Paddy Power owner Flutter reports soaring US growth

Chief executive Peter Jackson said he expects the giant’s retail outlets to survive the pandemic hit (PA)

2 March 2021

Flutter said it saw an "unparalleled year in 2020" as the SkyBet and Paddy Power owner reported revenues boosted by online betting in lockdowns.

The FTSE-100 company, which is based in Dublin, said it saw revenues up 28% to £5.3 billion on a pro forma basis for the year ended December 31, with 19% customer growth across the group in the period.

The firm said its pre-tax profits fall from £136 million to just £1 million in part due to costs associated with its £9.3 billion acquisition of Canadian gambling firm, Stars Group, in May.

Flutter said it held its position as top US online operator, with usage of its FanDuel and FOX Bet brands spreading across the country.

The sector is seeing a boom in the US following a 2018 Supreme Court ruling allowing states to decide on legalising sports bets. The industry’s London-listed firms - including Ladbrokes owner Entain and Teddy Sagi’s Playtech - are all focusing on US growth. Flutter said that it expects the total addressable market for its US offerings to exceed $20 billion by 2025 - double that expected this time last year - as states make regulation changes at speed.

Chief executive Peter Jackson said on Tuesday that he thinks the switch to online gaming habits will "stick".

He said: “2020 was an historic year for the group... Nowhere has our growth been more evident than in the US where we have consolidated our #1 position in this crucial market, with customer economics that continue to exceed our expectations, finishing the year as the first US online operator to reach over $1.1bn in gross gaming revenue.

"While the global outlook remains uncertain, our momentum remains strong and we look forward to the future with confidence.”

Jackson said the company welcomes the Government's review of gambling laws. The review of the 2005 Gambling Act has been billed as a move to bring an analogue act up to speed with the digital age, as campaigners call for tougher regulations as online gambling habits evolve.

The chief executive said Flutter is seeing a "real sea change" already - with 40% of UK SkyBet customers operating a limit on their account in 2020.

Hargreaves Lansdown analyst, Susannah Streeter, said: "Merger with The Stars Group and the increased ownership of FanDuel in the US has given Flutter a much bigger footprint to draw earnings from, which partly accounts for the doubling of revenues in 2020."

The analyst noted that "Flutter’s strategy of widening its geographical portfolio should help insulate business if the more radical proposals under consideration [in the review] become law".

Shares were down 2% in early trading.

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