Investors in Flutter Entertainment may have been counting their losses after the gambling group was forced to cut its earnings forecast, but punters went on a winning streak last month thanks to knockout blows from Tyson Fury and Europe’s top football clubs.
Shares in the FTSE 100 group fell by £10.80, or 7.7 per cent, to £129.55 after it blamed last month’s run of sporting results for a £60 million hit on its UK and Ireland earnings, while there was a £10 million impact from temporarily exiting the Netherlands.
As a result of the weak start to the fourth quarter, it said that it was now expecting adjusted full-year earnings of between £1.24 billion and £1.28 billion, down from previous guidance of between £1.27 billion and £1.37 billion.
In the United States, where its FanDuel business is the biggest sports betting operator with a 42 per cent market share, its net revenue guidance was unchanged, but it said that its underlying losses could be worse than expected at between £250 million and £275 million.
Flutter was created by the merger in 2016 of Betfair and Paddy Power. Its acquisition in May last year of Stars Group, which is listed in Toronto, brought brands including PokerStars and Sky Bet. Although most of Flutter’s revenues are generated online, it has 620 betting shops in Britain and Ireland, which were closed for much of the pandemic.
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Flutter’s warning about its Dutch losses comes after a similar announcement from 888 Holdings, which last month predicted that its withdrawal would cost it $10 million. Betting companies are temporarily pulling out to apply for a formal licence to offer online gambling.
Despite the setbacks, Peter Jackson, 46, Flutter’s chief executive, said that the third-quarter performance had been a strong one, with the number of average monthly players up by 13 per cent to 7.3 million in the three months to the end of September. Revenues increased 12 per cent year-on-year to £1.44 billion, an increase of 38 per cent over the third quarter of 2019.
Jackson said that the 5 per cent fall in UK revenues reflected last year’s busier-than-normal sporting calendar as the easing of Covid-19 restrictions enabled a number of top fixtures, particularly in football, to be concluded. Tighter policies on safer gambling also took their toll. Jackson said that the worst results included Fury’s world heavyweight boxing championship knockout victory over Deontay Wilder and a week-long run in football’s Uefa Champions League, when 15 out of 16 favourites won.
Liverpool’s recent 5-0 win over Manchester United also hurt. “That result almost cost the manager his job but, it also cost us a lot of money,” Jackson said.
In America, he said that FanDuel had withstood “a step-up in competitive intensity” at the start of the NFL season, and added: “The customer response has been very encouraging, with FanDuel now regularly experiencing staking levels on Sundays that match its 2021 Super Bowl performance. Early engagement on NBA since the recent start of season has also been strong.”
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Asked whether he was relieved that DraftKings had pulled out of its £16.4 billion takeover bid for Entain, the Ladbrokes and BetMGM operator, which would have created a powerful US rival, he said: “It’s always flattering when a competitor tries to emulate your strategy.”
He said that FanDuel was gearing up for the opening up next year of another seven states to sports betting, including New York, Massachusetts and Ohio.
Analysts said the underlying picture, excluding the impact of punter-friendly sporting results, was positive.
Athletic rumours ‘not true’
The chief executive of Flutter Entertainment has dismissed speculation that the group’s FanDuel business is in the running to acquire The Athletic, the online sports news service, for a purported $750 million (Dominic Walsh writes).
Peter Jackson denied a report in The Information, a technology news provider, that FanDuel was among companies that had submitted bids, insisting that neither he, FanDuel nor Flutter wanted to buy it. He attributed the reports to “bankers trying to drum up interest in something we have absolutely no interest in”. DraftKings, which last week pulled out of a £16.4 billion bid for Entain, was also said to be interested in The Athletic.
