years? And and do you think that being reliant on online casino for growth is a fairly risky strategy given the fact that, you know, there's only seven or eight states that actually offer legal online casino gambling.
Tom Nightingale (07:09.246)
Yeah, I mean, building up the casino brand makes sense, right? I think that online casino, as we've talked about numerous times, compared to sports betting, online casino has some clear advantages. Like I think that it is a higher margin business for operators.
maybe less lift in terms of setting up a compelling proposition. Obviously you have the fact that online casino you can play you know, as long as you're in, like you say, one of the limited markets in the US that offers online casino, you can play any time, right? That's a big thing. I think sports is very sports is very seasonal.
And also is to kind of dependent on sporting results. Like if all the fav you know, if the favourites are winning and, you know, i i if results are going against you as an operator, you have to work quite hard to try and mitigate that. Whereas online casino obviously doesn't have that element of contingency, I guess, on you know, based on the the the results in the NFL every week or whatever.
But I think cross sell is a big thing. We hear this from a lot of different operators, right? And and one note in the Flutter call, or in the release, I forget, was that the underlying metrics on the sports betting side of things were pretty good throughout the World Cup, I think. And they also called out they got quite a lot of cross sell, I think, from sports betting to online casino and maybe vice versa during the World Cup. Obviously lots of people on the platform.
FanJuel, it's very easy. You know, I use FanJuel in Ontario from time to time. Very, very, very easy to switch between sports betting and casino in the app. so I think that's a big thing. but yeah, I mean, like you said, the terms of the markets, right? There are 30 plus online sports betting markets in the US. There are seven open
Tom Nightingale (08:49.992)
Online casino markets, not all of those are available to FanJuel. Maine just legalized online casino hasn't set it up yet. When it does come into effect, there's absolutely no guarantee that FanJuel are gonna have a presence in that market, considering the
Maine ties its online casino market to to its tribes by state law and DraftKings and Caesars have good positioning in sports betting there, so you know, there's a chance that Fange will get shut out of that online casino market. Peter Jackson did say that he hopes to see at least one more state legalized online casino by the end of next year. But I mean that's slim pickings, isn't it? By the end of next year, so like in the next eighteen months or so you might get one more market you can operate in. It's not exactly
high ceiling in terms of potential growth, like expansion of online casino. So yeah, I mean you don't want to be too reliant on that, on that revenue, but there's no doubting that it's a you know, FanJul are far from a loan in terms of having invested a lot in their casino product. And I think the reasons are, as we've just talked about, the reasons are fairly evident behind that. but
Yeah, I mean there's just not really much root not head not much headway really for for growth or or expansion, which I think is troubling, you know, not only FanJul but many, many, many big US operators.
Charlie Horner (10:04.246)
Yeah, I think that's one of the primary drivers behind the fact that European operators perhaps haven't enjoyed as much success in the US as as they do in their home markets in in Europe. that that lack of online casino regulation is is is quite a challenge. now Tom we have to mention FanJuel's third product, vertical, FanJuel Predicts, launched in December 2025. let's just talk about how that
platform has sort of performed against its peers. We we know there's the the big two of prediction markets in Calci and and Polymarket. How where does that sort of fit in with with FanJul predicts and do we know how much Flutter has actually invested in to the to the platform?
Tom Nightingale (10:49.064)
In terms of how much they've invested in, I'm not sure this is probably outlined in some financial somewhere, at least anecdotally. I'm not entirely sure, but you know, anecdotally speaking, they've invested a lot of time and effort into it, right? We we heard before they started doing it to recap for people like FanJul Flutter. Fanjul were the first, I think, first major
US online gambling operator to declare that they were going to step into the prediction markets realm when they partnered with CME Group, Chicago Mercantile Exchange, last, I think they announced that like last July or last August. and so through that partnership with CME Group, they launched in December, then expanded sort of nationwide in I think like January, and they offer sports basically in as Peter Jackson put it on the call actually in
basically the half of America that they cannot access through state regulated sports betting. They offer sports there. in terms of how they're performing, I mean, it's difficult because also you have like, you know, prediction market trading volume is very much not the same as sports betting handle. so I d it's hard to make a direct comparison, but from all the evidence I've seen, people like Eilers and Krachik and these these companies that track this stuff, Calci are ahead by absolutely miles.
in terms of volume on sports, miles and miles. And then FanJul, from what I've seen, like FanJul predicts barely seems to really register by comparison. You know, there's Couchy, there's Polymarket. I think DraftKings predictions, I think, is generally considered to be doing better than FanJul predicts. Even people like Underdog, another tip c FanJul DraftKings, I guess, like historically a daily fantasy sports operator. Underdog have been offering sports contracts since
really early, comparatively speaking, last September, I think. Whereas FanJul and DraftKings were like December-January kind of time. so I would say that I don't want to call it a drop in the ocean. I'm not sure the is the the the exact numbers, but there's no there's no doubting that you know FanJul's prediction market's share, if you will, is is nothing like its
Tom Nightingale (13:00.552)
sports betting and I g an online casino share in terms of ranking, you know, among these platforms. There was a really interesting note, you know, in the in the call amid amid everything about Peter Jackson and everything like that, you know. FanJul are FanJuel is relocating its sports contracts from CME Group, which is its joint venture partner with FanJulPredicts. Like CME Group I think owns like fifty one percent of FanJul Predicts, if I'm if I'm not mistaken. But FanJuel are relocating their sports contracts to to to crypto dot com.
which is partnered with all kinds of online gaming operators. And at least recently we've seen a lot of online gaming operators who now offer sports prediction markets leaning into crypto.com's what they call combo contracts. Think parlays and accumulator betting for, you know, for a UK audience like and FanJuel also said that they they're gonna add market making, which I won't get into it, but a lot of analysts suggest that
Charlie Horner (13:43.246)
Mm-hmm.
Tom Nightingale (13:58.175)
Establishing your own market making operations can be a real differentiator, I think, and a real advantage in in in building out your prediction markets business. And Flutter did say they expect to make about fifty million dollars of additional revenue from that by the end of this year, I think. So I mean that's a boost and that's kind of a big step. It'll be interesting to see how FanJul Sports predictions stack up.
now they're sort of all through crypto.com rather than CME group. Like the their financial FanJul's financial markets are staying with CME group, but obviously the the focus is sort of kind of on sports. It's all quite difficult to assess, I would say, to be honest. Because also it's it's just it's changing so fast, right? And we won't even get into the whole legal side of it. Like are they going to be able to still be doing this in a year's time? so it's a real I think it's a real it's a real juggling act, right, between your typical state regulated gaming operations
Charlie Horner (14:45.762)
Well, that's quite right, yeah.
Tom Nightingale (14:52.138)
your prediction markets when you have like Calci absolutely dwarfing everybody else, it seems. so that's another thing to you know it's another thing to watch for how it progresses the rest of twenty twenty six.
Charlie Horner (15:04.526)
Yeah, pretty pretty remarkable actually that it's it appears that Flutter has sort of missed the boat on the or or or at least was late to the party on prediction markets considering its long history with Betfair. which fundament I mean, people might argue about it, but it's a fundamentally similar product experience. but yeah, let let's see how that that strategy goes. but for now Tom we'll take a quick break and we'll come back and we'll continue the conversation.
Charlie Horner (15:34.38)
Welcome back to iGaming Daily. Now Tom, I just wanted to sort of make a a small comparison because Flutter reported at a similar time to to DraftKings. And I believe DraftKings also missed targets during Q2, despite the the the boost of the World Cup, and I'm not sure how much that resonated in North America, but I I would assume that it it it would have done, considering it was h held there and hosted there.
I guess the question is really, is h how hard is it to actually operate a sports book in in the United States in twenty twenty six, particularly within the context of prediction markets?
Tom Nightingale (16:10.132)
Yeah, so I mean with dra the just a note on DraftKings, yeah, you're right. I mean they did miss expectations. I think I think the the general consensus from what I've seen seems to have been that there's a little bit more confidence in DraftKings than there is in FanJul in terms of the that outlook. I mean DraftKings didn't cut its guidance, whereas Flutter, I think I'm right in saying cut its cut its ebit like its a its earnings guidance for the year by about twenty two percent on the US side. it's a big cut.
Really, isn't it, you know? on on the prediction market side of things, you know, it's interesting 'cause the the endless debate, one of the endless debates, I should say, is, you know, just how much does how much does sports event contracts, sports prediction markets, you know, cannibalise online sports betting? That's a big debate. really interesting note from DraftKings CEO Jason Robbins on Friday, well, Thursday, I guess, who said that their analysis suggests
That there is only about a 1% overlap in this between DraftKings sportsbook customers and like Calci's user base for sports contracts. And and and DraftKings, I know this is a flutter podcast, but DraftKings CEO said that they reckon that about eighty to ninety percent of volume in sports prediction markets in general, comes from sort of
professional betting syndicates and institutional traders and sharps and all these kind of, you know, this these kind of cohorts who Jason Ro as as Jason Robbins positioned it as, you know, this isn't really volume that we would have been capturing on our sports book anyway. It's not who we're targeting as an audience. You throw in the fact that I mentioned Eilas and Krychek earlier. Like they they came out with an estimate a few weeks ago that around about 70% of sports prediction markets activity comes from states where legal
Charlie Horner (17:34.477)
Mm-hmm.
Tom Nightingale (18:01.142)
then you know online sports betting is not legal. So how much crossover is there for companies like FanJul and DraftKings? I don't know really. But what you can't deny is that like CalChey is an option pretty much everywhere now. Polymarket is an option pretty much everywhere. Now if you want to bet on sports you can go to many, many more places. I know you there's always been like offshore sports books that you can use. But of course the the big difference here with prediction markets or a big difference is that at least until we hear from
The Supreme Court.
Sports prediction markets are kind of legitimate at a federal level. So it's not really like an you know, the American Gaming Association positions sports prediction markets as being very similar to offshore sports books, you know, in terms of the principle. But the fact of the matter is, you know, they are for now at least regulated at federal level, which has given them a kind of legitimacy. And that's why we've seen so many gaming operators move into this space, even though it might upset state regulators, right? So,
You know, I mentioned Peter Jackson's comment already, like he's he said on the earnings call, like this you know, I I I think it's still true, really, that the key thing to remember in my opinion is that like this is for like FanJuel and DraftKings, sports prediction markets like it's a means to an end to be able to have a nationwide sports audience that you simply could not have a year ago. so whether you whether they truly see it as incremental or whether they see it as a focus, you know, it's quite hard to pass through that because obviously you get
the sort of the party line, if you will, in in earnings calls. but what it does mean, you know, I already mentioned the NFL season. Typically, you know, pretty much the biggest time for sports betting in the US. Maybe you have March Madness, you have Super Bowl, obviously, but like the start of a new NFL season and those few months between sort of September and December. huge, huge, huge time for sports betting, obviously. And whereas in past years, you know, FanJul and DraftKings are
Tom Nightingale (20:03.818)
have prime positioning to take advantage of that through their market share and their prominence in sports betting. Now, I mean we heard Penn Entertainment CEO Jay Snowden call this NFL season an arms race. You it's gonna be a real arms race and not only between sports books, but between these prediction market platforms as well. So I think it comes back to the question, you know, you the question you asked is how hard is it operate to a sports book in the US in 2026? I'll come back to what I said before, which is like, where's the meaningful growth coming from?
Now, really. Sports betting, okay, like FanJuel launched sports betting in Missouri in December. They were able to offer sports betting in Arkansas from March, which they couldn't do before. You move north of the border, like Alberta's just opened, which has obviously online sports betting and online casino. So like new markets are coming along, but like how much is being able to suddenly offer sports betting in Arkansas really gonna like move the needle for FanJuel, you know? Where's this meaningful growth coming from?
Charlie Horner (20:58.517)
Hm. W with apologies to our listeners in Arkansas.
Tom Nightingale (21:02.812)
With apologies, yeah, you'll have to put a disclaimer on the description of this episode. Arkansas slander included. but, you know, where's the the geographical expansion and the ability to raise the ceiling is really, really limited anyway, I think. And then you factor in prediction markets and this huge competition and all the spending that you're putting in to like build up FanGul Predicts alongside your existing operations, you know, it's it's
The game has changed, I think, really, at least in the short term. Whether like I said, whether or not this is still around in a year's time, I don't know. We'll talk about this so many more times on future episodes, but as we stand right now, it's kind of a different game to to to what what it was twelve, eighteen months ago.
Charlie Horner (21:45.633)
Yeah, I think there's even more pressure on operators now around this NFL season launch because y you asked where is the meaningful growth coming from. I think it's you have to capture customers in existing states that don't already sign up or have an account with with you. So th there's a lot of pressure on operators ahead of this NFL season. So we'll we'll we'll monitor that very closely, I'm sure. bringing it back to Flutter now and and FanJul Tom, we know that stock is down.
you know, around around sixty percent in the last twelve months. And there's there seems to be a a inconsistency in what in what the company's saying, really, because on one hand they're saying we're going to spend loads of money and invest in our products in the US to to do this a sports book improvement plan. Simultaneously they're also saying we're gonna do with a a two phased cost reduction programme. So are are investors actually sort of buying this sort of spend money to make money argument?
in the US? Or or is there gonna have to be some more cost reductions i in the United States as well?
Tom Nightingale (22:51.898)
I from Flutter's perspective, if you look at the raw the raw facts from the the share price, you'd have to say the investor's probably not buying it. I mean, you mentioned a sixty percent drop. Actually, I mean as of August the fifth, so I I got as of about the end of the day after Flutter when Flutter reported, I believe their share price was about ninety-four dollars. in August in late August twenty twenty five it was over three hundred dollars. So it's like a seventy percent drop in less than twelve months.
And I mean, we mentioned before, like when you're when you're s when you're slashing your full year earnings guidance in the US by twenty-two percent, you know, f pe Flutter and Fanjel remain pretty bullish that they'll get through this and it'll recover, but it you know, as trends go, it's not great, is it? it's interesting, I've read a couple of comments from analysts who who who who actually provide a bit of a counterpoint for this.
Charlie Horner (23:30.295)
Brutal.
Tom Nightingale (23:50.249)
Citizens Bank, there's a th they that you know, Jordan Bender is a quite prominent US gambling analyst. and he actually backed up a comment that Flutter made in their thing, which was that even though US adjusted Ebit Darth fell 70% from 400 million to 119 million, Flutter said that actually came in ahead of expectations after their prediction market investment and their investment in the new state launches that I mentioned earlier.
Jordan Bender for one as an analyst sort of backed that up and said that that that the US is, you know, the US reported Ebit Darthur Q2 was about 13% of what he ahead of what he was expecting. So is that because expectations were really low? Or is that because it's not as bad as it sounds like it is? I mean, I d I i it yeah, again, there's a lot of sort of posturing, I think, and a lot of papering over cracks maybe. But you when your stock's down 70% over 12 months, can you A
be surprised if investors aren't having that much confidence in the company and can you be be hugely surprised to come back to the start of this podcast, can you be hugely surprised about a change in leadership? I if that doesn't precipitate a change in leadership, then what does? You know you know?
Charlie Horner (25:06.229)
It's a fair question. It is a fair question. let's let's bring things towards a bit of a close now, Tom. I just want to sort of look at the long term outlook, because as we know, as you know, Dan Taylor's gonna start as Flutter CEO in October and Christian Gonetsky i is in as FanJul CEO. What next for Flutter and FanJul really in in in terms of its US strategy and and what do we need to pay attention to in terms of its long term outlook?
Tom Nightingale (25:36.959)
I mean big question, isn't it, you know. I think mostly the stu mostly the stuff we've touched on already, like how are they gonna navigate NFL season? How are they gonna hold on to their positioning? I've forgotten exactly what they said they reckon their market share is, in sports betting. I think it's ballpark, kinda like thirty percent, something like that. I can't quite remember the number off the top of my head. you know, how do you hold on to thirty nine percent it was, sorry.
the they they FanJul Flutter said that FanJul still holds 39% of US sports bidding by gross gaming revenue. Again, that's state regulated sports bidding. It's not not all the options that are available to you. But you know, so how are you going to hold on to that status through NFL season? how much of an impact is the A, the extra investment, 270 million they're going to put into the US business for the second half of the year. How does that
manifest itself in sort of customer experience? How does it manifest itself in, you know, by the time we get to full year results in in early 2027, you know, the big question would be has, you know, frankly, has that paid off? and the prediction markets thing, you know, I I I think that FanJulan is not alone in being at a bit of a crossroads really in terms of strategy. Do you funnel money into
Trying to recoup sports betting losses? Do you funnel money into online casino, which is growing across the board really for operators, at least compared to sports betting? Do you f continue to pump money into the value add of prediction markets and being able to offer sports in the states that you couldn't before against the backdrop of the fact that you might not be able to do this? Like if if if you can't do this in 12 months and all that FanJuel Predicts can offer is like trading on the price of gold?
w where's the you know, how much of a needle mover is that really, for a company who specializes in first daily fantasy sports, then online sports betting and on you know online casino. Is that really a worthwhile continuation? This isn't a question for now, but it also kind of is a question for now, right? in terms of Flutters perspective.
Charlie Horner (27:44.981)
When you're making those investment decisions it is a massive ch dise it's a massive decision you have to make now.
Tom Nightingale (27:49.739)
Well, exactly. And I you have to imagine these are all the questions that an investors you know, if I was an if I was a big investor in Flutter, it's a question I'd be asking is, you know, what do you have contingency plans? What are your priorities, you know? And I mean just to wrap it back round with, you know, I think that Flutter probably see Dan Taylor coming in as CEO as to use English football slash soccer terminology, kind of a safe pair of hands, you know?
moving into the role because he's been there for years. Peter Jackson did say that he's, you know, Dan Taylor's been very involved in all of the strategy work at Flutter, including on the US side, even though he's notionally been into you know in charge of international rather than rather than US. but make no bones about it, like his mission, Dan Taylor's mission, Christian Janetsky as FanJul CEO now replacing Amy Howe, like the
Their mission is to restore FanJuel's share price and to prove that even in today's world, a historic number one, number two like FanJul can maintain that positioning amid everything that's going on. Cause I just I've used the phrase the game has changed already, but it it's, you know. I would say right now a big picture in US gambling, very little.
at the moment is like it was before, you know? And it's it's how do you navigate what comes next while when without even without really sort of being able to say with certainty what does come next. it it it's a it's it's a just a fascinating time really for for online gambling in the US. And obviously you have FanJuel and DraftKings are at the forefront of it.
Charlie Horner (29:36.779)
Yeah, absolutely. Well, on the on the idea of comparing Dan Taylor with Sam Allardyce or Gus Hiddink, I think that's probably a a good place to to bring things towards a close. But I think this is genuinely the most fascinating story in in the industry right now is what happens with with Flutter after after so much change and so many challenges over the last twelve to eighteen months. So we'll continue to monitor those developments. But for now, Tom, thanks ever so much for breaking down this story with me.
Thanks to Optimu for supporting the show and to our listeners, thanks for tuning in to today's episode of iGaming Daily, and come back tomorrow to keep up to date with all the latest global gambling news.