24 January, 2022

CEO special: Sliding doors

FanDuel CEO Amy Howe speaks to Tim Poole about having an identical twin sister, learning at McKinsey & Company, turning FanDuel into a $7-10bn brand and much more

If it were not for the Covid-19 pandemic, Amy Howe might not be FanDuel CEO right now. In fact, but for a sit down with her father after university, Howe might have missed out on a career in management and consulting altogether. Indeed, when Howe opted against running her family’s food business, she instead pursued a distinguished pathway involving roles at Accenture, McKinsey & Company and Live Nation Entertainment. It is for this reason the FanDuel CEO describes her professional and personal life as “a series of sliding doors.” And, whatever might have been, Howe is now one of the foremost leaders in one of the world’s most exciting digital markets.

It all started in Eden, a small town outside Buffalo, New York, populated with less than 8,000 people. Howe went to a small local public school and received a “great education,” later attending Cornell University. But Eden bears more relevance for the executive outside the classroom, as she tells Gambling Insider: “Eden’s a very rural farming community and it’s a very hard-working, high-integrity area. I always say I got my grit from growing up there; if you’ve ever been there, you’ll know why.”

Seeing double

Howe’s grit, and competitive side, has always been helped by the fact she has an identical twin sister. “When you grow up as an identical twin in a small town, you are competitive!” she laughs. Joining Amy in the Haveron (Howe's pre-marriage surname) household, and as a potential partner in running the family business, was her sister Kelly (now Kelly Ungerman). In fact, Kelly joined Amy far beyond the household, with the two actually following identical career paths until Amy joined Live Nation. They both joined Andersen Consulting (now Accenture) and McKinsey, where Kelly is still a Partner and has been for 21 years.

The Haverons’ decision to join the firm kick-started Amy’s career in consulting. She spent three years in the Chicago office, before heading to The Wharton School of the University of Pennsylvania to gain an MBA. After Wharton, McKinsey & Company came knocking, “one of, if not the, best management consulting firms in the world.” What followed were some of the most formative years of Howe’s career.

Despite her high-level education, it was during her time consulting where she learned “the art of business and how to solve very complex problems.” Specifically, Howe highlights learning how to influence people to take action – and particularly people who don’t report to you. “In the end, I think I spent 17 years in consulting, with the majority of those at McKinsey in the Southern California office,” she reflects. A little of Howe’s competitive streak comes out as she adds: “I believe we [herself and Kelly] are the only twins that ever made Partner at McKinsey.”

The greatest asset

As explored in past issues of Gambling Insider, the route to CEO can be a varied one. For Howe, years of consulting enabled her to influence others, but also to learn from different sources. At Accenture and McKinsey, one learning stands out: “People are your greatest asset. When you come from a professional services firm, it’s the people that are helping you create intellectual property. So I think I learned the importance very early on of attracting, developing and retaining the very best talent in the world. I brought that with me to every future opportunity I’ve had.”

Perhaps even more pressing for the FanDuel CEO, however, are the values of a meritocracy. For Howe, tenure matters little when building a “really high-performing organisation.” “It truly is about who is the most talented, who has the best skill set and who’s ready for the job. Philosophically, I believe very strongly in a meritocracy,” she states unequivocally.

In her career to date, Howe also admits she owes some of her success to those who have advocated opportunities that “candidly, I could not create myself.” The executive namechecks Live Nation Entertainment CEO Michael Rapino here, as well as Flutter Entertainment CEO Peter Jackson. Someone she reserves special gratitude for is Laxman Narasimhan, now CEO of Reckitt Benckiser Group, without whom Howe would not have made Partner at McKinsey.

An obligation to dissent

Inevitably, the FanDuel CEO always gets asked what it’s like to be a senior female executive in a male-dominated industry (“both live entertainment and sports betting are, by the numbers, certainly male-dominated”). The executive is so used to discussing this topic, in fact, that she addresses it without us raising the question. She explains: “I learned early on, particularly at McKinsey, if you weren’t comfortable finding your voice, you weren’t going to be successful.

“McKinsey talks about it from day one when you come into the organisation as an associate; they talk about obligation to dissent. This means ‘we don’t care if you’re straight out of undergrad or business school, you have an obligation to express your point of view; and we value your opinion as much as we value a senior partner at the firm.’ If you can’t figure that out, you’re just not successful at the firm.”

Although this is culturally hard to instil in corporate America, Howe remarks, it was how she was brought up in business given the DNA of a firm like McKinsey. This, along with the grit she gained from Eden, is why when Howe transitioned to Live Nation – operating in a very male-dominated industry – she “never thought twice about the fact I was the only woman in the room.”

FanDuel: The journey begins

Returning to the “series of sliding doors,” Howe goes into detail on why she might not be at FanDuel today were it not for the effects of the pandemic. This is a thought-provoking concept considering she views her current role as a “once-in-a-career opportunity.” Before being appointed Interim FanDuel CEO in February 2021, then permanent CEO in October, Howe was nearing eight years at Live Nation and ran the North American division for Ticketmaster. The obvious problem, however, was that the pandemic “literally shut the entire live entertainment industry down for a good year and a half or so.” It was the biggest crisis the company, and sector, had ever seen.

Howe steered her company through this – but then admits “we were in a bit of a holding pattern.” It was then that FanDuel reached out. “If it wasn’t for the pandemic, I may not have taken advantage of this chance. But as I learned more about it, it was a once-in-a-career opportunity and I couldn’t have been more delighted,” she beams. “As I said, when I was interviewing, people kept saying it’s a once-in-a-career opportunity and it was very clear to me that it was. Listen, I will say so far it’s been one of the most rewarding chapters of my professional career and I’m just getting started.”

Given FanDuel’s years as a daily fantasy sports operator, and the meteoric sports betting rise that followed the overturning of PASPA in May 2018, Howe acknowledges she is “very fortunate to step into a role where we’re in a leading position in the US.” In her words – and many others’ – FanDuel is America’s number one sportsbook, having scale and diversification others simply can’t match, and being backed by parent company Flutter to create a “pretty spectacular position to be in.” FanDuel and DraftKings have, for years now, been synonymous with mobile sports betting in the US. Indeed, even as the BetMGMs, Barstools and Caesars carve out their market positions, FanDuel and DraftKings remain the pace-setters.

Casino and iGaming

Naturally, though, in such competitive state markets across the US, resting on one’s laurels creates a recipe for disaster. That’s why Howe and the FanDuel team want to utilise Flutter’s decades of experience and boost, for one, the brand’s online casino offering. “It’s been phenomenal; obviously it’s a very competitive industry right now but we’re really focused on a few things,” she outlines.“One is strengthening that position as America’s number one sportsbook; we came out of Q2 with a 42% market share, and we need to continue to strengthen that moat, particularly on the product side. My second big objective is to really elevate the importance of the casino and iGaming segment. It’s critically important to our overall portfolio; we’re sitting here with Flutter, the largest online gaming operator, and we have tremendous assets we can and haven’t yet fully leveraged. So casino, you’re going to see a lot more coming in that space.”

When Gambling Insider asks how FanDuel can retain its market share amid competition from DraftKings, BetMGM and the like, the CEO reiterates those concepts of scale  and diversification: “Just to contextualise these numbers for you, by the end of the year we’ll be $2bn in revenue; just two years  ago, we were $500m in revenue. Now we’ll hit $500m in one quarter. We think at $2bn that puts us 40-50% bigger than our next biggest competitor in the US. So we have had scale and diversification, meaning breadth of portfolio, that candidly other operators haven’t.”

Bigger than Gatorade

If those two factors are FanDuel’s main competitive advantages, product and marketing are what Howe terms the operator’s “two big drivers of success.” FanDuel will only retain its customers by possessing the most distinctive offering in the marketplace, according to the CEO. One such example is same-game parlays, with which FanDuel was first to market in 2019. It was a product that migrated from Australia, allowing the brand to “leverage decades of experience and pattern recognition” from Flutter colleagues overseas. As many as 80% of active NFL users have used the product this season, indicating heavy engagement. In Howe’s words, “even if the game’s a blow-out, people are watching because they want to see how their bets played out.”

On the marketing front, meanwhile, Howe champions the fact that FanDuel “rivals some of the biggest sports brands in the world.” In states where sports betting is legal, for instance, FanDuel’s activation numbers show an awareness that exceeds Gatorade – the 51-year-old sports drink company sold in 80+ countries the world across. “The awareness and usage numbers are really pretty spectacular,” Howe tells Gambling Insider.

“We are building the next iconic sports and gaming brand. This is not just about the fact FanDuel’s a betting platform. We want to be that next iconic brand. Having come from live entertainment, we play a role in delivering unforgettable moments for consumers. You remember your first concert, right? And you probably remember your first big sporting event, as well? For us to be delivering those experiences, that’s where we want our brand to sit.”

A public gamble or a private Flutter?

Howe has very much taken the helm at a winning team with FanDuel. Yet the unavoidable challenge that poses is the requirement for extremely high standards. A key question, fuelled by media speculation over the last few months, is exactly how the operator can maximise its long-term success. Does it continue utilising the resources and experience of parent company Flutter, or does it go it alone – perhaps via a SPAC (Special Purpose Acquisition Company) or IPO?

We put the question to the FanDuel CEO. “I’d say a couple things,” she responds. “First and  foremost, myself and the management team, we’re laser focused on winning in the US right now. We’re in the middle of the NFL and NBA seasons; those are the two biggest seasons, both from an activation and a handle perspective, so we cannot afford to take our eye off the ball. That’s the first thing I would say.

“The second is, candidly, we have what we need to be successful. But, of course, Flutter and the Board are keeping their options open. If we decide we need to move in that direction, or we want to, that’s a decision we can always make. So I’ll let Flutter comment on that when they’re ready to.”

Critical positioning

Whatever FanDuel and Flutter ultimately decide here, Howe is well aware of her expectations. When Gambling Insider asks what the hardest part of being CEO is, the first area she singles out is “how to position FanDuel to be a $7-10bn company.” Those are valuations Howe sees as well within the brand’s reach, depending on how quickly new states legalise sports wagering. “Making sure you can position your company and scale effectively to meet the demand in the market is going to be really critical,” she affirms, projecting that within the next 18 months, as many as eight more states could be coming online.

Another area Howe highlights is responsible gaming – and it’s worth mentioning she is first to bring this topic up without Gambling Insider bringing it to her attention. “We feel a tremendous sense of responsibility to make sure we can lead around responsible gaming,” Howe says. She then rightly points out that there is far more regulatory scrutiny facing more mature markets across the Atlantic Ocean. Supporting that point, at the start of 2021, Keith Whyte, Executive Director of the National Council on Problem Gambling, told Gambling Insider the US is far behind the UK in terms of responsible gaming.

As such, forward planning certainly makes sense in this department. In Howe’s own words: “FanDuel is taking a very proactive stance on responsible gaming. While in the early days it’s not necessarily a challenge right now, we take it on as a challenge. Simply because we think it’s important for the long-term viability of both the industry and our company.” This type of thinking, if backed up by action, will save FanDuel’s compliance teams both time and effort in the future. Other US-facing operators may wish to take note.

The one-screen experience

Responsible gaming in the US, though, will be a tough nut to crack. Legal sports betting is still in its infancy – and yet the proliferation of markets across the US has given it a headstart over some of its international counterparts. More specifically, there is convergence happening in the US between sports betting companies, mainstream broadcasters and rights owners. This is in stark contrast to more traditional markets in Europe, where public sentiment is far more anti-gambling. Even Disney recently posited that sports betting will not hurt its family image (despite campaigning against legal sports betting in Florida only a couple of years ago).

FanDuel is no stranger to this phenomenon, capitalising earlier this year by signing an exclusive content deal with the Associated Press. “You’re right, there is this convergence of sports betting, the broadcast owners and the rights owners – we partner up with the biggest leagues in the world,” Howe comments. “From a business perspective, it’s a very simple equation: we’re always trying to drive the most efficient acquisition, so we’re looking at customer acquisition costs, relative to the value of the customers we’re bringing in. Who are those media partners and distribution channels that give us the most efficient customer acquisition costs? We’ve made some important bets there, not just media but some of the rights owners, as well.”

FanDuel’s partnership with the NFL is an example referenced by Howe, one that makes the operator’s customer acquisition “both far more efficient and effective.” Integration is key. When highlights are integrated into the app, or odds integrated into the broadcast itself (something FanDuel was able to deliver as early as the Australian Tennis Open in 2019), convergence is so high Howe believes a second screen is no longer needed. In modern society, that’s saying a lot. “It’s about one screen for the consumer. We fundamentally believe that’s the direction   things are going,” she notes.

“I think ultimately it’s interesting to hear [NBA Commissioner] Adam Silver talk about this: you could imagine a world where it could be personalised. If you’re sitting at home and want odds in the broadcast, you can select that option. But if you have kids at home and for whatever reason you don’t want odds, you can have a different view of the world. We’re not there yet but we absolutely see a greater convergence of sports betting, rights owners and the broadcast partners integrating into one experience. When we do that, we’re absolutely seeing higher engagement and ultimately higher lifetime value numbers for our customers.”

Stay humble, stay hungry

As we approach the end of our discussion with the FanDuel CEO, we ask what the single most enjoyable aspect of her job is. “Building      a really high-performing team," Howe replies. "One of the things that really attracted me to FanDuel was the quality of the management team and the organisation. We have a set of operating principles: there’s a bunch of them but one of my favourite is ‘stay humble, stay hungry.’ There’s a culture in our organisation where we’re never happy with where we are and we’re constantly pushing ourselves to be better.

“As I say, I’m a very competitive person and we’re part of a publicly traded company; but having the privilege of advocating for really successful people in the organisation, bringing great new talent to the organisation, and building something that is bigger than any one of us individually, is exciting to me. I feel like at this stage in my career it’s my opportunity to give back and pay it forward to the next generation.”

Howe is also “very excited about bringing much-needed diversity to the industry – both in terms of gender and people of colour.” During Howe’s time at Ticketmaster, 40% of the organisation was female, leading to concrete, higher-performing results and instilling a sense in the executive that diversity is not just a vanity metric. “The stats are compelling,” she says. “McKinsey did a study that showed 25-30% higher performance if you can really crack the code on diversity and inclusion. And, candidly, future employees, if they don’t’ see it, they’re not going to come and work for you.”

The final word

As a mother of three boys, aged 15, 12 and 10, Howe wears “that mum hat” and understands the importance of educating children at an early age. As the CEO of the “largest gaming company in America,” however, she too feels the responsibility to lead on responsible gaming. Alongside championing the business case for diversity, Howe singles this out as a personal target in her career.

When Gambling Insider asks Howe if another of her goals is perhaps to compete with her identical twin sister, the CEO bursts out laughing. “I love it! Oh my gosh, years of competing. I will tell you, she was actually valedictorian, so she beat me in High School – but I made Partner six months before she did! Right now, we are each other’s biggest advocates and we always have each other’s back; there’s no more competition, we can be delighted for each other’s success. We finally, at the very ripe age of 43, took different paths.”

Although Howe jokes that this separation of paths may have taken longer than it should have, it’s abundantly clear she has stepped through those sliding doors to now follow a road truly unique to her. And it’s one that could well shape the most-talked about betting marketplace in the world.