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Fanduel CEO on company outlook amid COVID-19 recovery: 'We've just seen incredible pent-up demand'

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Fanduel CEO Matt King joins the Yahoo Finance Live panel to discuss the latest outlook for sports betting.

Video Transcript

- Fanduel's parent company, Flutter, they were out with earnings results today, revenue more than doubling in 2020, thanks in part to the jump that we've seen in online sports betting during the pandemic. We want to bring in Fanduel CEO Matt King for a little bit more on the earnings results that we got.

And Matt, we've been talking about this jump that online sports betting has seen, not only over the last couple of months, but really over the past year, ever since the start of the pandemic. What do you attribute this growth to? Is it all because people are just stuck home during the stay-at-home orders during the pandemic?

MATT KING: No, you've got a couple of things going on. One is you certainly have new states openings. That's just increasing the size of the market. Second is you still have a lot of people that were betting illegally throughout the pandemic who are finally trying legalized options. And then you have a lot of product innovation driving increased awareness for the products and also adoption for the products.

- Your parent company is expecting that the total addressable market is going to grow in less than four years to $20 billion. Are they setting targets, say, for you as to what percentage of this Fanduel might win?

MATT KING: We're really pleased with the leadership position that we've built so far. And we're competitive people. So we're going to look to defend our leadership position. We have over 40% market share in the markets that we operate on sports betting. And we're going to look to defend that.

- Matt, how do you see demand going forward? Because we certainly are still in uncertain times. Economic recovery, yes, we are in a better position than we were a couple of months ago. But there's still a lot of unknown ahead.

MATT KING: There is absolutely a lot of unknown. But the reality is a lot of our business is powered by people who are spending $5, $10, $20 a week. It's a very casual form of entertainment.

It's something that tends to be very recession resistant, particularly if you equate us to the more regional gaming operators where they've proven to be very recession resilient. We think our business model is one that will be able to grow through whatever the economy looks like going forward.

- There was also the mention that Sportsbook is live in 10 states, adding Michigan and Virginia. Who's next to come online?

MATT KING: So we got a couple of places where we're looking to get kind of over the goal line, so to speak. So in Maryland and Louisiana you had two referendums that passed in November with overwhelming margins in support of sports betting. There are some legislative and regulatory work that needs to go there.

And then there's a number of states that are looking at both, frankly, sports betting as well as iGaming legislation in the upcoming session, with the intention of being live for NFL this year. And the reason for that is because people, I think, understand this is really common sense legislation. It's an easy way to raise tax revenues in a way that constituents actually enjoy the product. And it helps fill a little bit of the COVID hole that exists with a lot of states.

- Matt, I want to go back to what you said before. You said that your business is largely recession proof. But I'm just curious, have you seen any correlation at all to a jump in activity on your platform to when some of these stimulus check rollouts have happened?

MATT KING: Not really. So much of our business is tied to sporting events. So the overwhelming factor has been less about a stimulus check drops and everybody shows up at the store. It's more about as we've gone through the reopening of the economy and the reopening of sports, we've just seen incredible pent up demand there. But it's hard to tie that back to stimulus.

- All right, Matt King, CEO of Fanduel. Thanks so much for joining us today.

MATT KING: Thanks, guys.