FanDuel: Super Bowl is the 'biggest sports betting event in the country's history' – MarketWatch

Over $1 billion is expected to be legally wagered on this year’s Super Bowl between the Cincinnati Bengals and the Los Angeles Rams, and FanDuel CMO Mike Raffensperger wants you to win. As long as you bet through FanDuel.
Raffensperger, the former head of marketing for Amazon Advertising AMZN, -1.25%, is making his way to Los Angeles for what he called the “biggest sports betting event in the country’s history.”
In an interview with MarketWatch, Raffensperger weighed in the profitability of the Flutter-owned PDYPY, -4.09% FanDuel, if New York can be the sports betting capital of the U.S., and why he roots for bettors to beat the sportsbook.
MarketWatch: Are you going to Sunday’s game?
Raffensperger: Yeah I’ll be there for Super Bowl weekend. We are actually throwing a massive party on Saturday night where we have celebrities and retired athletes competing in all kinds of goofy games like axe throwing and beer pong. The big game is on Sunday which I will be lucky enough to be in attendance for and it will absolutely be the single biggest sports betting event in the country’s history
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MarketWatch: What is the value of having these in-person events considering most of your business is bets through the FanDuel app?
Raffensperger: On the retail sportsbook side it’s just great to have a presence in marquee locations like we have in Arizona with the Footprint center. We just announced we are building another in the United Center in Chicago. We see drive in the bets that are placed there, but it also builds trust among customers for our business.
MarketWatch: What types of total betting handle and betting trends are you seeing in preparation for this year’s Super Bowl?
Raffensperger: Money is flowing to the Bengals, which is a little unusual. It’s not usually the underdog, it’s usually the favorites, but the public seems to be favoring that Joe Burrow can get it done. That’s our material liability. In terms of overall activity and interest, we’ve seen about 70% more bets on the platform and as you would expect leading up to Sunday that absolute number will get a lot bigger.
“The big game is on Sunday which I will be lucky enough to be in attendance for and it will absolutely be the single biggest sports betting event in the country’s history.”
MarketWatch: What about prop bets? Is everything higher?
Raffensperger: We are estimating that about 50% of all bets will be props at the time of kickoff. The Super Bowl will get more prop bets action than other games during the NFL season.
See also: 5 wacky Super Bowl prop bets, including ‘will there be an octopus?’ and ‘Gatorade shower color’
MarketWatch: We’ve estimated that $1 billion will be legally wagered at U.S. sportsbooks this Super Bowl. Is that projection as well as your own expectations for FanDuel coming to fruition so far?
Raffensperger: I can’t share the absolute number, but thus far we are encouraged by the trends we are seeing.
MarketWatch: Were you expecting to set sports betting records in New York prior to launching in the state?
Raffensperger: To speak honestly, no. We always knew New York was going to be a large market. Our company’s headquarters is in New York City, so we were here to play. The interest level and volume that we saw in the first month of New York very materially exceeded the projections and expectations we had.
New York City is a unique market. We had advertising in that area given that we had legal betting available in New Jersey — in some ways it was already a primed market. Frankly some of the customers that we would see in New Jersey had New York residences and they drive across the bridge, stop at a Starbucks SBUX, +0.03%, place some bets and drive home (laughs).
MarketWatch: I used to live in Hoboken, New Jersey. I frequently saw people take the PATH train to a bar near the train station, get a beer and place a bet, and then get right back on the train.
Raffensperger: It definitely happened. About 20% of our New Jersey business came from those with a New York residence.
MarketWatch: Are you expecting New York to become the No. 1 sports betting state in the country moving forward?
Raffensperger: You look at the opportunity based on population and to some extent what does household income and what does the local sports market look like. California is the most populous state in America and would likely be the top sports betting market.
“Money is flowing to the Bengals, which is a little unusual. It’s not usually the underdog, it’s usually the favorites, but the public seems to be favoring that Joe Burrow can get it done.”
MarketWatch: Are you guys running any commercials during the Super Bowl?
Raffensperger: We need to be generating enthusiasm and new customer trials and bets on the game leading up to kickoff. So a lot of our campaigning is taking place right now. We will not be running a national spot.
MarketWatch: Are you anticipating that at points FanDuel will have to stop doing “over the top” promotions like free bets and deposits matches to get people in the door?
Raffensperger: It will certainly slow down. You will never see more generosity in terms of new customer incentives than in the first days of a state launch. It’s such a wide open market, you’ll never have another opportunity to acquire customers who are at their most efficient cost of acquisition. Over time you will see pullback in the level of generosity.
MarketWatch: FanDuel in many ways has viewed itself as a tech company over the years. Tech companies have been criticized at times for a lack of early emphasis on profitability. Do you agree with that comparison?
Raffensperger: It’s a great question. The biggest difference is for some companies to be economically viable there needs to be a critical mass of users or network effects of consumer value for the overall business to work. For FanDuel, on a per user economic basis, it fundamentally does work.
There is not a week that goes by that I don’t look at our latest customer acquisutuion cost data or where is the projected value of that customer over their lifetime.
See also: Here’s everything you need to know about legally betting on the Super Bowl in 2022
MarketWatch: What will it take to make FanDuel profitable?
Raffensperger: It’s time. As we continue to mature, you’re going to have a customer base that is producing a revenue profile that ultimately can fund that ongoing customer acquisition activity. The short answer to your question is time.
MarketWatch: Who do you like this weekend?
Raffensperger: (laughs) I will say that if the Bengals win in a high scoring game where a lot of high-profile players score touchdowns, it will be a very good day for our customers. I am the chief marketer of the company — I am on the customer’s side.
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Weston Blasi is a reporter. You can follow him on Twitter @WestonBlasi.
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