Flutter Entertainment Plc · NYSE:FLUT
Flutter Entertainment — Investor Day (November 2022)
113 slides from Flutter Entertainment's investor day presentation, Nov 16, 2022
Slide 1: Capital Markets Day
CAPITAL MARKETS DAY 16 November 2022 x
Slide 2: Agenda
AGENDA 1 Introduction 2 Market Opportunity 3 FanDuel Advantage 4 Flutter Edge 5 iGaming Opportunity 6 FanDuel Financial Trajectory CAPITAL MARKETS DAY | NOVEMBER 2022 2
Slide 3: Introduction
INTRODUCTION Peter Jackson FLUTTER CHIEF EXECUTIVE OFFICER CAPITAL MARKETS DAY | NOVEMBER 2022 3
Slide 4: What I will cover
What I will cover 1 2 3 FLUTTER FLUTTER CREATING GROUP EDGE SHAREHOLDER VALUE Success of world’s Group capabilities Group strategy to #1 online gaming powering FanDuel’s deliver returns business success 4
Slide 5: Flutter Introduction: scale of world's #1 online gaming business
Flutter Introduction Unparalleled scale and success of world’s #1 online gaming business … 8.0m 1 £5.5bn 2 £1.4bn 2 PLAYERS REVENUE EBITDA Scale and diversification of the Group excluding the US provides resilient and robust model for growth 1. Players refer to pro forma Group ex-US Q3 2022 average
Slide 6: Extending scale and #1 position in the largest regulated markets
Flutter Introduction … extending scale and #1 position in the largest regulated markets UNITED STATES1 UK & IRELAND1 #1 #1 Sports Gaming Sports Gaming 42% 18% 40% 22% INTERNATIONAL AUSTRALIA1 Multiple top 3 positions #1 Sports 51% Flutter’s largest 15 markets by revenue Online sportsbook market shar
Slide 7: A diverse portfolio of products with a history of innovation
Flutter Introduction A diverse portfolio of products with a history of innovation SPORTSBOOK REVENUE REVENUE BY PRODUCT1 BY SPORT 3% 7% 8% 24% 36% 51% 6% 31% 11% 24% Sportsbook Racing Casino Soccer Poker Basketball Peer to peer sports American football Lottery Other 1. FY 2021 pro forma revenue 7
Slide 8: FanDuel was the premium US asset when PASPA was repealed
Flutter Introduction FanDuel was the premium US asset when PASPA was repealed in 2018 • Strong brand with nationwide footprint • > $400m invested in the brand • 7m registered players £4.3bn Flutter capital • 40% DFS market share invested in FanDuel to date2 • ~84% of customers betting on sports1 • C
Slide 9: Strengths and expectations from 2019 CMD have played out
Flutter Introduction Strengths and expectations from 2019 CMD have played out • Success to date demonstrates power of our positioning • Large market opportunity at 10x size of New Jersey • FanDuel uniquely positioned • Scale, brand, people, and product • Access to Flutter balance sheet and expertise
Slide 10: FanDuel's success is underpinned by Flutter's expertise and capabilities
Flutter Introduction FanDuel’s success is underpinned by Flutter’s deep expertise and capabilities CAPITAL TALENT SHARED TECHNOLOGY EXPERTISE 20+ years of online sports betting and gaming experience 10
Slide 11: In digital markets, being the leader matters
Flutter Introduction In digital markets, being the leader matters DIGITAL MARKET LEADERS FREQUENTLY ACHIEVE >2X RELATIVE MARKET SHARE Market share of #1 and #2 operators in digital markets (%) 2.6x 2.5x Relative market share 3.7x (#1/2 operators) 72 1.8x 2.1x 59 41 31 35 28 24 15 19 11 Market leader
Slide 12: Optimal group strategy to deliver long term shareholder value
Flutter Introduction Optimal group strategy to deliver long term shareholder value Build on our network and Grow our gold medal invest for leadership Invest to win in the US positions in our core positions across markets international markets US Group ex-US • Huge market opportunity • Diversified, s
Slide 13: Introduction to FanDuel
INTRODUCTION TO FANDUEL Amy Howe FANDUEL CHIEF EXECUTIVE OFFICER CAPITAL MARKETS DAY | NOVEMBER 2022 13
Slide 14: Our management team
FanDuel Introduction Our management team CHRISTIAN GENETSKI MIKE RAFFENSPERGER ANDREW SHEH DAVID JENNINGS President Chief Commercial Officer Chief Technology Officer Chief Financial Officer AMY HOWE Chief Executive Officer SARAH BUTTERFASS ANDY GIANCAMILLI CAROLYN RENZIN TRICIA ALCAMO Chief Product
Slide 15: Diverse product suite available in states
FanDuel Introduction Diverse product suite available in 48 states CORE PRODUCTS #1 SPORTSBOOK #3 ONLINE CASINO in 19 States1 in 5 States2 GAMES OF SKILL RACING & CONTENT in 44 states in 33 states & 45m homes #2 FANTASY SPORTS #1 IN RACING 1. Includes FanDuel online sportsbook states (AZ, CO, CT, IA,
Slide 16: Clear leadership position in online sportsbook
FanDuel Introduction We have built a clear leadership position in online sportsbook … ONLINE MARKET SHARE (GROSS GAMING REVENUE1)2 60% 50% 42% 40% 40% 33% 30% 24% COMPETITOR A 20% COMPETITOR B 15% 10% 3% 0% Q1-20 Q2-20 Q3-20 Q4-20 Q1-21 Q2-21 Q3-21 Q4-21 Q1-22 Q2-22 Q3-22 1. Gross Gaming Revenue (GG
Slide 17: #1 in almost every state in which we operate
FanDuel Introduction ... and we are #1 in almost every state in which we operate FANDUEL 2022 ONLINE SPORTSBOOK YTD GGR1 ($m) $428 $244 $181 $180 $143 $102 $95 $89 $87 $60 $65 $37 $30 $11 $1 NY NJ PA IL VA MI AZ TN IN LA CT WV CO IA WY ONLINE MARKET 46% 50% 50% 43% 45% 39% 37% 36% 38% 40% 47% 43% 28
Slide 18: We are now a $3bn revenue business
FanDuel Introduction We are now a $3bn revenue business … FANDUEL NET GAMING REVENUE1 78% $3.0bn CAGR 66% SPORTSBOOK 23% iGAMING $0.3bn 4% DFS 45% 42% 7% RACING & SPONSORSHIP 2018 2022E 1. Net Gaming Revenue (NGR) refers to revenue after deduction of promotional generosity Reported financials, exclu
Slide 19: Significant runway for growth
FanDuel Introduction … with significant runway for growth MARKET PROJECTED GGR1 4.5x $40.5bn $17.8bn iGaming $9.0bn $22.6bn Sportsbook $4.3bn $4.6bn LTM2 2030 Mature Market TAM % addressable US adult iGaming 12% 25% population in legal states Sportsbook 35% 80% 1. See detailed footnotes on page 32 2
Slide 20: The FanDuel Advantage driving our winning position
The FanDuel Advantage driving our winning position ACQUIRE RETAIN GROW CUSTOMERS MORE EFFICIENTLY CUSTOMERS FOR LONGER CUSTOMER VALUE #1 sports betting brand Betting product innovation Proprietary pricing and risk Database of 14m+ sports fans Best app experience Accurate, competitive odds Best marke
Slide 21: Benefitting from the Edge
BENEFITTING FROM THE EDGE CAPITAL TALENT SHARED TECHNOLOGY EXPERTISE >$1bn 30% 20+ years 6,000+ cash funding, of VPs and above of operations, technologists with global enabling pursuit of all come from Flutter with sustainably serving network of scalable and growth opportunities1 150+ years of colle
Slide 22: The FanDuel Advantage drives our flywheel
FanDuel Introduction The FanDuel Advantage drives our flywheel, creating a larger and more profitable business … SCALE 1 FanDuel Advantage INCREASED ADVANTAGE SCALE BEST underpins best customer SCALE AND CUSTOMER FLEXIBILITY ADVANTAGE PROPOSITION offering 3 In turn allowing us to invest more in prod
Slide 23: Potential to deliver ~5x 2022 revenue at maturity
FanDuel Introduction … with potential to deliver ~5x 2022 revenue at maturity, at margins similar to other divisions Our scale advantage is FanDuel’s scale and competitive compounding each year, driving a advantages can deliver long-term pathway to 4.5 – 5x 2022 EBITDA margins of 25% – 30%, revenue
Slide 24: Market Opportunity
MARKET OPPORTUNITY Christian Genetski PRESIDENT CAPITAL MARKETS DAY | NOVEMBER 2022 24
Slide 25: Significant scope for further expansion
Significant scope for further expansion 1 2 PROGRESS TO DATE UNLOCKING FUTURE GROWTH THE MARKET Impressive market value Huge runway for growth with OPPORTUNITY RETAIN already unlocked significant long term CUSTOMERS addressable market FOR LONGER XXX 25
Slide 26: We have invested significantly in resource and expertise
Market Opportunity 1. Today 2. Future We have invested significantly in resource and expertise to get to where we are Supreme court repeals PASPA in May FanDuel founders launch US DFS business FanDuel leads coalition lobbying FanDuel leads coalition lobbying to open 17 online sports betting1 to pass
Slide 27: Our market advocacy seeks to achieve two primary goals
Market Opportunity 1. Today 2. Future Our market advocacy seeks to achieve two primary goals 1 2 UNLOCK NEW MARKETS OPTIMIZE REGULATORY ENVIRONMENT Open up sportsbook and iGaming states IN EXISTING STATES to protect consumers from illegal Push for optimal tax structures operators and create value fo
Slide 28: Impressive market value unlocked since PASPA repeal
Market Opportunity 1. Today 2. Future Impressive market value already unlocked since PASPA repeal … US ONLINE SPORTSBOOK MARKET GGR1 Existing States $4.6bn New States 25% $3.3bn 23% 75% $1.0bn 77% 22% $0.3bn $0.1bn 78% 3 2018 2019 2020 2021 LTM ADDRESSABLE POPULATION2 3% 10% 18% 27% 35% Michigan Pen
Slide 29: A mostly balanced regulatory environment
Market Opportunity 1. Today 2. Future … in a mostly balanced regulatory environment Mobile Pre-live Direct State technology 33.2% effective tax registration registration licensing harmonization rate1 Removing friction Enabling faster Reducing cost of Reducing Providing in customer new state market a
Slide 30: Increased upside from greater population coverage
Market Opportunity 1. Today 2. Future Increased upside from greater population coverage as new states go live … 2.3x INCREASE IN SPORTSBOOK1 2.2x INCREASE IN iGAMING1 2.3x 80.0% 34.6% 2.2x 25.0% 11.5% 1 LTM 2 2030 1 LTM 2 2030 A Resulting in 2.3X increase in population coverage across both products
Slide 31: Increased population penetration in existing states
Market Opportunity 1. Today 2. Future … and increased population penetration in existing states with more recreational customers … 2.2x INCREASE IN SPORTSBOOK 1.8x INCREASE IN iGAMING 2.5x 2.0x 2.2x 1.8x Adult penetration Value discount for Growth in TAM Adult penetration Value discount for Growth i
Slide 32: Leading to massive long-term potential
Market Opportunity 1. Today 2. Future … leading to massive long-term potential MARKET PROJECTED GGR Adjustments from prior slides $40.5bn 2.3x A population coverage $17.8bn iGaming x 4.5x 2.0x B population penetration $9.0bn $22.6bn Sportsbook $4.3bn $4.6bn LTM1 2030 Mature Market TAM2,3 1. GGR sour
Slide 33: FanDuel Advantage
FANDUEL ADVANTAGE Mike Raffensperger CHIEF COMMERCIAL OFFICER Conor Farren SVP SPORTS PRODUCT & PRICING CAPITAL MARKETS DAY | NOVEMBER 2022 33
Slide 34: The FanDuel Advantage driving our winning position
The FanDuel Advantage driving our winning position ACQUIRE CUSTOMERS MORE + RETAIN CUSTOMERS FOR + GROW CUSTOMER EFFICIENTLY LONGER VALUE 24% lower cost per 77% year-on-year 43% more margin per $1 download vs. competitor1 customer retention2 of handle vs. the market3 … combining to deliver < 18 mont
Slide 35: How we are driving efficient customer acquisition
How we are driving efficient customer acquisition 1 2 3 STRONGEST HEAD START MARKETING BRAND ADVANTAGE NETWORK ACQUIRE CUSTOMERS MORE #1 sports betting Database of 14m+ Portfolio of the EFFICIENTLY brand in the US racing and DFS fans best media assets UNDERPINNED BY A HIGHLY DISCIPLINED APPROACH XXX
Slide 36: Invested $2.5bn in marketing to be #1 brand
Acquire 1. Brand 2. Head Start 3. Marketing Invested $2.5bn in marketing over the past 10 years to be #1 brand UNAIDED BRAND AWARENESS CUMULATIVE MARKETING IN LIVE STATES (VS COMPETITORS)1 INVESTMENT SINCE 2012 UNAIDED BRAND AWARENESS IN LIVE STATES 2012 60% 58% 42% 2018 $500m 29% 10% 2022E 8% 7% $2
Slide 37: Our customers are our most efficient acquisition channel
Acquire 1. Brand 2. Head Start 3. Marketing Our customers are our most efficient acquisition channel 2022 ACTIVATIONS BY SOURCE 25% Referrals 75% Other Channels Customer acquisition cost (CAC) for referrals is 60% lower than other channels, with opportunity growing as we scale 37
Slide 38: Leveraging customer database to drive sportsbook acquisition
Acquire 1. Brand 2. Head Start 3. Marketing Leveraging customer database to drive sportsbook acquisition efficiency + DATABASE DELIVERS DIFFERENTIATED GROWTH OPPORTUNITIES 14m + Cumulative registered DFS and racing accounts ~6.3m in live sportsbook states ~8.2m in non-live sportsbook states 2013 202
Slide 39: Continually improving playbook for new states
Acquire 1. Brand 2. Head Start 3. Marketing Continually improving playbook for new states FANDUEL’S PENETRATION RATE HAS ACCELERATED IN RECENT STATE LAUNCHES1,2 6% Cumulative Activations as a % of a live state’s adult population (21+) 6.0% 5% 4.8% 4.4% 4% 3.5% 3% States launched in 2022 1.8% 2% Stat
Slide 40: Partnerships create a barrier to entry
Acquire 1. Brand 2. Head Start 3. Marketing Depth and breadth of partnerships create a barrier to entry for other operators LEAGUE PARTNERSHIPS TEAM PARTNERSHIPS WHAT THIS GIVES US … Sports partnerships across all major US leagues and teams 40
Slide 41: Access to media assets drives superior return
Acquire 1. Brand 2. Head Start 3. Marketing Access to media assets drives superior return on investment ACCESS TO NATIONAL 40% SHARE OF VOICE ACROSS MEDIA ASSETS REGIONAL SPORTS NETWORKS1 WHAT THIS GIVES US … Powerful mix of local and national media assets 1. FanDuel portion of all RSN sports media
Slide 42: Betting influencer talent creates a network effect
Acquire 1. Brand 2. Head Start 3. Marketing Broad portfolio of betting influencer talent creates a hard to replicate network effect Pat McAfee Kay Adams Rob Gronkowski Charles Barkley (NBAonTNT) Jordan Spieth 2.6M 509K 3.2M 5M 2M Boomer Esiason Bill Simmons Jon Rothstein Dr. Disrespect Amanda Serran
Slide 43: FanDuel TV betting entertainment hub
Acquire 1. Brand 2. Head Start 3. Marketing FanDuel TV is a first of its kind betting entertainment hub and second screen experience TV NETWORK LIVE STREAMING 1 2 3 REINTRODUCE GROW THE FANDUEL EXPAND WAGERING TO NEW RACING BRAND SPORTS EXCLUSIVE ACCESS TO KEY ADDED INTERNATIONAL NEW SHOWS FEATURING
Slide 44: Media efficiency at national scale
Acquire 1. Brand 2. Head Start 3. Marketing Media efficiency at national scale will drive marketing rates closer to mature markets COST TO BUY NFL ADVERTISING1 Local NATIONAL EFFICIENCY National BENEFITS -29% +53% Media savings of 27% on linear TV spend in existing states2 Activations up 23% first w
Slide 45: FanDuel is winning the customer acquisition battle
Acquire FanDuel is winning the customer acquisition battle 19% MORE APP DOWNLOADS … … WITH 9% LESS MARKETING SPEND App Downloads (m, YTD) Marketing Spend ($m, YTD)1 +19% -9% 3.3 803 727 2.8 DraftKings A COMPETITOR FanDuel DraftKings A COMPETITOR FanDuel … resulting in < 18 months average customer pa
Slide 46: How we are driving efficient customer retention
How we are driving efficient customer retention 1 2 3 BEST BETTING THE BEST DISCIPLINED PRODUCT APP PROMOTIONS RETAIN Greater choice and A single account & wallet, Delivering the right CUSTOMERS FOR LONGER flexibility for our easy-to-use interface, and value to the right customers innovation pipelin
Slide 47: What we mean by 'betting products'
Retain 1. Product 2. Best App 3. Promotions What we mean by ‘betting products’ Same Game Parlay Same Game Parlay+ Straight Bet Parlay (SGP) (SGP+) “Bills to win & “Bills to win, ‘Buffalo Bills & ‘Buffalo Bills to Win’ Josh Allen 2+ Josh Allen 2+ TDs & Phoenix Suns to win’ touchdowns” Suns to win” SI
Slide 48: Pricing and risk management deliver what customers want
Retain 1. Product 2. Best App 3. Promotions Pricing and risk management capabilities allow us to deliver what customers want FANDUEL HAS THE MOST PRE-LIVE NBA MARKETS1 DELIVERING … Choice Widest range of markets across major US sports2 1.6x 3x Flexibility More bet combinations Great odds Highly comp
Slide 49: Innovating ahead of the competition: Same Game Parlay
Retain 1. Product 2. Best App 3. Promotions Innovating ahead of the competition e.g., Same Game Parlay 2019 2020 2021 2022 SGP+ Live SGP Same Game Parlay New SGP user One-tap popular SGP Cash Out (SGP) interface SGPs Live Bet Tracking COMPETITOR A (Mostly 3rd party) ≈ 4 out of 5 customers in 2022 ha
Slide 50: A superior app experience across three pillars
Retain 1. Product 2. Best App 3. Promotions We deliver a superior app experience across three pillars SINGLE ACCOUNT FOR ALL SIMPLE & CONSISTENT DELIVERY OF FANDUEL PRODUCTS EASY-TO-NAVIGATE APP NEW & EXCITING FEATURES 50
Slide 51: A single account and wallet drives cross-sell
Retain 1. Product 2. Best App 3. Promotions A single account and wallet across all FanDuel products drives cross-sell ONE APP: ONE ACCOUNT: ALL STATES ALL PRODUCTS 1 in 4 56% Sportsbook customers FanDuel customers have been active in 2+ States1 engage with 2+ products2 1. Jan 2018 – Oct 2022 2. Jan
Slide 52: Simple and easy-to-navigate app
Retain 1. Product 2. Best App 3. Promotions Simple and easy-to-navigate app makes it easy for customers to find what they want EASY TO LOCALIZED BUILD SGPs HOMEPAGE BY STATE 2.8m 66% SGP bets of NFL bets on Super Bowl LVI placed from homepage1 1. Percentage of handle, Jan – Oct 2022 Private & Confid
Slide 53: Consistently adding distinctive and exciting features
Retain 1. Product 2. Best App 3. Promotions Consistently adding distinctive and exciting features REAL-TIME RACING INTEGRATION BET TRACKING INTO SPORTSBOOK Player market leg-by-leg 3.8m tracking active sportsbook users now one tap away from racing1 1. Jan – Oct 2022 sportsbook actives Private & Conf
Slide 54: The #1 rated app by users and industry experts
Retain 1. Product 2. Best App 3. Promotions Delivers the #1 rated app by users and industry experts #1 Rated sports betting app by customers RATING 4.8 / 5 RATING 4.7 / 5 700K Reviews 120K Reviews #1 Rated sports betting app by “ On many apps, you’ve to look far & wide for what you want. But on FanD
Slide 55: Promotional generosity is a material driver of performance
Retain 1. Choice 2. Best App 3. Promotions Promotional generosity is a material driver of business performance A SIGNIFICANT AREA OF INVESTMENT FOR THE INDUSTRY … ACQUISITION RETENTION ENHANCE EXCITEMENT 55
Slide 56: Our promotions engine drives more efficient spend
Retain 1. Choice 2. Best App 3. Promotions Our sophisticated promotions engine drives more efficient spend KEY EFFICIENCY DRIVERS % OF REVENUE SPENT ON PROMOTIONS (2022)2 AUTOMATED 64% 95% of campaigns automated via proprietary Flutter Global Promotions Platform1 FLEXIBLE 44% Thousands of tests run
Slide 57: Case study: product focus and disciplined promotions
Retain Case study: Product focus and disciplined promotions drive our leading position FANDUEL VS COMPETITOR OFFERS NEW YORK MARKET SHARE OF HANDLE1 FanDuel 40% 38% 31% Competitor C 13% AT LAUNCH OCT ‘22 FanDuel national media spend Significantly more disciplined Product gap 6X lower in month of lau
Slide 58: More revenue per dollar spent, 77% retention
Retain Efficient promotional spend resulting in more revenue per dollar spent REVENUE PER $1 MARKETING SPEND1 1.8X COMPETITOR A … with 77% YOY customer retention2 1. Q3 2022. Marketing per competitor filings with adjustment to remove share based payments and depreciation and amortization 2. 2021 act
Slide 59: How we are growing customer value
How we are growing customer value 1 2 ACCURATE ODDS WIN MARGIN ADVANTAGE The leading operator Proprietary capabilities driving GROW in proprietary odds-making structural margin advantage CUSTOMER VALUE XXX 59
Slide 60: World class pricing and risk management capability
Grow 1. Accurate Odds 2. Win Margin We have a world class pricing & risk management capability 1000+ specialists across Flutter generate odds and build pricing & risk mgmt. tools • 20+ years odds-making experience 200+ FanDuel employees focused on US sports • Highly integrated across Product, Commer
Slide 61: What is pricing and risk management?
Grow 1. Accurate Odds 2. Win Margin What is pricing and risk management? SET & MANAGE INNOVATE SEGMENT THE ODDS BETTING PRODUCT CUSTOMERS • Use historical data to build pricing • Develop new betting products • Identify “sharp” customers models based on customer trends, to inform odds accuracy • As a
Slide 62: Specialist capabilities used to predict probabilities
Grow 1. Accurate Odds 2. Win Margin Specialist capabilities and complex data are used to accurately predict probabilities SETTING ACCURATE ODDS IS A COMPLEX TASK …THAT ENABLES A NUMBER INVOLVING MULTIPLE CORE INPUTS… OF BENEFITS 1. Skilled traders TRADE & MODELING Better win margins plus decades TRA
Slide 63: Accurate probabilities enable competitive odds
Grow 1. Accurate Odds 2. Win Margin Accurate probabilities and odds enable us to confidently offer highly competitive odds + “VIG” (OVERROUND) = ODDS YOU SEE TRUE PROBABILITY Confidence in our true … Allows us to set a lower … Providing, on average, probabilities … “vig” than the competition … bette
Slide 64: Proprietary pricing delivers more choices
Grow 1. Accurate Odds 2. Win Margin Proprietary and accurate pricing also delivers more choices for customers FANDUEL HAS THE MOST … AND NEWER BETTING PRODUCTS PRE-LIVE NBA MARKETS …1 GENERATE HIGHER MARGIN HIGHER Same Game Parlay+ MARGIN (SGP+) 1.6x Same Game Parlay 3x (SGP) Parlay LOWER MARGIN Str
Slide 65: Increased choice and flexibility drives higher margin
Grow 1. Accurate Odds 2. Win Margin Increased choice and flexibility drives higher margin for FanDuel MORE CHOICE = MORE PARLAYS + WITH MORE LEGS = BETS AT HIGHER ODDS % of bets on player markets % of bets that are a parlay Average legs in a parlay Average odds of online bets (NFL, NBA, MLB) +32% +5
Slide 66: 43% more margin per dollar of handle
Grow 1. Accurate Odds 2. Win Margin We generate 43% more margin per dollar of handle Market average revenue from a bet +43%1 Highly competitive odds Proprietary odds Accurate pricing Greater share of parlays Choice & flexibility Greater number of legs per parlay FanDuel revenue from a bet 1. Analysi
Slide 67: We have continued to expand our margin lead
Grow 1. Accurate Odds 2. Win Margin We have continued to expand our margin lead FANDUEL US ONLINE GROSS REVENUE MARGIN VS. REST OF MARKET 1 10.0% Full-year FanDuel 2022E Rest of Market 9.1% 9.7% 7.3% 6.7% 6.8% 6.8% 6.4% 5.9% 2019 2020 2021 2022 (Jan - Sep) Proprietary capabilities will continue to e
Slide 68: Clear path to higher gross win margins
Grow 1. Accurate Odds 2. Win Margin Clear path to higher FanDuel gross win margins 10% 2022E gross win 12% margin1 2025 target gross win margin Innovation in Preserving customer Disciplined focus product driving value by continuing to XXX 1 on improving odds accuracy 2 further new market 3 offer hig
Slide 69: Conclusion: the FanDuel Advantage
Conclusion – The FanDuel Advantage delivers < 18 month average customer payback ACQUIRE RETAIN GROW CUSTOMERS MORE EFFICIENTLY CUSTOMERS FOR LONGER CUSTOMER VALUE #1 sports betting brand Betting product innovation Proprietary pricing and risk Database of 14m+ sports fans Best app experience Accurate
Slide 70: The Flutter Edge
THE FLUTTER EDGE Amy Howe CHIEF EXECUTIVE OFFICER Andrew Sheh CHIEF TECHNOLOGY OFFICER CAPITAL MARKETS DAY | NOVEMBER 2022 70
Slide 71: Benefits from Flutter Group provide competitive advantage
Benefits we gain from Flutter Group provide unique competitive advantage 1 2 3 4 CAPITAL TALENT EXPERTISE TECHNOLOGY FLUTTER Cash funding to Global network of EDGE RETAIN fuel FanDuel scalable and reliable CUSTOMERS expansion proprietary FOR LONGER Key assets underpinning platforms FanDuel Advantage
Slide 72: Capital funded FanDuel's growth and leadership position
Flutter Edge 1. Capital 2. Talent & Expertise 3. Technology Capital funded FanDuel’s growth and leadership position Cumulative cash #1 market position with investment of >$1bn1 revenue of $3bn in 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 Provided FanDuel with Empowered FanDuel to Encour
Slide 73: Unique asset of 20,000+ global specialists
Flutter Edge 1. Capital 2. Talent & Expertise 3. Technology Unique asset of 20,000+ global sports betting and iGaming specialists Pipeline of talent to help Pipeline of seed FanDuel’s experts to seed rapid scaling ofAccess FanDuel toteams deep breadth of expertise rapidly expanding business across k
Slide 74: Flutter Positive Impact Plan to empower sustainability at FanDuel
Flutter Edge 1. Capital 2. Talent & Expertise 3. Technology Taking insights from Flutter Positive Impact Plan to empower sustainability at FanDuel • Significant resource allocated to FLUTTER’S GLOBAL CUSTOMERS ensuring customer play is sustainable FRAMEWORK PLAY WELL • Developing market-leading resp
Slide 75: Flutter Edge is driving key technology benefits
Flutter Edge 1. Capital 2. Talent & Expertise 3. Technology Flutter Edge is driving key technology benefits 1 2 3 PROPRIETARY INTEGRATED GLOBAL TECH FLUTTER PLATFORMS TALENT TECHNOLOGY RETAIN Reliable core platform Head start over the Access to CUSTOMERS to handle scale and international network com
Slide 76: Why having the right technology is critical
Flutter Edge 1. Capital 2. Talent & Expertise 3.3.Technology Expertise Why having the right technology is critical BUILDING TECHNOLOGY IN BUT WE ARE DELIVERING OUR INDUSTRY IS DIFFICULT STRONG RESULTS1 Customers, transactions, and new 4.7bn+ VOLUME Sports and Casino bets markets COMPLEX Bespoke stat
Slide 77: Progress building our core proprietary stack
Flutter Edge 1. Capital 2. Talent & Expertise 3. Technology PROPRIETARY Significant progress made in building our core proprietary stack 3RD PARTY FLUTTER PLATFORM 2018 2022 PRODUCT Sportsbook Games of Skill Sportsbook Games of Skill PLATFORMS iGaming Racing iGaming Racing CORE Account & Wallet Acco
Slide 78: Flutter proprietary platforms developed over 10+ years
Flutter Edge 1. Capital 2. Talent & Expertise 3. Technology Leveraging integrated Flutter platforms key to our technology advantage ‘091 ‘14 ‘15 ’16 PRICING & RISK SPORTSBOOK PROMOTIONS iGAMING MANAGEMENT PLATFORM PLATFORM PLATFORM PLATFORM Accurate pricing and Development of innovative Personalizat
Slide 79: Supported by a global talent network of technologists
Flutter Edge 1. Capital 2. Talent & Expertise 3. Technology We are supported by a global talent network of Flutter technologists ~ 1,000 in North America ~ 2,000 in UK&I ~ 2,500 in Rest of Europe ~ 6,000 technologists Globally ~ 1,000 focused solely on FanDuel Group ~ 500 in Asia Pacific 79
Slide 80: Scalable, efficient and stable technology platforms
Flutter Edge 1. Capital 2. Talent & Expertise 3. Technology This edge allows us to build scalable, efficient and stable technology platforms HIGHLY SCALABLE TECH STACK SUPPORTS GROWING BET COUNT …1 … WITH DECLINING COST PER BET2 Bet Count Average Cost per Bet ($) -46% 2.2x 2021 2022 2021 2022 … and
Slide 81: Maintaining performance as we grow
Flutter Edge 1. Capital 2. Talent & Expertise 3. Technology Maintaining performance as we grow Bets / min.3 Bets / min.3 Week 9 NFL 2022 Orders / min.2 Super Bowl 2022 Trades/ min.1 (2022) (June 2020) ~9K ~35K ~52K ~70K 1. Assumes 8 hours of trading/day; straight-line average of daily average to cal
Slide 82: Recap: benefits of the Edge
RECAP: BENEFITS OF THE EDGE CAPITAL TALENT SHARED TECHNOLOGY EXPERTISE >$1bn 30% 20+ years 6,000+ cash funding, of VPs and above of operations, technologists with global enabling pursuit of all come from Flutter with sustainably serving network of scalable and growth opportunities1 150+ years of col
Slide 83: iGaming Opportunity
iGAMING OPPORTUNITY CAPITAL MARKETS DAY | NOVEMBER 2022 83
Slide 84: iGaming provides attractive additional growth opportunity
iGaming provides attractive additional growth opportunity to sportsbook 1 2 3 FANDUEL iGAMING EARLY THE iGAMING CASINO TODAY STRATEGY INDICATIONS OPPORTUNITY RETAIN CUSTOMERS Success driven by Focus on improving Initial results are FOR LONGER cross-sell from US proposition for iGaming positive, and
Slide 85: Successful at cross-selling sportsbook players to iGaming
iGaming 1. Today 2. Strategy 3. Results To date, we have been very successful at cross-selling sportsbook players to iGaming #1 41 40%% 18% Sportsbook in US Avg. Monthly Share Position2 Cross-Sell Rates (Sportsbook to iGaming)1 Driven by prioritization of our sportsbook strategy 1. Sportsbook monthl
Slide 86: Increasing focus on iGaming direct customers
iGaming 1. Today 2. Strategy 3. Results We are now increasing focus on iGaming direct customers Sportsbook iGaming Direct Cross-sell Customer1 Customer1 Majority of customer Majority of customer handle on iGaming handle on sportsbook 2030 TAM SPLIT (DIRECTIONAL) Male More balanced oriented gender mi
Slide 87: Clear iGaming strategy
iGaming 1. Today 2. Strategy 3. Results Clear iGaming strategy which we have begun to execute BRAND PRODUCT PROMOTIONS TALENT & iGAMING EXPERTISE STRATEGY Grow differentiated Improve breadth Develop engaging Built the most FanDuel Casino of product and innovative experienced iGaming brand offerings
Slide 88: FanDuel well positioned to grow differentiated iGaming brand
iGaming 1. Today 2. Strategy 3. Results FanDuel well positioned to grow differentiated iGaming brand FANDUEL CASINO BRAND ALREADY … AND NEW BRANDING, WITH MORE TO RESONATES WITH iGAMING CUSTOMERS … COME, WILL FURTHER IMPROVE POSITIONING Intent to use iGaming app1 45% 46% 46% 30% FanDuel Casino Brand
Slide 89: Product improvements to match iGaming customer preferences
iGaming 1. Today 2. Strategy 3. Results Product improvements to match the preferences of iGaming direct customers SIGNIFICANTLY INCREASED … INCLUDING MAJORITY OF THE GAMES NUMBER OF GAMES OFFERED … THAT MATTER TO CUSTOMERS1 +49% Coverage of top 25 Eilers & <50% 85% 90%+ Jan 2022 Nov 2022 Krejcik gam
Slide 90: Building innovative and engaging promotion tools
iGaming 1. Today 2. Strategy 3. Results We are focused on building innovative and engaging promotion tools FLUTTER + FANDUEL DELIVERING IMPROVED INNOVATIVE MECHANICS + = PROMOTIONAL ENGINE RETENTION RATES Casino led MoM Retention Rates Rewards delivered and ready to use in real time 2022 2021 Value
Slide 91: Right team to deliver this strategy
iGaming 1. Today 2. Strategy 3. Results We have built the right team to deliver this strategy, leveraging the Flutter edge WE HAVE TRANSFERRED TALENT FROM FLUTTER … AND WE WILL CONTINUE TO LEVERAGE TO BUILD OUR LEADERSHIP TEAM … CAPABILITIES FROM ACROSS THE GROUP Shared insight of #1 iGaming brands
Slide 92: Initial results from our strategy are encouraging
iGaming 1. Today 2. Strategy 3. Results Initial results from our strategy are encouraging … ACQUISITION OF DIRECT IGAMING … AND PLAYER ENGAGEMENT & CUSTOMERS IS INCREASING1 … RETENTION IS IMPROVING2 +55% +77% Q3 2021 Q3 2022 Q3 2021 Q3 2022 1. Like-for-like states activation of direct iGaming custom
Slide 93: Much more to come over the next 12 months
iGaming 1. Today 2. Strategy 3. Results … and there is much more to come over the next 12 months BRAND PRODUCT PROMOTIONS Further establish the Deliver 100% coverage Launch new innovative forms FanDuel Casino brand of games that matter of promotions Create iGaming tentpole Continue user Increase usa
Slide 94: FanDuel Financial Trajectory
FANDUEL FINANCIAL TRAJECTORY David Jennings CHIEF FINANCIAL OFFICER CAPITAL MARKETS DAY | NOVEMBER 2022 94
Slide 95: Overview of our financial trajectory
Overview of our financial trajectory 1 2 3 REVENUE GROWTH SHAPE OF LEVERAGING OUR FINANCIAL POTENTIAL THE MARKET FLYWHEEL TRAJECTORY RETAIN A path for FanDuel to Creating barriers to entry Focus on near-term CUSTOMERS increase revenues with high market share profitability and longer- FOR LONGER 4.5
Slide 96: The shape of the P&L for an online operator
Financial Trajectory Reminder: The shape of the P&L for an online operator ... Handle x Gross Win Margin = Gross Gaming Revenue (GGR) – Promotional Generosity = Net Gaming Revenue (NGR) – Cost of Sales = Gross Profit – Marketing = Contribution – Other OpEx incl. SBP1 = EBITDA FanDuel Advantage and F
Slide 97: The FanDuel Advantage built a $3bn net revenue business
Financial Trajectory 1. Revenue 2. Market 3. Flywheel The FanDuel Advantage has helped build a $3bn net revenue business today … AND IS EXPECTED TO DELIVER FANDUEL HAS >2M MONTHLY ACTIVE CUSTOMERS … ~$3BN NET REVENUE IN 2022 FanDuel AMPs (m) FanDuel NGR ($m) 58% 2.3 84% $3,000 CAGR CAGR 0.6 $481 201
Slide 98: Over $40bn TAM by 2030
Financial Trajectory 1. Revenue 2. Market 3. Flywheel Potential size of market: Over $40bn TAM by 2030 MARKET PROJECTED GGR $40.5bn $17.8bn 4.5x iGaming $9.0bn $22.6bn Sportsbook $4.3bn $4.6bn LTM1 2030 Mature Market TAM2,3 FanDuel Group net revenue $3bn today3, significant growth potential 1. GGR s
Slide 99: Evolving shape of US market underlines importance of scale
Financial Trajectory 1. Revenue 2. Market 3. Flywheel Evolving shape of US market underlines importance of scale NY launch at 51% FANDUEL COST OF SALES AS A % OF NGR tax rate • Cost of sales in US account for half of 50% revenues 43% 43% • Remaining 50% of revenue must cover all other costs, leaving
Slide 100: Higher market share concentration likely
Financial Trajectory 1. Revenue 2. Market 3. Flywheel Higher market share concentration likely TOP 3 OPERATOR MARKET SHARE CONCENTRATION • In Australia, top 3 players account for 87% 87% share 78% 81% • US is already at these levels in online sportsbook • Significant gap between number 1 1 1 2 and 2
Slide 101: We will leverage our flywheel to compound our leadership
Financial Trajectory 1. Revenue 2. Market 3. Flywheel We will leverage our flywheel to compound our leadership position SCALE 1 FanDuel Advantage INCREASED ADVANTAGE SCALE BEST underpins best customer SCALE AND CUSTOMER FLEXIBILITY ADVANTAGE PROPOSITION offering 3 In turn allowing us to invest more
Slide 102: What does our relative scale advantage look like today?
Financial Trajectory 1. Revenue 2. Market 3. Flywheel What does our relative scale advantage look like today? FANDUEL NET REVENUE VS. COMPETITORS FanDuel Competitor A $3,000 Competitor B $2,175 $1,800 $1,296 $1,300 $800 $814 $644 $481 $432 $313 $308 $161 NA NA 2018 2019 2020 2021 2022E Our scale adv
Slide 103: Quantum and efficiency of sportsbook promotions
Financial Trajectory 1. Revenue 2. Market 3. Flywheel Quantum and efficiency of sportsbook promotions is difficult for competitors to match …ENABLING >$850M INVESTMENT HIGHER GROSS WIN MARGINS… IN CUSTOMER PROMOTIONS IN 2022 FanDuel US online sportsbook win margins FanDuel US online sportsbook promo
Slide 104: Scale of marketing investment reinforces leadership
Financial Trajectory 1. Revenue 2. Market 3. Flywheel Sheer scale of marketing investment (>$1bn) reinforces our leadership position FANDUEL SALES & MARKETING ($m) 81% $1,100 CAGR $827 $381 $185 2019 2020 2021 2022E Combined investment in promotional generosity and marketing of over $2bn1 in 2022 Fa
Slide 105: Highly efficient spend driving impressive returns
Financial Trajectory 1. Revenue 2. Market 3. Flywheel Combined with highly efficient spend driving impressive returns FANDUEL GENERATED >$1BN REVENUE VS. OUR NEAREST COMPETITOR … … WHILE SPENDING $200M LESS ON MARKETING Cumulative NGR ($bn), 2019 to H1 2022 Cumulative Marketing ($bn), 2019 to H1 202
Slide 106: Scope for operating leverage through marketing line
Financial Trajectory 1. Revenue 2. Market 3. Flywheel Huge scope to drive further operating leverage through marketing line DRIVERS OF FANDUEL’S MARKETING AS A % OF NET REVENUE IMPROVED EFFICIENCY 74% 72% Heightened brand 56% awareness Competitor A2 48% 46% 45% 37% FanDuel1 National marketing 38% 18
Slide 107: Headline contribution growth disguises embedded value
Financial Trajectory 1. Revenue 2. Market 3. Flywheel Headline contribution growth disguises true scale of embedded value being built FANDUEL CONTRIBUTION ($m) $400 $201 $148 $73 2019 2020 2021 2022E But to be profitable, our contribution needs to fund and exceed our investment in opex ... FanDuel d
Slide 108: The cohort view gives confidence in path to profitability
Financial Trajectory 1. Revenue 2. Market 3. Flywheel The cohort view is what gives us confidence in our path to profitability... CONTRIBUTION MARGIN BY CUSTOMER COHORT1,2 ($M) 2018 Cohort 2019 Cohort 2020 Cohort 2021 Cohort 2022 Cohort 64k activations 285k activations 671k activations 1.6m activati
Slide 109: Making progress on operating leverage
Financial Trajectory 1. Revenue 2. Market 3. Flywheel Making progress on operating leverage OPERATING LEVERAGE AS BUSINESS HAS SCALED… … ONGOING DRIVERS FanDuel OpEx as a % of Net Revenue First priority: continue to invest for long-term growth 40% Certain areas facilitate greater operating leverage
Slide 110: What does this mean for long-term EBITDA margins?
Financial Trajectory 1. Revenue 2. Market 3. Flywheel What does this mean for long-term EBITDA margins? CLEAR PATH FOR FANDUEL TO ACHIEVE LONG-TERM EBITDA MARGINS SIMILAR TO OTHER FLUTTER DIVISIONS 47.5 – 52.5% Cost of sales % of NGR ~ 12.5% Long-term EBITDA margins Marketing % of NGR 25 – 30% ~ 10.
Slide 111: Conclusion
CONCLUSION Amy Howe FANDUEL CHIEF EXECUTIVE OFFICER CAPITAL MARKETS DAY | NOVEMBER 2022 111
Slide 112: Key takeaways from today
Conclusion Key takeaways from today FanDuel has dominant leadership position in US online sportsbook and big 1 opportunity in iGaming Sustainable FanDuel Advantage, combined with unique benefits of the Flutter 2 Edge, provide great confidence in our ability to maintain clear #1 position Our phenomen
Slide 113: Thank you for joining us
THANK YOU FOR JOINING US 113