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Business Operations Business Models

How Does FanDuel Make Money (Business and Revenue Model)

The FanDuel business model

How Does FanDuel Make Money?
Here’s what you should know:
  • What is FanDuel, and how does FanDuel work?
  • How does FanDuel make money?
  • Sports Revenue (Sportsbook, Fantasy Sports, and Racing)
  • Gaming Revenue
  • FanDuel’s Subsidiaries, Acquisitions, and Exits
  • FanDuel’s profit and revenue
  • What is the FanDuel business and revenue model?
  • FanDuel’s funding and valuation

How does FanDuel make money? Here is a full, in-depth, breakdown of their two (2) revenue streams and the different products and services they offer, as well as the FanDuel business model, their profit and revenue, and how FanDuel works.

What is FanDuel, and how does FanDuel work?

FanDuel, a subsidiary of Flutter Entertainment, is an online betting app for fantasy sports, live games, and casino play.

Founded in 2009 by Nigel Eccles, Lesley Eccles, Tom Griffiths, Rob Jones, and Chris Stafford, FanDuel has since been acquired by Flutter Entertainment for $4.2 billion on December 3, 2020, has now has more than 12 million registered users on its platform.

How FanDuel works is: Once a user downloads the app, signs up, verifies their information and location (a user must be in one of the 18 states in the US where online sports betting is legal) – they can then link a bank account, add cash, and start betting on FanDuel’s apps – Fantasy Sports, Sportsbook, Racing, and Casino.

Some of FanDuel’s competitors include DraftKings, BetMGM, Barstool Sportsbook, and other sports betting apps.

FanDuel App in Apple App Store | FanDuel Business Model | How Does FanDuel Make Money?
Source: Apple App Store

How does FanDuel make money?

According to FanDuel’s about page, they have more than 12 million registered users on their online sports and casino betting apps. So how does FanDuel make money off of all those users?

Below is a breakdown of how much money FanDuel makes and its revenue model. Including all revenue streams and how much they charge for their services.

All revenues on this article have been converted from British Pounds (GBP) to US Dollars (USD) given that Flutter Entertainment, the parent company of FanDuel, is a British company reporting its revenues in British Pounds.

Here are the 2 ways of how FanDuel makes money (in 2021):

FanDuel has a revenue model that makes money in two (2) ways – sports and gaming revenue.

#1. Sports Revenue (Sportsbook, Fantasy Sports, and Racing)

FanDuel makes part of their money through revenue earned from their sports apps. In fact, roughly $636 million or 65.9% of FanDuel’s total revenue came from its sports apps in 2020.

You can see Flutter Entertainment’s, parent company to FanDuel, 2020 preliminary results on page 19 breaking down its sporting revenue into three (3) apps and offerings: Sportsbook, Fantasy Sports, and Horse Racing.

FanDuel Business Model | How Does FanDuel Make Money?
Source: FanDuel

Note: 65.9% of FanDuel’s total revenue came from its three (3) sports apps in 2020.

#2. Gaming Revenue

The other half of how FanDuel makes money is through its casino app.

According to a FanDuel FY2020 press report, $329 million of FanDuel’s $965 million in revenue was earned through its casino app in 2020.

FanDuel Business Model | How Does FanDuel Make Money?
Source: Apple App Store

Note: Revenue earned through casino play is made much like how DraftKings’ casino revenue is earned – “through hold, or gross winnings, as users play against the house.”

FanDuel’s Subsidiaries, Acquisitions, and Exits

Aside from FanDuel being acquired by Flutter Entertainment for $4.2 billion – FanDuel has also made a total of 3 acquisitions to date.

FanDuel’s profit and revenue

Flutter Entertainment, the parent company to FanDuel, reported a revenue of $965 million for the company in 2020.

What is the FanDuel business and revenue model?

FanDuel makes money through a few revenue models that they combine within their company, they are:

  • Revenue sharing business model
  • Cross selling business model
  • B2B2C (partnerships) business model
  • Mergers & acquisitions (M&A) business model

FanDuel’s funding and valuation

According to FanDuel’s Crunchbase profile, FanDuel raised $416.2 million over 7 rounds with a valuation between $21 to $35 billion according to multiple sources.

FanDuel was acquired by Flutter Entertainment on Dec 3, 2020, for $4.2 billion.