Paddy Power Betfair saw U.S. sports betting revenues shoot up by 47% to hit $78 million ($102 million) in the first quarter of 2019. The firm snapped up daily fantasy sports brand FanDuel last year and promptly set about trying to turn it into the leading sportsbook in America. It has proved to be an inspired decision thus far as FanDuel has emerged as the market leader in the nascent New Jersey sports betting industry. It is now beginning to expand across the country and it has the potential to become the dominant player in this exciting market.
“In the US, FanDuel Group is making huge progress, with our unique proposition of brand, product offering, existing fantasy customer base, US market experience and global sports betting expertise driving a first quarter New Jersey sports betting market share of 50%,” said Paddy Power Betfair chief executive Peter Jackson. The firm, which is poised to rebrand as Flutter, reported that quarterly revenue rose by almost a fifth to £478 million. Australia also saw strong growth, but the U.S. looks like it could develop into the jewel in the crown.
The trusted FanDuel brand and the commercial expertise of Paddy Power Betfair has proved to be a winning combination for U.S. sports fans. In March, it posted revenue of $17.5 million in New Jersey, leaving rivals DraftKings and William Hill in its shade. It was the second consecutive month in which FanDuel has topped the New Jersey sports betting market and that bodes well for the future as it spreads its tentacles into Pennsylvania. It opened a retail sportsbook in Valley Forge in March and it is just awaiting the green light to launch its popular app in the Keystone State.
Paddy Power has around 300 betting shops across the UK and Ireland, but US revenue has now exceeded its retail revenue for the first time. “In the US, FanDuel remains well positioned to generate good returns on on-going sports betting investment and for rest of the group we remain on track to meet our full-year profit expectations,” said Jackson. “We remain excited about the growth opportunities that lie ahead for the group.”
A Flurry of Activity
A number of states are keeping a close eye on the revenue growth that New Jersey has seen since it introduced legal sports betting last summer. Delaware, Pennsylvania, West Virginia, Rhode Island, Mississippi and New Mexico have also joined Nevada in legalizing sports wagering since the U.S. Supreme Court axed PASPA in May 2018, and the race is on to become the next state to join the party. Time is running out for lawmakers across the country as legislative sessions are about to end, resulting in a flurry of activity over the past week.
Iowa, Indiana, Montana and Tennessee are very close to introducing regulated sports betting industries, as they have all sent bills to their respective governors. HB 1 gained final House and Senate approval on April 30, although it was a narrow margin of victory. The House voted 51-40 in favour of legalization, while the Senate passed the bill via a 19-12 vote. Gov. Bill Lee is not a fan of sports wagering, but he plans to let it pass into law without his signature.
“The governor has said he does not believe that the expansion of gambling is best, but he recognizes that many in the legislature found this to be an issue they want to explore further,” said Lee’s press secretary, Laine Arnold. A House amendment this week saw the proposed license fee increase from just $7,500 to $750,000 and the tax rate double to 20%. That sounds harsh on potential operators, but it still pales in comparison to the $20 million fee and the 36% tax rate charged in Pennsylvania. Lee has until May 10 to decide whether or not to veto the bill, but that looks unlikely after reading Arnold’s statement.
Confidence in Iowa
Iowa Gov. Kim Reynolds has until May 27 to sign SF 617 into law after it passed through both chambers with bipartisan support following 16 separate hearings. There are doubts over whether she will green light the bill, after she said she would pay heed to a local bill suggesting 52% of Iowans oppose sports wagering, but author Rep. Roby Smith is confident it will pass into law. “I think she wants to take time and review it, and she doesn’t want to say one way or another in case she decides to go a different way,” he said. “I don’t have problems with the comments. They show she is doing her due diligence.”
Operators clearly share his confidence. PointsBet, which is already offering legal sport wagering in New Jersey, has tied up a deal with Catfish Bend Casino in Burlington to offer Iowans a regulated sportsbook. “The potential legalization of sports betting in Iowa opens an exciting new opportunity for recreational and avid players, and PointsBet’s unmatched dedication to bettors makes them the ideal partner for our brand and go-to-market plan,” said Gary Hoyer, chief executive at Catfish Bend owner Great River Entertainment. William Hill, which operates in every state to legalize sports betting, William Hill secured a partnership with Prairie Meadows Racetrack & Casino to operate an 8,600 sq. ft. sportsbook in Iowa.