DUBLIN (Reuters) - Paddy Power, Betfair and Poker Stars owner Flutter Entertainment posted a 23% rise in like-for-like earnings for 2020 as it maintained its leading position in a booming U.S. market that it said could grow to twice the size previously estimated.
The United States is seen as the next big growth market after a ban on sports betting was lifted in 2018. Flutter, which maintained its 40% share of the market there, expects more than 14 billion pounds worth of business to be up for grabs by 2025 as more states than previously anticipated open up.
The world’s largest online betting group on Tuesday said its revenues in the U.S. exceeded those of its two nearest competitors combined, including biggest rival Draftkings Inc.
Highlighting the pace of growth, more new customers bet with Flutter’s U.S. Fanduel brand during last month’s Super Bowl week than in the whole of 2019.
“The profitability we’re now seeing from early customer cohorts is reinforcing our positive long-term view,” Flutter Chief Executive Peter Jackson told a news conference.
Flutter reported full-year 2020 earnings before interest, tax, depreciation and amortisation (EBITDA) of 1.4 billion pounds ($1.9 billion), ahead of the 1.275 billion to 1.350 billion range it forecast in November.
That excluded an investment-heavy EBITDA loss of 170 million pounds in the U.S., where it increased its holding in Fanduel to 95% at the end of last year.
The group’s shares were 0.2% higher at 166 euros at 0905 GMT.
While the COVID-19 pandemic all but halted sports events for two months from mid-March last year, popular fixtures have since resumed behind closed doors.
Annual revenue grew by 59% in Australia, by 32% in the recently acquired SkyBet brand and by 8% in the mainly Britain and Ireland-based Paddy Power and Betfair online division. Group revenue was up 36% year-on-year in the first 7 weeks of 2021.
While the closure of Flutter’s smaller high street operation in the UK and Ireland during COVID-19 lockdowns is costing 9 million pounds in EBITDA a month, it said retail customers’ shift online was “playing to our strengths”.
“I don’t believe that retail is dead,” Jackson said, but added that he suspected there would be less shops, across all sectors, in the future.
($1 = 0.7206 pounds)
Reporting by Padraic Halpin; Editing by Kirsten Donovan
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