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SportsTranscript
00:00All right, let's get the latest earnings report from FanDuel, Flutter.
00:04You know, clearly it's been a strange year for sports betting, where the books, who generally are always winning, didn't necessarily happen over the last calendar year.
00:13What did their numbers indicate?
00:15Yeah, really interesting from Flutter's report about FanDuel in the first quarter.
00:20They noted that there's been this industry-wide slowdown in the rate at which people bet more and more.
00:27So essentially, handle growth has dropped off a lot.
00:31People are still betting more, but it's not at as high a rate as it used to be.
00:35You know, this NFL playoffs, it was about 18% growth year over year versus last year when it was 29%.
00:41And the year before that, when it was 51%, some investment banks are calling it the biggest concern in the industry right now,
00:48which, as you allude to, Craig, is pretty interesting considering, you know, sports books have just been getting crushed quarter to quarter,
00:54first on the NFL and March Madness.
00:56But when FanDuel announced their earnings, they said it really isn't a big concern for them, the drop-off in handle growth.
01:03And they had another really great quarter.
01:04They had revenue of over $1.6 billion, which was up 18%, and profit of $161 million, which was up over 520%.
01:15And that's even with the bad outcomes from March Madness costing about $200 million versus kind of what it expected to take there.
01:23So how did they pull it off?
01:25The executives talked about not paying attention to handle, but it's actually other metrics that are more important.
01:32Bet volume, active users, margins were all up at a very high rate.
01:37They held 14.1% on all the money they took.
01:41So essentially, that's kind of the margin they're working with there, the kind of the profit they're making on the front end of the sports book.
01:48Parlay growth was up about 2%.
01:50And promos, as a percentage of how much people bet, was down 4% as well.
01:55So management was very adamant about handle not really mattering as much as it used to.
02:01A lot of the times, companies could inflate their handle numbers by just giving out free bets and including it in the total amount of money that people bet.
02:08So Peter Jackson, the CEO of Flutter, actually said he doesn't even look at handle when he gets his daily reports.
02:16He looks at all these other metrics, which are very much up for FanDuel right now.
02:20You know, they're widening their market leading position to 48% on the quarter.
02:23They're doing very well, even despite, you know, some investment concerns from Wall Street, which seem to be more industry wide.
02:30Notably, they also said that they would be interested in launching prediction markets kind of if the dust clears and the states say it's okay, regulators say it's okay.
02:41Flutter also owns Betfair, which is a global betting exchange, which is pretty much the same thing as a prediction market.
02:48It just doesn't operate in the U.S.
02:49So they were vocal that, you know, should this be an avenue that becomes viable, we can do it very easily, very quickly, just like all these other companies have.
02:57But for the time being, they're going to kind of wait to see if we get more word from the CFTC, whether or not this stuff is okay.