Dan Taylor has been Flutter CEO for five weeks. He already has a strategy. Hand out more free money.
Profit fell. Adjusted EBITDA dropped about 25% to $360 million. Revenue missed. Flutter stock is down more than 60% this year.
FanDuel's US adjusted EBITDA fell 94%, to $3 million. That's not a profit. That's what a man finds in his couch after a divorce.
Taylor says the promotions are working. FanDuel gained share in August and September. It cost him profit and the buyback. Share buybacks are on hold until leverage returns to a 2 to 2.5 times range, roughly 24 months from now.
Think about the business model. FanDuel pays you to gamble. Then it pays you to refer a friend to gamble. Then it launches a rewards program, so you get paid for the gambling you were already being paid for.
Taylor says the rewards program has "resonated really, really well." Of course it has. Free money resonates. Ask anyone who has ever been handed a twenty by a stranger.
Retail traders, this is your moment. A company worth billions has decided its best customer is you, and its best strategy is bribing you. You are not a shareholder. You are a line item in the promotions budget.
Taylor also touts 140,000 new FanDuel Predicts customers in October. Prediction markets. Because sports betting lacked a way to lose money on whether Congress will pass something.
He gives the next update in February. By then the NFL season will be over, and the promotions budget will be a smoking crater with a loyalty tier.
Buy the stock if you must. Flutter is the only casino that pays you to walk in and still can't get you to leave a tip.
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