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FanDuel is sitting pretty right now. Based on market share, they are the number one sports betting app — slightly ahead of DraftKings, and far in front of the likes of Fanatics, BetMGM, or Caesars. In most legalized sports betting states, FanDuel consistently has either the highest revenue or hold percentage. The latter is a sneaky big reason for its success, not just an early-mover advantage when betting began going live in 2018 (they had a fantasy app ready to transition to sports wagering).
This success is being reflected in the stock price of Flutter Entertainment — the parent comment of FanDuel. In the last six months, shares are up about 50 percent.
Executives from the company took a second to celebrate (and rally up investors) at the end of September during an investor’s day event in New York City. Growing more was obviously another talking point. FanDuel has its eyes on expanding into new markets to do so, and none is bigger than California sports betting. Let us explain.
Lobbying And Education Will Be Key In California
FanDuel is targeting $9.7 billion in revenue in the United States by 2027 — an ambitious number for sure. If the bookie is to get there, it’ll need legalization in the “big three” of California, Florida, and Texas. Those are the direct words of FanDuel’s CEO Amy Howe.
Let’s focus on California here because Florida already has a legalized market, albeit it’s a monopoly through the Seminole Tribe and Hard Rock Casino (that’s in place until 2051). Texas is also far more conservative than California and seems to be more against any type of betting. California at least has tribal casino gaming so it would make sense to expand into sports wagering.
Howe is hopeful in the Golden State though. She said betting just needs a “compelling message” around possible benefits of regulated markets — things like economic lifts, community benefits, and responsible gaming. Notably, that was lacking the last time FanDuel tried to get betting in California legalized. Let’s recount that failed campaign and what FanDuel has learned since.
FanDuel Wants To Work With The California Tribes This Time
Remember Prop 26 and 27? If you’re a California voter, both FanDuel and tribal leaders hope you say no. These ballot initiatives went up for a vote in 2022. California, with its country-high population of 39.2 million, voted overwhelmingly against them. Prop 26 had hoped to legalize sports wagering at physical casinos, all of which are owned by tribes. It was a 67 to 33 percent vote saying no. Prop 27 was about legalizing sports betting via commercial bookies like FanDuel. It did worse, losing the vote an astounding 82 to 18 percent.
This was not an uncostly loss either. Both parties — the tribes and commercial apps like FanDuel — poured millions and millions into advertisements. It failed, largely because it was not a unified message. Tribes were advocating for one thing, FanDuel and its competitors were vouching for another. Two years later, the results serve as a lesson, not a loss.
Back in April, Howe said future legalization efforts in California will be done “with and though” the tribes. These comments were made alongside the California Nations Indian Gaming Association (CNIGA) chairman James Siva, as well as Jacob Mejia, director of public affairs for Pechanga Development Corporation. It was a 180-degree turn from 2022 when both sides attacked one another in ads and campaigning.
The tribes have a compact with the state to offer betting. More than anything else, they want to preserve that right. In fact, they said Prop 26 was more about defeating Prop 27 than legalizing on their own accord. So a partnership with an app like FanDuel makes sense for both sides.
For tribes, they keep their exclusivity. But more than that, they want to partner with someone who knows what they’re doing. In other states where tribes monopolize betting, many have struggled to spin up mobile products. It makes sense, right? Building an app takes real technical know-how — something most tribes lack, but a tech company like FanDuel knows like the back of their hand.
Ultimately, whether tribes and FanDuel partner up or not will come down to one thing: money. Who gets what share of the pie? Is it 50/50 split? Do tribes come out better? Commercial operators? Those questions are likely going on in offices as well speak.
When Can Sports Betting Attempt To Legalize Again?
The good news is California meets yearly to pass changes. For odd-numbered years, which is 2025, legislative sessions run from January to September. Would we see something put together for 2025? It’s certainly plausible, but we wouldn’t bank on it — no serious bill at least. The defeats of 2022 just feel too fresh.
Personally, we’re eying 2026 for a new piece of betting legislation in California. That’s enough time away from 2022, plus enough runway for operators like FanDuel to get organized with tribes, which won’t be easy. California has hundreds of tribes, which makes aligning altogether very difficult. But when this much money is at stake, operators like FanDuel are incentivized to go through that painstaking task to set up shop in the country’s most populous state.
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