Sports might have been sidelined by COVID-19 in 2020, but online sports betting was not. In fact, Flutter, the parent company of FanDuel — one of the major online sports betting outfits in the U.S. — turned in an impressive 81 percent revenue growth in 2020.
While some of that growth can be attributed to people looking for something to do while in lockdown, there’s another way in which the pandemic affected the industry. As states struggled to fill up their drained coffers, sports betting suddenly seemed like a more acceptable revenue stream to local governments across the country. Even longtime anti-gambling New York Governor Andrew Cuomo declared his support for online sports betting earlier this year. Currently, 11 states allow access to full mobile betting, with six more seriously eyeing the income stream in 2021.
While the pandemic may have driven demand for and access to mobile sports betting, in a conversation with Trent Striplin, FanDuel’s director of customer finance, PYMNTS found that overall consumer behavior hadn’t really been altered all that much as a result of COVID’s rampage. He did say that, more than ever, customers are anxious to get their payments as quickly as possible — showing that the field is ripe for the use of the much-anticipated real-time payment system.
“Withdrawal speed has always been important to our customers,” Striplin noted. “It’s the No. 1 thing that we hear about, and one of our top priorities right now is to speed up customer withdrawals, and get them out the door as quickly as possible.”
Got Cash?
The conversation with Striplin also revealed a trend that FanDuel has seen in two out-of-the-ordinary payment options: disbursing customer payouts as refunds back to the credit cards used to open accounts, and in-person cash payouts. That’s right, cash.
“Our payment strategy is to give customers as many options as possible, whether that’s via card, via wire or via cash at a retail location, which is one option we offer that’s kind of cool,” said Striplin. “At many of our retail sports book locations, such as the Meadowlands in New Jersey Valley or Valley Forge in Pennsylvania — really anywhere that we have a retail sports book presence — we allow customers to deposit to and withdraw from their online accounts using cash, which has really shot up.
“The other payout option we’re working on that I think you’ll you hear a lot of buzz about in the industry is OCT withdrawals — being able to withdraw back to a customer’s debit or credit card,” he continued. “We launched that product on the racing side of the business about a year and a half ago, and it’s almost making up half of our total withdrawals in terms of percentage. So customers really liked that — outside of a wire, it’s probably the fastest way for them to get funds back into their bank account.”
While these payout options are serving FanDuel’s customers well at the moment, Striplin said he will keep a close eye on the evolution of real-time payments and same-day ACH. He also sees P2P apps like Venmo playing a bigger role in getting winnings in customers’ hands as quickly as possible.
Fighting Fraud
Despite all the focus on payment methods, Striplin also mentioned that it’s really just one component of speeding up transactions.
“One thing that can be difficult for customers to understand is that it’s not just the processing part,” he said. “That’s the easy part. But because we’re in a highly regulated industry, we’ve also got to review for fraud. We’ve got to look for account takeovers, AML concerns, gameplay, all that good stuff. So we’re trying to improve our efficiency from a review standpoint, which I think is going to be the main driver in reducing those withdrawal times.”
Striplin noted that he is starting to see more of an acceptance of gaming transactions by major banks. For a long time, big players like Chase, Wells Fargo and Bank of America were declining customers’ FanDuel funding requests 100 percent of the time. But as online gambling expanded state by state and has been taxed and regulated, the banks are starting to loosen up. In the last two years, Striplin has seen both Wells Fargo and Chase approving debit card transactions for customers interested in getting in on FanDuel’s action.
Lessons From Netflix
Ultimately, Striplin said, FanDuel is “fan-obsessed,” with the majority of its focus aimed at making the customer experience as smooth and enjoyable as possible.
He had good training in that arena as the customer success manager of Netflix, back when the company was going through a turbulent time as it transitioned from DVD delivery to streaming. Striplin said the change wasn’t communicated as clearly as it should have been to Netflix’s customer base, which led to high levels of customer frustration.
“It taught me from a customer service perspective to empathize, to be patient and to communicate with frustrated customers,” he said. All valuable skills to have in his back pocket as FanDuel strives to speed up payments to its customers, while keeping them free from fraud and happy through every aspect of the online betting process.
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