Despite Texas failing to legalize sports betting, FanDuel and its parent company Flutter still have the Lone Star State on its radar. Texas was recently mentioned as one of the “Big 3” states FanDuel is actively lobbying for legalization.
If Texas sports betting is to become a reality, FanDuel will surely be in the mix in a big way.
In an FanDuel presentation led by Flutter CEO Peter Jackson during the company’s Investor Day in New York, the gambling company outlined strategies for helping pass sports betting legislation in Texas, California, and Florida. Those are the three largest markets in the US without legal sportsbooks.
At an estimated $2.4 trillion in 2022, Texas is the eighth-largest economy in the world, ranking ahead of Russia and Canada. The state of California is even larger, at $3.9 trillion, or the fifth-largest economy on the planet.
Large markets like Texas are understandably attractive to Flutter and its sports betting product FanDuel.
Since the U.S. Supreme Court struck down the Professional and Amateur Sports Protection Act (PASPA) in 2018, more than 30 states have launched their own sports betting markets. Most of those states permit online sportsbooks.
Lawmakers and politicians in Texas have resisted legalizing sports betting, in spite of opinion polls that show at least a plurality of citizens support the activity. Many Texas consumers travel across the state border to place wagers in Louisiana.
Unique challenges to passing sports betting legislation in Texas
Texas doesn’t have commercial casinos, online casinos, or sports betting. It does have a state lottery and Texas sweepstakes casinos and social sportsbooks are legal, but that’s it.
For Texans to see legal online sportsbooks, it will take a shift in the way lawmakers there view gambling. There is evidence that could happen.
Texas Gov. Greg Abbott, a Republican, does not seem opposed to some form of legal sports betting in his state. He has said he would consider signing such legislation under certain circumstances. However, Lt. Gov. Dan Patrick has been a vocal opponent of sportsbooks.
One industry analysts predicts that Texas won’t legalize sports betting until at least 2028.
How FanDuel plans to nudge “Big 3” states to legalize sportsbooks
With so much money at stake in sports betting, FanDuel and its competitors will keep an eye on Texas. FanDuel and DraftKings are the two industry leaders in the US market.
According to Jackson’s presentation to investors, FanDuel went from 27 to 38% of gross gaming revenue market share from fiscal year 2021 to the first six months of 2024. That growth has been driven by parlays and live betting, according to FanDuel, which says “88% of bettors believe that sports betting makes games more fun to watch.”
Jackson told investors last month that the FanDuel Sportsbook market opportunity is now expected to be $70 billion by 2030, of which $39 billion would be from sports betting, and much of the rest from iGaming and fantasy sports.
Flutter explained that its strategy would be:
- Creating compelling messaging around the industry’s economic impact
- Driving community impact [from tax revenue]
- Demythologizing the [sports betting] industry
- Amplifying breadth & depth of commitment to revenue growth
FanDuel plans to use at least these three activities to be successful in Texas and the other two states:
- Lobbying and engagement
- Proactive Public Affairs
- Coalition building, sponsorships, and industry memberships