Flutter On Prediction Markets: 'A Number Of Routes To Market We Think We Could Access Quite Quickly'
FanDuel parent company talks at length about sports betting via prediction markets in Q&A for its Q1 earnings call.
FanDuel + prediction markets? Flutter — the parent company of the US sports betting leader — is clearly taking the possibility of legal nationwide sports betting seriously.
The topic of sports betting via prediction markets came up multiple times during Flutter’s Q1 earnings call on Wednesday afternoon. Perhaps the most interesting note came from CFO Rob Coldrake, talking about entering prediction markets, if Flutter chose to do so:
“On the exchange piece … we’ll not share any details. But we’ve clearly got the in-house expertise with Betfair, and we’re looking at the options closer. There’s a number of routes to market we think we could access quite quickly if we needed to.”
The chatter in the call focused on Flutter’s Betfair exchange product, which operates in a number of countries around the world.
Other pullouts:
CEO Peter Jackson: “We have brought some of our team who have experience in building these products and services from the Betfair exchange business and put them into FanDuel to help us evaluate the opportunity. So, look, we’re working through it.”
Jackson again: “I don’t think we’ve seen any impact from the prediction markets. Don’t forget though, the vast, vast majority of people are betting on parlays and this is just not something you can get close to experiencing in the States, if you look at the way the prediction markets are set up.
Here are the relevant parts of the Q&A from the call:
Question: … So the first question is on the prediction markets. Hoping, Peter, you could just address all the chatter out there and with the roundtable canceled what is the next sort of milestone or event that we should all sort of be keying in on the next, I don’t know, next weeks and months? …
Jackson: …. Let me start with the prediction markets question. I’ve said this to people before, but it’s worth reminding you, we do operate the world’s largest sports betting exchange. So we know this space well. The Betfair exchange has, for many years, given us very good insights in terms of how this stuff can play out.
And look, I think it tells us that you’ve got to be quite thoughtful about how exciting the exchange product can be when you have a fully fledged sports betting product available to you. We can see how important the parlay mix is to a US audience. And of course, you can’t access that in the same way with something like the exchange.
So we’re very thoughtful about it, particularly having seen so much success in terms of having the best product in the market. And I think that for existing states where sports betting is allowed, I’m not that confident that this will have a sort of significant impact. But I think there are new markets which could become available to customers in states where sports betting is already allowed. The political stuff is something that people talk about and other gamified markets as well. So look, we’re interested in the potential opportunity.
We have brought some of our team who have experience in building these products and services from the Betfair exchange business and put them into FanDuel to help us evaluate the opportunity. So, look, we’re working through it. Clearly, in states that haven’t regulated, there’s a sort of ‘prime the pump’ type of opportunity that is not that dissimilar to some of the DFS stuff, albeit it’s worth remembering that DFS is a really good precursor to the parlay product, where the prediction markets are quite limited. So look, we’re interested in potential opportunity. There’s puts and takes, we’re working our way through it.
Question: But I was just wondering just a quick one on the exchange. Is it fair to consider, I guess, one of your scenarios that you’re considering in terms of Betfair to register Betfair as a national exchange with the CFTC?
Jackson: Look, we’re not going to take you through all the details of how we’re thinking about attacking the prediction markets. There’s a bunch of different ways we can think about it. And when we’re ready to share that, we’ll tell people what we’re going to do. …
Coldrake: On the exchange piece … we’ll not share any details. But we’ve clearly got the in-house expertise with Betfair, and we’re looking at the options closer. There’s a number of routes to market we think we could access quite quickly if we needed to.
Question: One follow-up on the prediction and sweepstakes products in the US. Just curious if you’ve had to adjust any of your FanDuel pricing to compete? And do you think this is actually an opportunity to push the states for quicker legalization?
Or any other thoughts on how legalization can regain momentum? Thank you.
Jackson: Look, on the sort of legalization rollout, when we had our Investor Day, we talked about a couple of percentage points of adult population in this year, next year and the following year. And I think we remain confident we’re on track with that. So I think we feel reasonably good about that. If there is any benefit that we get from prediction markets encouraging faster rollout, we’ll take it, right?
We would love to make our products available more broadly to more customers. And then we offer the best prices for FanDuel in the market. I think it’s an important part of our strategy. We haven’t I don’t think we’ve seen any impact from the prediction markets. Don’t forget though, the vast, vast majority of people are betting on parlays and this is just not something you can get close to experiencing in the States, if look at the way the prediction markets are set up.