FanDuel didn’t need to spend extravagantly to ascend to the top spot in New York.
Yet the online sports betting operator has held the top spot in market share for the past four weeks.
Caesars poured in an exorbitant amount of money in terms of advertising and promotional spend in NY to initially capture the No. 1 spot from Jan. 8-23. But once its ad and promo spend dropped, so did its market share.
For the most recent recorded week — Feb. 14-20 — FanDuel NY generated $130.6 million in online sports betting handle to Caesars’ $65.8 million.
That’s a stark contrast to Jan. 17-23, when Caesars New York online sportsbook reported $229.7 million in handle to FanDuel’s $159.6 million.
“New York for me is a great example. People got big market shares of handle because they were handing out free dollars,” Peter Jackson, CEO of FanDuel’s parent company Flutter Entertainment, said Tuesday on the company’s latest earnings call.
“But now you look at where the market shares have gone when people are actually reverting back to using the best product and FanDuel is now No. 1 in that market.”
FanDuel NY benefited from established DFS customer base
Flutter reported spending about 25% less than key competitors on marketing in the US, while still getting strong results. Jackson credited that success to a number of factors, including the ability to tap into existing daily fantasy sports users.
“I think from an acquisition cost perspective, we undoubtedly have always had an advantage in the market in terms of our ability to cross our customers form DFS in sports (betting). And that’s something we’ve made sure we really benefited from,” Jackson said.
“But the team have also been very disciplined when it comes to our marketing spend. It’s very easy to sort of get sucked into signing deals and partnerships, and you can spend a lot of money very needlessly. And there are some codes and opportunities that we’ve passed on which proved to be the right decision. … While we do spend more money than other people, we also think we spend it very wisely when we do.”
Jackson also pointed out the benefits of FanDuel’s same-game parlays, which have been a big hit with customers. But to the Flutter executive, having a superior product was the most significant factor.
“I think at the backside of that equation, looking at the LTVs (lifetime values), we obviously have a structure advantage of of the same-game parlay. And we’ve seen very substantial use of that among our customers which gives us a margin advantage,” Jackson said.
“But the fact that our retention levels are so high also helps with the lifetime values. And the reason we’re getting such good use of the parlay product, the reason we have such good retention, is because we have the best product in the market.”
Other NY online sportsbooks also high on market
Despite dropping to third in market share of late behind FanDuel and DraftKings, Caesars’ CEO Tom Reeg did note that the NY online sports betting launch far exceeded the operator’s expectations in the state.
According to Reeg, Caesars received twice the volume and market share compared to internal expectations.
Caesars was plagued by a multitude of early issues. The NY sportsbook has said it hopes to rectify going forward.
FanDuel also experienced a multi-hour outage over the weekend. A certified customer support Twitter account referred to it as “site maintenance.” The account apologized for customer inconvenience.