Paddy Power Betfair (PPB) is riding a big winning streak in New Jersey.
Revenue for Betfair Casino soared 83% year-over-year to $11.7 million, the parent company announced in its recent Q1 trading update. According to CEO Peter Jackson, PPB’s share of NJ online casino revenue has increased sharply to an estimated 14% — up from “a steady 11%” over the previous two years.
The stellar first quarter comes hot on the heels of a strong 2018 in the Garden State, where Betfair operates under the Golden Nugget interactive license. Gross gaming revenue reached $34 million last year, a 31% rise from 2017 ($26 million).
If Betfair can replicate its Q1 numbers over the remaining three quarters in 2019, it will comfortably eclipse last year’s performance. Such success would also reenforce PPB’s position as the clear leader among online-only gaming operations in New Jersey.
Jackson highlighted cross-selling as one key component of Betfair’s accelerated growth in recent months.
Betfair Casino has actively marketed its 400-plus games to customers of its new sister brand, FanDuel Sportsbook, dating back to last year. London-listed PPB acquired a controlling stake in the sports gaming company in the immediate wake of the PASPA repeal in May 2018.
FanDuel has around 8.5 million daily fantasy sports customers in the US.
Two months later, PPB consolidated its portfolio of US brands — including horse betting platform TVG and mobile-first DFS business DRAFT — under the umbrella of the newly formed FanDuel Group. In the time since, FanDuel Sportsbook has emerged as the clear leader among NJ online sports betting operators.
Given the early success, fully embracing the brand is the next logical step for PPB. Expect to see either an independent FanDuel Casino platform or a rebrand of the existing Betfair Casino to further unify the operation going forward.
Since mid-December, FanDuel Sportsbook has presented customers with banner ads for — and links directly to — Betfair Casino. To ease the friction in this journey, customers can use the same account and wallet across both.
At a US Investor Day in March, PPB management revealed that 28% of their casino brand’s revenue in 2019 had been derived from FanDuel Sportsbook customers. Just 7% of sports bettors crossed over, though, leaving a “long runway for casino cross-sell.”
The cross-sell rate for Paddy Power and Betfair in international markets is over 30%.
In an analysts’ note issued after the trading update, Regulus Partners highlighted the “effective sportsbook cross-sell into casino” in New Jersey and praised the company’s “strong multi-product execution in the US.”
Regulus said PPB had a “clearly driven early mover advantage” in New Jersey.
Betfair’s strong growth has also boosted Golden Nugget’s bottom line.
According to the NJ Division of Gaming Enforcement, online casinos operating under Golden Nugget’s license racked up a new monthly high of $14 million in revenue during March.
Based on the $11.7 million in revenue Betfair generated in Q1, the brand is accumulating around $4 million per month. That’s roughly 28% of Golden Nugget’s online revenue, and its share seems likely to increase going forward.
With revenue up 47% to $101 million in the US for Q1, Jackson said FanDuel Group is “making huge progress” and that he expects to see “good returns on US investment” in 2019.
Indeed, the US was a key driver behind PPB’s overall revenue climbing 17% to $622.5 million for the quarter.
Betfair Casino initially operated as a standalone business for PPB in New Jersey, punching well above its weight. It has since become the second largest brand in terms of online casino market share behind Golden Nugget.
The Ireland-based operator is actively debunking the myth that land-based casinos, with their ability to leverage existing customers, have the pole position for online gaming.
And now, with the marketing cross-sell from FanDuel Sportsbook and other brands within the group, this online-first brand is poised to become even more of a force to be reckoned with in 2019 and beyond.