Lance Glinn:

Welcome into another episode of the Inside the ICE House Podcast. Today's guest is Peter Jackson. He is the CEO of Flutter. Peter, thanks so much for joining us Inside the ICE House. Happy to have you here.

Peter Jackson:

No, it's a pleasure. It's great to be here.

Lance Glinn:

So, I want to start big picture and just look at the numbers around this World Cup. 104 matches across three countries over a month of time, with a tournament expanded to 48 teams for the first time. When you just look at the scale, how do you think about the opportunity that this World Cup, with the sheer size that it is, what does the opportunity look like for Flutter?

Peter Jackson:

Well, let's add some extra dimensions to it because when we're here at America, we think about big events and we look at the Super Bowl. And if I said to you, how many people watch the Super Bowl, what would you say?

Lance Glinn:

Hundreds of millions, if not billions.

Peter Jackson:

Well, no, it's not. It's about 150, 200 million people.

Lance Glinn:

Okay.

Peter Jackson:

If you look at the World Cup final in Qatar, one and a half billion people watched that event, so the final is 10 times the Super Bowl. And in total, five billion people watched the tournament. So, the World Cup is huge. It's a massive event. Now, of course, it doesn't happen every year. It's like the Olympics, so it's every four years. But this is going to be a huge event. And so, really, look, there're going to be billions of eyes on America, so this is a huge deal for everybody.

Lance Glinn:

And what does it being in the United States...? Or not only in the United States, obviously there are games in Canada, there are games in Mexico as well, but with the US as essentially the host country with the final being not far from where we sit today in East Rutherford, New Jersey. What does that do? It being housed here in the US, what does that do for viewership, for engagement, and for Flutter as well?

Peter Jackson:

Well, I'm very excited about it. And of course, as a global business, I'm mean soccer is religion in Brazil. I remember being in Brazil in Sao Paulo in 2014, when Brazil were playing one of their World Cup matches. And there was not a dog on the street. So, I mean, everybody was watching the games. I'm not quite sure we'll get the same focus in America, but I think this is going to be very exciting for help bring soccer to the masses in America. And so, for our business, this is about acquiring customers. FanDuel is the market leading business in sports and this is going to be a brilliant opportunity to showcase our exciting sports content for soccer.

Lance Glinn:

And obviously, this takes place, the US being a fully regulated sports betting environment. When you combine this host country advantage with the fact that the US is a regulated landscape, it's obviously expected to generate billions in handle. How do you think about this World Cup with those factors included, compared to previous ones that we saw four years ago, eight years ago, et cetera?

Peter Jackson:

Yeah. I mean, this is going to be far bigger than anything we've seen before. We think this will be twice as big as the previous World Cup. We're talking about 60 billion of handle. And those factors are all important. The eyes in America are really important. But for us, it's going to be a brilliant opportunity to engage with consumers. And this is complex stuff we have to deliver. You talk about the game, but for us, we'll be having 100,000 bets a minute going through the platforms. So, the tech that we have to stand up behind that to be there for our customers, all of the tens of thousands of markets we're pricing live in real time as that game's evolving, it's a massive feat. We had to start planning. Last year, we have 100 of our best traders working on it. So, this is a really big deal for us.

Lance Glinn:

And so, I think you said 100,000 a minute for this World Cup. So, I want to ask about the preparation, because to house 100,000 bets a minute is crazy and takes, I'm sure, months, if not years of preparation. This isn't something obviously that you can stand up or start to stand up just a few weeks out. This is, I'm sure, been in the works for years at this point, I would probably assume. What has this lead up looked like internally at Flutter over the last periods of month and years to get ready for an event of this magnitude?

Peter Jackson:

Well, we utilize very modern tech infrastructure. We're a very cloud native business. So, look, we will be relying heavily on AWS and our other cloud partners to scale our infrastructure, to cope with the volumes, because it's not just that 100,000 bets a minute. It's all the sort of interactions that people have with the app. It's the billions of pricing updates that we'll be pushing through the platform during the course of the competition. But really for us, this isn't out of the range of the other stuff that we do. So, we're in New York at the moment. We have the excitement of the NBA playoffs. And let's see whether Knicks can stay on the chair or whether the Spurs start winning some games back.

The volumes that we have and the interest for that is phenomenal. Now, that's not a global thing. Look, there'll be a lot of people in Australia betting on that on our platform. But soccer is truly global and a real phenomenon. And that's why we see those huge volumes.

Lance Glinn:

And so, you mentioned the World Cup is a global operation. Flutter has different brands across different markets, working together, a lot of those markets obviously participating in this World Cup as well. How do teams across Flutter from product to tech, to marketing, to you name it, how do they all work together in real time to deliver a platform that could house the bets, that could update the prices second by second, that could do all the things necessary to put out a good product? And have a good experience for the consumer using the platform, regardless of what platform that they're using among your portfolio?

Peter Jackson:

Well, you're right, Flutter is this very global organization. And the way that we deal with that complexity is we break down our business into different parts and different components around the world. So, we have a team supporting our business in Brazil. The same is true in the UK. The same would be true in Australia, and then, of course, here in America. But what's really important is that we can take product that we develop in one part of the world. So, look, we've got a brilliant product feature that we're going to bring and make available for US consumers through this World Cup, that's called Super Sub.

So, look, I suspect that Mbappé, the French player, he will be the favorite to score the most goals in the tournament, so the golden boot prize. And so, people will be wanting to bet on him when France are playing. And what happens if you've got a bet on him to score and he gets substituted, because that's what happens in soccer.

Lance Glinn:

100%. Yeah, absolutely.

Peter Jackson:

You have players can come and go.

Lance Glinn:

And of course, unlike other sports, in soccer, obviously, as I'm sure a lot of artists knows, once someone's out, they're out.

Peter Jackson:

Correct.

Lance Glinn:

There is no returning into the game.

Peter Jackson:

And so, we dealt with a real customer pain point, because if you'd had Mbappé to score and he's substituted off, what happens to your parlay? With Super Subs from FanDuel, the player who comes on in his place, if he scores, the bet still wins. And so, we developed this feature and we developed it originally in Italy. Soccer is huge in Italy. These issues of substitutions were a real problem in the market, and so the team there developed this product. So, we've taken that capability and we're able to deploy it here in FanDuel. So, we can leverage our scale like that by taking features and ideas from one market and putting them across in others.

And then from a risk and trading perspective, in terms of how we manage the markets, those games that get played, clearly the time zones and stuff are very complex. So, we're standing at this team of 100 people. We've got people seconded and moving all around the world to make sure that they're sat in the right locations. But effectively, we're going to running a global team to support this tournament.

Lance Glinn:

So, I was going to wait a little bit to talk about innovation, but because you brought up Super Sub, I want to skip to that right now. I think that's really interesting. And how much did you think about engagement when it came to that sort of innovation? And I asked that because if I'm a better and I, like you said, bet on Mbappé to score. And in the 60th minute, let's say he gets subbed out. If I'm a casual fan just watching for that specific bet, I would turn the TV off because I'm like... if Super Sub did not exist, I would turn the TV off because I'm like, well, he's out of the game, my parlay or my individual bet is going to lose. But having the Super Sub allows you to stay engaged, because like you said, if that person who replaces him then scores, you still win your bed.

How much for an innovation like that and potentially other innovations did you think about keeping the fan engaged, keeping, again, the casual person? Because that die hard soccer fan, they'll stay engaged no matter what. But how important is it to bring the casual fan in and make sure that they stay engaged if they make a bet on, again, an Mbappé, for example?

Peter Jackson:

Well, one of the big focuses for us with the World Cup globally... This is not just a phenomenon in America. This is a really good opportunity for us to acquire new customers onto the platform. That's our predominant focus. So, it's a really important opportunity. A lot of the domestic soccer seasons are finished in other countries around the world. NBA's finished, football's finished here. Yes, MLB is continuing and cricket's continuing in other markets, but this is a great opportunity to engage fans through the summer. So, the focus for us is around that acquisition. And then look, what we do is we make sure that we really understand what's going on from a consumer perspective, whether it's that casual better or someone who's more serious, to understand what are their pain points and then think about how we can innovate. The Super Sub product we have is one example.

Look, the other thing that will happen... And look, this will surprise some American consumers who are not as familiar with soccer. There's two phases to the tournament. The first phase are these group stages. And so, two teams can play each other, one team could win, the other team could win or they could draw. You get three points for a win, one point for a draw. As soon as the teams are out of the group stage, the top three teams will go through. Then we're into a bracket. And then you've got to make sure that when the two teams play each other, one of the teams is going to win. Now, look, in soccer, you can have the Champions League final recently, you can get to the end of full-time and there's no winner. It's a draw. So, then you play 30 minutes of extra time, two halves again, 15 minutes each. And it could still be a draw, as it was with the Champions League final, and then you get into penalties.

And so, one of the markets that we will bring for FanDuel customers with this tournament is what we call the 120-minute market. So, when you get into the knockout stages, one of the teams is going to win. So, it could've been a draw at full-time, but we can let you bet on the team who is effectively going to go through to the next round of the draw.

Lance Glinn:

Yeah. And I like that for casual betters, because as you know, and I'm sure most of our listeners know, there's really no other sport, major sport in the US that could result in a draw. Granted, the NFL can technically result in a draw. It's very rare. I think it happens maybe once a season. But NBA always ends with a winner. NHL always ends with a winner. Major League Baseball ends with a winner. And like I said, NFL, usually when it goes to overtime ends with the winner, barring the ever so rare draw or tie that happens. So, I think a lot of casual fans can appreciate that.

And you mentioned the knockout rounds and the group stage is great. There's so many games going on at the same time, so many things to watch, so many things to bet on. But the knockout rounds are where I think intensity really spikes, especially for those who are rooting for a specific country, maybe rooting for a specific player. Obviously, stakes are higher, the narrative becomes sharper. Obviously, every minute becomes amplified because it's winner go home.

Peter Jackson:

You're selling the excitement for our customers.

Lance Glinn:

I know. Look, let me tell you something before I get to this question. The World Cup is always fun to watch. I like all these international games, whether it be the World Cup, the Olympics. And anytime you could watch something that doesn't happen every year, I think it always brings a sense of excitement. But because the final and a lot of the games, a lot of the matches, I should say, are close by at, I guess it's technically New York, New Jersey Stadium in East Rutherford, New Jersey, it is drawing up some buzz here locally. And I wouldn't consider myself a diehard soccer fan, but I know for the World Cup... And it's the same thing when the Summer Olympics are on and they have the soccer on too, I am engaged. I'm engaged. I'll watch. It's something fun. It's something fun to get behind.

So, I'm passionate about it, Peter. I'm passionate. I'm excited for it. I think it's something... again, it's a rarity. Rarity in the sense that one, I can't remember if at all, if ever, the US has hosted. I'm sure they have. It's probably before I was born, hosted the World Cup before. But it's just something fun. And I think that people have to remember that this is not a every year thing. It's rare that the US hosts something like this, so we really should enjoy it. I think you'd probably agree.

Peter Jackson:

Yeah,.I mean, I think it's going to be terrific. And I think, for soccer, which is such an important global sport, I think it's always been a little bit of a second best in the US. I think MLS has made some really good forays, and has done a really good job to attract us of audience, and some of the media deals and things they've done have helped. But you're right, look, traveling around the US. I was in Texas last week, I'm in New York this week. There's a lot more engagement, merchandising of the World Cup than I've seen of almost anything outside of the launch of the football season, which of course, is always a big phenomenon. But I think people are going to get behind it. And as you say, when they start to get into some of those knockout games, let's hope that Team USA would do well through the competition. And I think it'll really keep people engaged.

Lance Glinn:

And I think it falls, obviously, at a really good time, because yes, here in New York City, you mentioned it, the city is buzzing for the Knicks. How could they not be? Knicks are in the finals for the first time since '99? It's exciting. They're up as we record today, won nothing. When this comes out on Friday, June 12th, we'll see if they are still up in the series or if it's tied or if the Spurs are leading. So, obviously, the city is buzzing. But the majority of sports, besides Major League Baseball, which again, 162 games, so it doesn't have that same die hard feeling during the regular season because it is so long. A lot of the other sports are gone. So, the World Cup is really in focus.

Peter Jackson:

Absolutely.

Lance Glinn:

It is singularly the sport and the tournament that people are going to watch. So, the opportunity, and you said it, if the United States goes far and if they're able to exceed expectations, get to the knockout round. What would that mean for fan engagement and for Flutter, frankly, too, if we see the US, again, make it to the knockouts, maybe even exceed and go on a little bit of a run and really draw up some more excitement than there already is?

Peter Jackson:

Look, one of the things which is brilliant about sports is that there's always, to some extent, chaos. It's not predictable. No one can ask a AI model the answer. You can get a view of what people think the probability is going to be. That's what we do. We're very good at it. But no one knows. No one knows and that's what's so exciting. There's often been those great stories of the underdogs turning over and beating a favor. There was the time when Germany beat Brazil seven-one. I mean, it's before my time. 1950, when the American team were basically part-timers and beat England in the World Cup. So, upsets happen and that's what makes it really exciting.

Lance Glinn:

How do you manage with it being housed here in the US, again, games in Canada and Mexico as well, but let's say North America as a whole, how did you take into account US customer behaviors and expectations? Because our fandom here is a little bit different. We've talked about soccer isn't the main sport like it is in many other countries abroad. So, how did you take into account US behaviors, fan expectations, and the way we do things here when you figure it out or were determining what the product is going to look like for the World Cup?

Peter Jackson:

We have a model of Flutter as a global leader, where we benefit from our global scale, but we execute locally. So, people know the FanDuel brand here in America.

Lance Glinn:

Of course.

Peter Jackson:

We're the number one business in sports and people know and love the FanDuel brand. If you go to another market and if you're in the UK, everyone will be familiar with our Paddy Power brand or our Sky Bet brand. It's sports better in Australia. So, we deliver through our local brands, that's what we do, but we benefit from our global scale. I think what we'll see with this World Cup here in America is a really good example of that. The campaigns that we have, the product features, the messaging we'll have available for our customers will be tailored for the US audience. And it will be different to the messages and features and promos that the Australian team will have. And so, we'll be tailored to our local markets, but we get to benefit from our global infrastructure, the global scale we have, the insights of soccer, because that's our big sport in almost all of our other markets around the world.

Lance Glinn:

There's the expectation I think with this tournament that it'll bring... And I think you talked about it too, a little bit earlier in one of your answers. They'll bring some first time, some casual betters to your platform, to betting on soccer that may prioritize other sports normally during the year. With that influx, obviously, comes a sort of heightened sense of responsibility, obviously. How do you think about ensuring that the experience on your platform remains safe, transparent, and obviously grounded in regulation, particularly when the scale of what is about to happen is so large?

Peter Jackson:

We take this whole area incredibly seriously. I mean, I don't think there are many consumer brands that you can find, where they'll be monitoring and protecting their customers and sometimes preventing them from transacting. So, we have our realtime check-in service. There'll be times when we'll actually prevent our customers depositing money with us or telling them that we think they need to take a break from our platform. And you don't see that happening in social media or other places. So, we take that responsibility really seriously. It's a core part of what we do to make sure that the entertainment that we give our customers is fun and safe.

And then, of course, there's also the integrity of the sport as well, and that's a really important matter for us. And integrity is key. I mean, people have a lot of trust in the FanDuel brand. They have a lot of trust in our PokerStars brand. If you're going and playing poker on our platform, you want to know that you're playing against real people and not bots. And so, integrity of that game is important. So, wherever we operate, we operate those very high standards. Player protection's very important. Integrity is very important for us.

Lance Glinn:

And we talked a little bit about it earlier, speaking to the same opportunity, and the need to have that regulation, and to make sure everything's transparent, and safe, and the experience is a good one. Obviously, the USA, fully regulated sports betting environment. How do you see the World Cup as, I guess, an opportunity to not just grow Flutter, obviously, but to demonstrate the value and the importance of regulated gambling markets?

Peter Jackson:

Well, roughly, half of Americans live in states where regulated online sports betting is available. And I think for those states, they get to capture the tax revenues. We're very focused around sport integrity and player protection as well. So, that's super important. So, for us to be able to use this as a catalyst to continue to see more states pass our regulation I think will be very important. And in the meantime, the prediction market regulations that are available mean that we can now operate on a national basis.

So, historically, as I was last week in Texas, you could never have utilized the FanDuel product. Now I can take the FanDuel app that I use in New York, open the same app in Texas, and we have our Predicts product available for consumers. We're moving to have a unified app. And so, whilst we are at the point where only half Americans can use the regulated OSB and ultimately, we want to get more states to pass the legislation, we can make sure we've got a great sports experience for FanDuel customers wherever they go.

Lance Glinn:

And so, we talked a little bit earlier about the impact that it would have if the US makes a run, if they do the unexpected, if they go far in the World Cup, but Flutter has strong positions. You've mentioned some of them in a lot of the countries participating, whether it's the US, the UK, Australia, Brazil, so on and so forth. Why does it matter commercially for Flutter when teams from those key markets really have an impact on the game? They aren't just group stage and out. They really make their mark. May not win it, but have a presence in the knockout rounds and potentially go on a little bit of a run.

Peter Jackson:

Yeah. People are always going to be supporting and putting their money behind their local team. I mean, it's interesting for us to look at where the weight of money is in different markets. I mean, I think in the US, at one point Spain was people's favorite team. I think France is now edged ahead. I don't know whether that's because of PSG winning the Champions League final possibly. In England, of course, people are hoping that as the folks in England would say it's going to come home and they'll win the World Cup again.

And so, you get those different biases coming into play. But look, the engagement you get, people getting behind their national team is really real. And particularly, if you get through to some of the later stages of the competition. And so, people may have a second team, they'll have players that they follow. It is less exciting. Look, for our business in Italy, we're very sad Italians are not here.

Lance Glinn:

Which is shocking.

Peter Jackson:

It is.

Lance Glinn:

And again, as a casual soccer fan, I couldn't imagine a World Cup without Italy. I guess we're about to see one.

Peter Jackson:

Again, it's not the first one.

Lance Glinn:

As someone who doesn't follow it as closely as, again, a diehard does, when I first heard it that Italy wasn't participating or didn't make it. I guess not that they're not participating, they didn't make it. I was like, come again? Are you sure about that? That's shocking, honestly, but it makes sense. It makes sense from a Flutter standpoint and the impact that it would have on teams in your markets that end up going far. Not many companies obviously have the level of presence that Flutter has globally. How does having these leading brands in multiple countries really provide an advantage for Flutter, especially for a tournament like this?

Peter Jackson:

I think the big benefit we get from our global scale is it allows us to invest in developing those products and capabilities to better serve our customers. And so, the Super Sub product is something we developed to us where we can make it available for the customers of FanDuel. We have a fantastic soccer product in other markets. And so, although it's not the biggest sport in America, it means that actually the FanDuel customers are going to have access to the best product in America. So, we get those benefits. And look, typically now, people are betting on players. It's about the player narratives. It's exactly the same as really we see in people following the NBA or football. The outright winner is important, but actually which players are scoring the three pointers or-

Lance Glinn:

Player props, so to speak.

Peter Jackson:

So, that stuff actually will have a bigger bearing on our financial results than which team wins.

Lance Glinn:

Got it. And as we begin to get towards the end of our conversation, looking beyond the tournament itself, we've obviously talked about what this could do and what it can mean for soccer in the United States. If this World Cup hits its potential, what do you think it could unlock in terms of growth for the sport and for Flutter as well?

Peter Jackson:

Well, when we look at soccer here in America and look at it through the lens of what our customers are betting on, clearly there's some bias because of the states that people can bet and not. We actually see that people are betting more on the English Premier League than on MLS. And there'll be a lot of the players that people will be familiar with in this tournament, they'll see in the English Premier League or they'll see in La Liga or they'll see in some of the other Europeans-

Lance Glinn:

In the major European leagues.

Peter Jackson:

In the major European leagues. I think it'll be interesting to see how those mixes change and see to what extent, when the soccer seasons restart, if people have watched some players do some amazing things, whether they'll continue to bet and follow them.

Lance Glinn:

So, Peter, when it's all said and done and you get a chance to look back, the final match is over, whoever wins at New York, New Jersey Stadium, they call it, for the World Cup, whoever ends up winning and holding up that trophy, how do you define a successful World Cup for Flutter when you can really all look back on it?

Peter Jackson:

Well, ultimately, I'm expecting that the winner of the World Cup will be Flutter. With all of the brands that we have operating around the world, if we can deliver brilliant experience for our customers, then that's what I'd like to see happen. There are games we'll win money on, games we'll lose money on. And some of those short-term spikes in margin, that's not what's important. What's important is that we can showcase our fantastic product that we spend a lot of time and energy developing, and bring that to a new audience, and so they can see what a fantastic experience it is betting with FanDuel.

Lance Glinn:

Well, Peter, I know there's a lot of buzz around both New York City and the country as a whole for this World Cup coming up. Thank you so much for joining us Inside the ICE House.

Peter Jackson:

Thank you very much.

Speaker 3:

That's our conversation for this week. Remember to rate, review, and subscribe wherever you listen. And follow us on X @ICEhousePodcast. From the New York Stock Exchange, we'll talk to you again next week Inside the ICE House. Information contained in this podcast was obtained in part from publicly available sources and not independently verified. Neither ICE nor its affiliates make any representations or warranties, expressed or implied, as to the accuracy or completeness of the information. And do not sponsor, approve or endorse any of the content herein, all of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the proceeding conversation may have been edited for the purpose of length or clarity.