Good day and welcome everyone to the Flutter Entertainment Q3 results update call hosted by Peter Jackson, CEO of Flutter Entertainment, along with Jonathan Hill, CFO. My name is Jo and I'm your operator today. During the presentation, your lines will remain on listen only, but if you do need any assistance, just key star then zero on your telephone and a coordinator will be happy to assist you. If you would like to ask a question today, please key star then one on your telephone. I'd also like to advise that the call today is being recorded and I would like to hand over to your host, Peter. Please go ahead.
Thank you, Jo. Good morning, everyone, and thank you for joining our Q3 trading update call. As you said, I've got Jonathan Hill with me this morning and hopefully you will all have had a chance to review our statement at this point, so I'll just touch on a few key issues before I open up for questions. Overall, the group had a good third quarter, reporting revenue growth of 12% on the back of 13% growth in AMPs. In the U.K. and Ireland, we grew AMPs by 19% with flat revenues reflecting challenging sporting calendar comps, less favorable sports results year-on-year, and the ongoing safer gambling initiatives that we have introduced. In Australia, we had a very strong quarter, reporting player growth of 24% and revenue growth of 20%. Sportsbet benefited significantly from the stay-at-home restrictions that are in place during the quarter.
We estimate around two-thirds of our turnover in the quarter came from customers in states where COVID-related restrictions were in place. We remain pleased with the levels of player retention from last year. In international, revenues are in line with our expectations, with revenue up 6%, excluding the impact of German regulatory and tax change. We estimate that the unexpected suspension of our Dutch operations will cost us GBP 10 million EBITDA in Q4, and we hope to be licensed in the Netherlands by H2 next year and will invest heavily in that market at that point to reengage with customers. Finally, in the U.S., we're very pleased with our Q3 performance. In what was certainly the most competitive start to an NFL season to date, where competitors threw pretty much everything at us, we delivered a 42% share of the sports betting market.
We also doubled our sports and casino customers year-on-year, and are now regularly seeing staking volumes on NFL Sundays that match our Super Bowl performance. As you'll have seen from our statement, sports results since the start of Q4 have gone against us in all regions, with our gross win margin over 400 basis points below expectations. As a result, the EBITDA impact has been GBP 60 million for group ex U.S. and $15 million for the U.S. The majority of the GBP 60 million lands in the U.K. and Ireland, where football results in particular have gone against us. This is just the business we're in, and sometimes results go against us. The October results are actually just a reversion to the mean in U.K. and Ireland, where we benefited from favorable results in H1.
The recent reversal brings the actual margin for the division back to expected levels for the year. As we look to next year, we're looking forward to continue to expand our business in the U.S. with a record seven new states expected to go live in one year. Closer to home, it now appears that there may be a delay to the publication of the U.K. Gambling Act White Paper. We as a group, though, are not waiting to make changes in this area as evidenced by the measures we've already introduced this year, in areas such as affordability and product staking limits. While the specifics of the Gambling Act review remain unknown, it seems unlikely to us that 2022, will be a normal year of growth for the U.K. online market.
As such, we would encourage analysts to consider what a realistic expectation should be for market growth, knowing that the current status quo is unlikely to be retained. Overall, though, I'm very pleased with the underlying health of our business and the progress we're making. Our pro forma online player base is 46% bigger than it was just two years ago, and we look forward to growing that again next year as we further expand in the U.S. and elsewhere. With that, we'll be happy to take any questions. As usual, I would kindly ask you to limit yourself to two questions each to start with, and then if we have further time, we'll be happy to take any follow-ups. Jo, over to you.
Thank you, Peter. Yeah, everyone, if you would like to ask a question today, please key star then one on your telephone. If you then decide to withdraw that question, simply key star two. Any questions will be answered in the order received, and you will be advised when to ask your question. Just a reminder, everybody, please key star then one on your telephone. Thank you. Our first question is coming from Michael Mitchell from Davy. Please go ahead. Your line is open.
Yes, good morning, Peter. Good morning, Jonathan. Thanks for taking my questions. One on the U.S. and one on the U.K., if I could. Starting with the U.S., in reference, I was being encouraged with your own customer engagement at the beginning of the NFL season. It's clearly been a competitive period. I wonder if you could just comment on the competitive intensity, of the industry in recent weeks and months, and how you found it was fair kind of from a customer engagement perspective through that period. Then secondly, in the U.K., as you referenced since we last spoke, obviously there's, you know, it's becoming more clear that the U.K. White Paper could be delayed beyond the end of the current year.
As you say, 2022 unlikely to be the year that, you know, was kind of previously anticipated. I wonder what your own thoughts are in terms of what U.K. online market growth could be in 2022. Thank you.
Morning, Michael. Well, look, if I take your questions in the order that you've put them. You know, look, the competitive, situation in the U.S. with the launch of the NFL was the, you know, the most severe that we've experienced so far. I mean, I think every year we expect to see, you know, renewed levels of competition and that, you know, that was the case this year. People, you know, trying to claim their positions in the market. You know, there was a lot of sort of free money flowing around. So, you know, I think we were very pleased with the way in which we performed.
If you look at the market share figures that we've shared, you know, in the release this morning, we were, I think, very pleased with the outcome that we've seen. You know, clearly benefiting from the partnership we have with the NFL. Of course, we've now got the NBA season restarting, and I think we're pleased with the way that is performing. I think ultimately, while competitors may be giving customers sort of effectively free money and, you know, very enticing looking levels of free bets, what people ultimately want are great products. We have the best products in America, and that's what has customers coming back to our platform time and time again. I think that's what's standing us in good stead at the moment in the U.S.
You know, I've talked about our parlay products in the past example. The fact that that's well integrated into our product, I think is really helpful to us. You know, we're pleased with the way that the business has performed in this football season. I think kudos to the team under Amy's leadership, who's done such a great job for us. As it relates to the U.K., and the publication of the White Paper, I mean, look, it's obvious that the U.K. government has some very significant issues to wrestle with at the moment. Actually a number of those issues rest with DCMS.
Look, while I know that the publication of the White Paper is important, it's probably not their utmost priority at the moment. In the meantime, though, we have been, you know, very much focused on putting in place a number of actions to support our focus on safe gambling. If you look at, you know, the things we're doing, whether it's the daily deposit limits, the £10 slot stake limits, the mandatory deposit limits for, you know, 18- to 21-year-olds, banning credit cards in Ireland, the under 25 policy changes that we've communicated will be in place end of the year, and some very significant enhancements to the way in which we engage and communicate with customers. We're doing an awful lot, and I think that is important.
I think we shouldn't expect there to be a sort of big bang set of changes that come from the publication of the White Paper. I think there's gonna be a number of changes which operators choose to make. I think there'll be some regulatory interventions, and I think there'll possibly be some changes which will be encouraged by the Gambling Commission. I think with all of those things happening, I know it's very difficult to try and assess the impact of them. I think it would be hard to imagine that the online market in the U.K. would experience any real growth into next year with the fact we know in the face of all those interventions and changes which we expect to happen in the market.
Great. Thanks for the color, Peter. Thank you.
Thank you. The next question is coming from Ed Young from MS. Please go ahead. Your line is open.
Good morning, and thanks for taking my two. I also have one on the U.K. and one on the U.S. Perhaps for the U.K. to start with. The GBP 60 million impact you've quantified from margin this year appears to be mechanically sort of assuming not a lot of benefit from recycling going forward or perhaps a very normalized situation for the following two months rather than any kind of benefit from increased staking. Is there a particular reason that's the case? Is there anything changing in play behavior, any reason why you haven't done that? Or is it sort of conservatism for what appears to be a relatively large impact for a relatively short period? The second one on the U.S., you mentioned the promotional environment there.
I wonder if you could just give any view on the percentage of players or the rough proportion of players and the market share players you have who are sole-use customers of your product. Obviously, it's one of the strengths in the U.K., particularly in Sky Bet. You've got a lot of players who only play with that brand. Just in an environment where money is being thrown around, I'm just wondering if those kind of customers are generally gonna be less loyal than perhaps you experienced. Any comment on sole-use users would be appreciated. Thanks.
Yeah. Ed, maybe I can take the first. Certainly the GBP 60 million is the point that we find ourselves at the end of the 24th of October. I would just cast back to earlier in the year where we've seen, particularly in the U.K. and Italy, positive sports results, in fact, all the way through to the 30th of September, which we then managed to give back all of that by the 24th of October to end up relatively flat. During that first nine-month period, even though we were experiencing bookmaker-friendly results, we didn't really see a degradation in the staking levels during that period. While we were looking for those trends, we didn't necessarily spot them.
What will happen from here to the end of the year, I think we've taken a sensible view of presenting you where we are at this point. Will some of that come back through recycling? We would hope so. Have we baked that in? Not at this point, because obviously we don't exactly know given what we've seen in the first nine months of the year and those correlations between staking and results. Ed, with regards to your U.S. question, I mean, look, I think typically we see that U.S. consumers have many less accounts. They're much more likely to have one account than we would see in the equivalent situation in the U.K.
Partly that's because of the onerous degree of sort of, you know, opening an account and having to share sort of, people's Social Security details and that type of thing. You know, people are more likely to have, you know, a smaller number of accounts. Certainly when we look at, our, you know, the metrics that we can see, which is the lifetime values, one of the metrics that we've been really pleased with is the extent to which we've seen very high degrees of retention from customers. You know, we've seen very frequent, use of the product. That leads us to believe that we have a, you know, a very high share of those customers' wallets.
It's hard to gauge as clearly as we can do in, you know, in the U.K. market with someone like Sky Bet, where we know we have so many surplus customers. I think we've been very pleased with the way that customers have been engaging with us. I think what we've seen is, you know, even if they've availed themselves of some free money effectively, in, you know, in and around these promotions, you know, when we look at the sort of staking, you know, handle volumes on our platform, you know, we believe customers are coming back for the vast majority of their business. I think the other point I'd add is the place where we probably see in our existing business very high levels of surplus is in highly recreational businesses.
when we look at Sky Bet, when we look at Sportsbet, and we aren't necessarily in the U.S. market at that, you know, highly recreational end, which we've got in those other two businesses at this stage in its evolution of development.
Thanks very much.
Thank you. The next question is coming from Simon Davies from Deutsche Bank. Please go ahead.
Morning. Two from me, please. Firstly, you refer to a new reward scheme for the PokerStars brand. Can you talk us through how that works, the mechanics and the likely cost of this? What are your expectations on poker and your ability to return that product vertical to growth? Secondly, can you talk about the most recent state launches, Arizona and Connecticut, and what you're seeing there in terms of the competitive landscape and volume levels relative to expectations? Thanks.
Yeah. Good morning, Simon. Look, I mean, I think it's in what we're doing with poker, we've done quite a substantial change to the way in which the reward scheme works, and it's probably, you know, not quite the time for me to share all the full details on this call now because it takes a lot of time up for me to take you through all of these. We can get something to you if you'd like to see it in detail. Essentially we have increased the level of generosity that we make available to customers on the platform. We think it's going to help retain customers on our site and to boost our share of liquidity.
I think when we think about growth prospects, though, we have to look at it from a customer perspective rather than a product standpoint. You know, if I take September, you know, that was the, you know, we saw a record high level of GGR from our, you know, casino-acquired customers in the month. I think it's a good indication of, you know, our focus and, you know, that we have for the business. You know, casino is a very important part of what we do. When we think about it from a customer perspective, that's where the growth is coming from. No matter where we source the customers from, whether it is, you know, casino directly or into poker first and then into, cross-selling into casino, that's where we see the real areas of growth coming from.
I mean, a couple other points just on the sort of poker business and the scheme. We've obviously been trialing that in with 20% of our base, and we've seen, some very positive reactions from the customers and therefore we expect that when we roll this out further, it will lead to greater levels of engagement with the customer base. You know, I think we feel as if the sort of poker market share quarter-on-quarter is relatively stable. We like to think that, you know, we've sort of abated some of that decline through recent actions.
Obviously we're looking to make sure that we can, you know, maintain, if not, you know, try and push forward with that market share position that we have in the poker business.
Look, Simon, in terms of the state launches, you know, I think, you know, I would look and characterize some of the sort of the, you know, I mean, it's not really fair to say the mature states, but you know, places like New Jersey and Pennsylvania where we've been operating for a while, it sometimes feels like some of the other operators have given up in those markets because they see that we've got such a strong and commanding lead. I think in the newer states, we see that new operators will try really hard to compete with us.
You know, I'm particularly pleased with the way in which we've performed in Arizona. We've seen that market mature, sort of, and grow more quickly than any other market. I think the team's done an incredible job of, you know, taking great share in that market. I'm really pleased with what we've done to date. Of course, actually, you know, Arizona itself is a state where we didn't have the benefits of the DFS base to cross-sell into, and we're reliant entirely on the quality of our products and the strength of our brand. I think the fact that we've done so well in that market shows how well both our products and brand stand in the eyes of the consumers interested in sports betting.
You know, whether it's the older states or the newer states, I think the business is performing well across the full spectrum.
Great. Thanks.
Thank you. The next question is coming from the line of David Brohan from Goodbody. Please go ahead.
Morning, guys. Just one question for me. On the Netherlands, could you just break down the guidance for next year, kind of the bridge between your $10 million in Q4 and then $40 million for FY 2022, given kind of plans to break even in H2? Is that a kind of significant marketing push in advance of H2, or what's the kind of driver there?
Yeah. The assumption is that we're often in H1 and we reactivate ourselves in H2. Then clearly there are operators who will be remaining on during the whole period, and we will have to reengage. A bit like our Return to Sport program last year in the States when they'd been offered. It just. You know, we're gonna have to reengage our PokerStars customers, make sure we get them back onto the platform and betting with us, and therefore, that's why we've guided the 40 number for next year. Okay. That's great. Thanks.
Thank you. The next question is coming from Monique Pollard from Citi. Please go ahead.
Morning, everyone. A couple of questions from me, if I can, both on the U.S., please. The first was just obviously thinking about the U.S. revenue guidance being maintained despite the poor sports results. I'm assuming earlier when you were saying, you know, you weren't taking into account recycling for the rest of the year, that will be for the U.S. as well. So is it right in thinking you would have had a significant revenue upgrade for 2021 to your U.S. guidance ex those results? Then secondly, U.S. iGaming. You mentioned in the statement that you've got a new gaming promotions platform that's now live, and that's providing some flexibility to reward multi-product players.
Just trying to understand, if you can give any guidance on how, the proportion of your customers that are now playing both iGaming and sports and, you know, where you think that can go over time?
Do you wanna deal with the first one?
Yeah. Please go ahead. In terms of the first question, obviously we talked about GBP 15 million of revenue impact, EBITDA impact. You know, that when you gross that up, you probably get to around $50 million. The other thing you need to recognize, Monique, is that as we go through the year, we'll also make decisions between, whether we spend money on our customers, either through the marketing line or through the promotions line. You know, we can decide a dollar is better spent in a promotion than it is necessarily in marketing. You know, we will make decisions, and that we have done as we've gone through the start of the NFL season to move some of that spend around.
You know, we need to take all of these things into consideration. It's not just a binary every extra dollar of revenue would go on to the guidance. Overall we're managing within that sort of envelope.
Understood.
Yeah, look, and Monique, in terms of the point about iGaming, you know, I mean, I think we've acknowledged in the past that there's more for us to do in this area. And you know, part of that was the launch of our sort of in-house promotions platform, which, you know, we've acknowledged now got out into the market. You know, so excited to see the capabilities that brings us and opportunities it provides to us. You know, the best place for us to start is the fact that we have the most sports betting customers in the United States and a very strong brand. That's what we're cross-selling into.
Yeah.
We see that the levels of cross-selling are higher in the U.S. than we had originally anticipated. That's actually one of the things that's been supporting the higher LTVs that we're seeing in the market. It's certainly higher than we would have experienced in the European markets. You know, that's something that we're very much focused on, you know, and continue to try and take advantage of the strength of our sports franchise in the U.S.
Okay. Understood. Thank you.
Thank you. The next question is coming from the line of Joe Stauff from Susquehanna. Please go ahead. Your line is open.
Thank you very much. Good morning. Two questions on the U.S., if I could. I'm wondering maybe in September, you know, it's certainly the start of the sports calendar here, if the mix for sports betting revenue for you guys, if the mix or the product mix is notably different at this point, you know, pre-game, Same Game Parlay and in-play, or is that something that you would expect is more likely to change, say, going forward? I have a follow-up to this.
Do you wanna give us the follow-up, Joe?
Sure. The follow-up is just asking about trends for, you know, monthly active users in October, as well as, if you saw the promotional environment, somewhat normalized maybe by the end of October, or was it still pretty heavily promotional through the end of October? In the U.S., of course.
Okay. Well, let me pick those up, Joe. So look, the first thing to say is, you know, from the biggest impact on our mix between sort of, you know, pre-game, you know, same game in play and all that sort of stuff is driven by the sports. So we do see different levels of penetration based on the different, leagues that are in vogue at the time. So, you know, actually for example baseball has not been as popular, you know, as we would have probably thought for some of the, you know, in play products. You know, when I think certainly about the analogies with it to cricket.
If you look at the sort of point in time we're at at the moment, NBA is something where, you know, we feel like we have a sort of a real advantage and it really plays to our strengths. The extent to which we're seeing, you know, take up of the Same Game Parlay, you know, across our customer base is something that we're really pleased with, the performance of that at the moment. You know, that's partly driven by the fact that we're seeing increased levels of recreational customers. It's partly due to the promotions we're doing.
It's, you know, and it's partly due to the way in which we're sort of getting better at integrating and promoting and, sort of making, available to our customers on our platform. You know, that's something which we know is important to customers, and I think we're really trying to dial that up at the moment. In terms of our, you know, the trends we're seeing around promotions, I think a lot of people, you know, really focus their promotional firepower around the launch of the football season and, you know, are beginning to sort of, you know, run out of dry powder to some extent.
You know, we have been aggressive, you know, as you'd expect throughout this period, and we'll continue to be so, but in a relatively disciplined way as we always have been in the States. I think, you know, we are taking advantage of the opportunities. You know, the partnership we have with NFL is something which we've been trying to exploit, you know, through the start of the NFL and with the NBA coming on stream now, that's also a league where we have very strong ties, great products available and something that, you know, customers are really engaging in.
You know, we think that some of the people who've tried to sort of grab some of the market, you know, early in the football season are probably, you know, a little bit running out of steam, and we're continuing to push hard and trying to exploit our leadership position.
Thanks, Peter.
Thank you. The next question is coming from Dan Politzer from Wells Fargo. Please go ahead.
Hey, good morning, everyone, and thanks for taking my questions. So a couple on the U.S. Any updated thoughts on timing for our listing there now that you have your CEO installed? The second would be, you know, any changes in terms of cadence for your expectation to be profitable in 2023 in the U.S., given the heightened level of promotions you've been mentioning?
Good morning. Look, we're very focused on winning in America, and we're pleased that we're continuing to do so. That's what we've tasked Amy and the team to do and to also take advantage of, you know, all the new states that are coming on stream. You know, we shouldn't forget, you know, we've had some very successful launches this year. We've got seven more to focus on next year. You know, that's a massive lift for any business to do. You know, we want to continue to ensure that we position ourselves well for that. You know, the point about the sort of increased competitive activity is something that we'd anticipated. It's not been a surprise to us.
Seems to happen every year, but and so, you know, it hasn't changed any of our views on the you know, on the extent to which we would reach profitability. You know, the thing that we're closely watching and monitoring is the extent to which any of the very large states could potentially, you know, introduce re-regulation and come on stream, you know, which would obviously have a bearing on the amount of money we'd invest in trying to take advantage of them opening up. I mean, I think also as we look at the maturing of the, you know, I was gonna say the mature states, but they're not mature states. I mean, they're only been going for maybe three, four years max.
You know, those are going in line with our expectations in terms of contribution, so we feel pretty confident there. The second thing is, you know, we expect to exit next year with 20 states versus the 12 we're live in at the minute. You know, it's the game of, you know, the existing states versus new states, and as we enter 2023 with 20 existing states, you know, we feel pretty well set up for our expectations for 2023.
Got it. Thanks, guys and everyone.
Thank you. I will just give a quick reminder. If anybody would like to ask a question today, please key star then one on your telephone. So star, then one to ask a question. Thank you. The next question is coming from the line of Richard Stuber from Numis. Please go ahead.
Hi, good morning. Two questions from me, please. The first, in the seven states that you expect to launch next year, are the economics sort of broadly similar to the states where you are currently live, or are the newly regulating states sort of wanting a greater share of the economics? The second question, not just in gaming, but I think elsewhere, there's lots of commentary around labor cost inflation. Are you seeing that in any of your geographies, you know, particularly in the U.S. and sort of, you know, particular jobs? Thank you.
Morning, Richard. Look, I mean, I think the most important thing for us in the next seven states to go live is that they are predominantly sports states, and so, you know, that definitely plays to our advantage. Look, you're right to think about the impact of market access costs, and that's something that, you know, people don't always focus on. I think for us, the most important dynamic for us is the sort of CAC to LTV dynamic. You know, we know that we can lean heavily on sort of being sports led, which most of those states are. We have a real advantage in being able to utilize both the strength of our brand, but also our DFS database to get lower acquisition costs than anybody else has in the market.
The strength of the products enables us, you know, to drive higher LTVs. I think, you know, we're excited to see, you know, what we can do in those seven states that we launch in next year. It is in terms of the labor cost inflation, look, it is impacting, you know, all businesses, you know, around the world. I think the areas that I'd probably call out that we're seeing, you know, the most pressures in are, you know, around the sort of the tech and engineering roles, where there is a degree of heightened sort of inflation.
You know, there are more people sort of on the move seeking more flexibility in the ways in which they're working, and we're trying hard to make sure that we can provide them with a great set of employee value proposition, and keep them engaged in our business. I mean, you know, ultimately, people want to work for somewhere so they can have fun and engage and believe in what the organization's trying to do, and people like working for winning businesses. You know, we're hopeful that we can continue to attract and retain the great talent that's helped us be very successful so far.
Great. Thank you.
Thank you. The next question is coming from Joseph Thomas from HSBC. Please go ahead.
Good morning. Peter, it's interesting your comments on the U.K. not likely to have much growth next year. Is that when you talk about interventions, are you talking specifically about the interventions that you've made on maximum staking limits, et cetera? I'm just wondering how much in a full year those things are likely to cost. Secondly, just on back to the U.S., also interested in your comments about competitors running out of a bit of steam. Do I take it that a lot of the competitive intensity has come from sort of the smaller, sort of startup type businesses that might be less capitalized?
Yeah, look, morning Joe. Look, in terms of the U.K., you know, I think it's, you know, we need, you know. My observation was really just trying to sort of provide, you know, some views on what we thought, you know, when things would happen to the market as a whole. You know, not just us. I think there's gonna be a range of interventions that the government may instigate, the regulators, you know, will impose and operators will put in place themselves. I don't think it will happen, you know, sort of, you know, over a weekend. I think, you know, it's something which is going to happen in a series of steps. I, you know, it's on that basis that I just.
I think it's hard to believe you'd see any, you know, real growth in the U.K. market next year. As to the specifics of which action is leading to that, you know, it's very difficult to determine. Of course, there's a number of sort of overlapping actions which can happen in any event. That's the basis in which I was making the observations. Look, in the U.S. market, look, it is a bit of a sort of land grab at the moment, and it's both from some of the sort of you know, more startup type businesses, although none of these are startups.
There are the likes of casino groups like, you know, who are throwing money around as well as some of those pure play digital businesses. None of these are sort of, you know, poorly funded sort of, you know, 10-person startups. These are sort of, you know, reasonable sort of operations, but there's only so much, you know, funding any of these businesses can access and provide free money to people before they eventually run out of it.
Thanks.
Thank you. The next question is coming from Kiranjot Kaur from Bank of America. Please go ahead.
Hey, guys. I think a lot of my questions have been answered, but just quickly on margins. Across the industry, we saw margins benefiting over the last 12 months or so due to a growing mix of recreational customers online. Could you perhaps comment on how that mix of online customers is changing now that, you know, things are going back to normal? Also second question, there's a lot of consolidation happening in the market at the moment, including the U.S. When do you think the right time is for you guys to maybe start pushing for your other U.S. brands as well in terms of customer capture? Or is this something that you're already working on? Thank you.
Okay. Kiranjot, good morning. Look, you know, from a margin perspective, you know, we are continuing to push hard to acquire as many recreational customers as we can. That's, you know. I think, you know, the bet mix and bet type from those customers has helped support a greater than expected margin. There is, you know, inevitably more volatility, when you get into sort of the parlay type bets, 'cause whilst they can be, you know, higher margins when they're positive, they can also then be more, you know, more deeply negative when they're loss-making.
You know, in the sort of couple of weeks that we called out in football, where we're loss-making in the U.K., you know, that was driven by 14 or the 15 sort of favorites winning an international break or, you know, 15 or 16 favorites winning in the Champions League. You know, when that happens and people have put sort of accumulator type bets on, you know, the sort of impact is quite significant. Albeit when things are positive, it's very positive.
You know, as Jonathan, I think I said, you know, we've now got ourselves back to the point where sort of expected margins are back to where we expected them to be, albeit, you know, the benefits of nine months and rolled back quite quickly in 24 days in October.
Look, I think the bet mix is giving us an uplift in the sort of gross win margins. Then if you look at what we then do with that gross win margin, particularly in something like Australia, which we obviously do the capital markets day, you know, we're then reinvesting some of that upside to help drive customer engagement and the size of our business through either the promotions or the marketing line.
You can see how you get back to that, the flywheel effect from being able to get greater gross win margins, being able to give back more to the customers, driving customer engagement, driving customer growth. I think that's perfectly illustrated by the presentation. Hopefully you took that out of the presentation we gave to you on Australia recently.
Look, to the point about consolidation, I mean, I think we've been at the forefront of a lot of consolidation in the industry over the last several years.
You know, we do believe the diversification and scale are important in this sector, and it appears that other people are beginning to believe that's also true as well.
Perfect. Thank you very much.
Thank you. The next question is from Clark Lampen from BTIG. Please go ahead.
Good morning. Thanks. Two for me, please. The first is on advertising. Peter, there seems to be more of a focus lately from the U.S. officials on advertising frequency and visibility. I'd love to know whether you think the U.S. over-indexes on either front, maybe relative to some of your other larger markets. Or if we're at a point now where you think operators will have to consider maybe paring back advertising to avoid potential limitations. The second question I have is on product differentiation. There seems to be a perception that as your competitors are adding parlay options and deepening those markets, that your advantages from a competitive standpoint might start to erode. What did we miss there with that sort of high level comparison of parlay options between you and your competition?
Do you expect that you're gonna continue to lead on market depth, perhaps with product innovation? If there's something else that we're missing.
Hi, Clark. In terms of, you know, the two points you raised, you know, in the U.S. market, which I think are important. From an advertising perspective, you know, we operate in many markets around the world and, you know, we have often tried to take the lead in trying to sort of, you know, push and sort of nudge the industry into getting to a more sustainable level of marketing expenditure. You know, look, we would expect to want to continue to do that in the U.S. market as well. You know, it doesn't surprise me that there are some people beginning to sort of ask questions about sort of the frequency and visibility.
You know, clearly the launch of this football season, there has been a sort of, you know, pretty significant level of marketing expenditure by lots of operators in the market. With regards to your sort of second question around sort of product differentiation, you know, I think if I look in a market like Australia, we have consistently led the market there with the sort of quality of our execution around things like parlays. Look, it's relatively easy to go and acquire the rights to a parlay product from a third party. The issue with that of course, is you give away all the upside and then from a customer experience perspective, it's not an integrated product.
It doesn't, you know, you can't then have the same sort of association with your generosity and promotional mechanics on your product. Sometimes customers may have to go to a different tab. It just may not be as intuitive an experience. We believe that, you know, we can maintain our leadership from a customer experience perspective in and around the parlay product. It's something we've done consistently in Australia. While competitors may be sort of acquiring rights to third party products to try to catch up with where we are, you know, rest assured that we have many fantastic engineers in the U.S. striving to keep us ahead of those competitors.
Of course, you know, uniquely, you know, among U.S. businesses, we have thousands of cheerleaders around the world in our other businesses who are also building products which they can use and engage in the U.S. market to try and maintain our leadership as well. I think from the Aussie presentation, there was a very interesting phrase that Ben used, which is, "It's all the one percents." That's about making sure that every element of the customer experience that from when they log in right through to placing a straight, a singles bet through to a Same Game Parlay through to whatever else they wanna do, is done in a way that makes it super easy for the customer. Just sticking the Same Game Parlay on the side of your app isn't the way to make that a seamless and great user experience.
There are many, many things that lead to product differentiation rather than just having a product or not having a product. Look, the final point I'd make, Clark Lampen, look, you know, which I think is important, sometimes people forget this, is that, you know, really the heart of our products is our, you know, pricing risk management capability, you know, sort of risk and trading stuff. You know, we spent some time on this call talking about the fact that sports results are going against us. You know, the most important thing is to get your probability and pricing as accurate as possible. You know, we have many years of experience of that with 650 people, you know, assessing and developing models and pricing and trading for us around the world.
That stands us in really good stead in the States, which gives us the best sort of depth of markets which customers love, but also when you get the pricing accurate on them, you effectively get the better margins in the end.
Look, I think that's the end of all of our questions. You know, thank you very much, everybody. We are very pleased with the extent to which we've been able to grow our player base over the course of this year and look forward to doing so next year. 2022 is gonna give us a number of new states, an opportunity to continue to grow the business, and we look forward to seeing what we can do with our fantastic challenger brands around the world.
Thank you.
Thank you, Peter, and thank you everyone. That does conclude your call for today. You may now disconnect. Thanks again for joining and enjoy the rest of the day.