- FanDuel gained over 350,000 new customers in the United States for the first half of the year but they need to market their sports betting offerings more to be successful in H2.
- A new marketing plan has been laid out for the sportsbook operator as they lost 44% of sports bettor activity during Q2.
- Flutter, the parent company of FanDuel, managed to take in $366 million in H1 mostly from their casino and horse racing offerings but they know sports betting could do better with more ads.
NEW YORK – The FanDuel Group is expecting to lose hundreds of millions of dollars in advertising strategies in order to gain new members to use their platform this NFL season.
The sports betting company plans to “spend money to make money” as their numbers have dropped according to their H1 (half-year) reports.
FanDuel suffered a $25 million earnings before interest, taxes, depreciation, and amortization (EBITDA) loss during the first half of 2020 which they attribute not only to the Coronavirus Pandemic but to the lack of marketing themselves better in the states where they are operational.
The Future Plans For The Sportsbook
Arguably one of the top two sports betting providers in the United States, FanDuel estimates a loss of $185 million – $210 million that they plan to spend in advertisements to appeal to sports bettors in the U.S.
Flutter, FanDuel’s parent company, held a conference call about their Q2 financial report.
During the call, they touched on the significance of NFL betting as it pertains to sports betting and Daily Fantasy Sports (DFS) in the U.S. sportsbook industry which is why they plan to be elaborate on attracting more gamblers, hoping that it will pay off in the future.
“There’ll be a very, very significant step-up in marketing activity in the second half of the year compared with the first half. And of course, there are many more states that we’re planning to be opening in the second half of the year compared with last year,” said Jeremy (Peter) Jackson, CEO of Flutter Entertainment. “And we know how important it is, when states start to open up, to invest in hard-to-acquire customers. You’ve heard me say before that we wish we’d spent more money historically in some of the states when they first opened up because the customer economics have ended up looking better than we’d imagine they would do. So that’s — I think that is important context.”
However, FanDuel is not the only company planning an overload of ads for sports betting in the near future.
Competitors in the nation like BetMGM and DraftKings are all going to spend exorbitant amounts of money for advertising, knowing that football season is the biggest time of year for sportsbooks nationwide.
And in states that are newer to the industry like Colorado, residents can expect to see a large number of sports wagering based ads because each company wants to acquire those new bettors to use their platform.
The H1 Report And The Outlook For FanDuel
There are plenty of variables riding on the success of FanDuel for H2.
They will be relying on states like Tennessee and Michigan to launch mobile sportsbook applications so that they can operate and gain new players.
All the advertising in the world won’t help if the platforms are unable to launch. There is also the COVID-19 factor that could greatly change the sports schedule which would then affect the business as well because no sports means no sports bets.
Flutter has listed these potential issues they could be face while they go into H2, eyes wide open to the current situation.
Nevertheless, they do expect to spend nearly $200 million to market FanDuel’s product because that’s something they regret not having done earlier. The company is trying to right their wrong by taking this leap into marketing the sportsbook fully.
If they do in fact become hindered by the Coronavirus or delayed state launches, their name is still out there for sports bettors to be aware of their presence in the future which makes this a strategy that should pay off in the end.
Christina has been writing for as long as she can remember and does dedicated research on the newly regulated sports betting market. She comes from a family of sports lovers that engage in friendly bets from time to time. During the winter months, you can find Christina baking cookies and beating the entire staff at Mario Kart…the N64 version of course.