Flutter Profits Fall After U.S. Gamblers Hit Winning Streak
Flutter, the international sports betting operator, has announced a fall in revenue and profit after a streak of favorable outcomes for U.S. gamblers betting on American football.
People betting at a sports bar. Flutter reports revenue fall after NFL betting upsets.
LISTEN TO THIS ARTICLE:The New York-listed company, which owns brands such as FanDuel, Paddy Power, and Betfair, said on Wednesday that the current NFL season has been exceptionally “customer friendly”. It has seen the highest rate of winning favorites in nearly two decades, which makes it the most bettor-friendly period since the start of online sports betting.
GGR Drops by $438 Million
As a result, Flutter’s gross gaming revenue (GGR), the total amount bet minus winnings paid out, has been reduced by $438 million. This translates to an expected $390 million drop in revenue and a $260 million decrease in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the period from November 12 to December 31. For the full year, Flutter expects U.S. revenue to be $370 million below its previous midpoint forecast, bringing the total to $5.78 billion.
Despite challenges with US online casinos and sportsbooks, Flutter reported better performance in other regions, particularly in the English Premier League. The group raised its revenue and adjusted EBITDA estimates for the UK and Ireland by approximately 1% and 2%, respectively, driven by favorable sports results. The company plans to release its fourth-quarter earnings on March 4.
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Predictions for U.S. Market Growth
In September 2023, Flutter stated it aimed to more than double its core profit by 2027, with nearly half of that growth to come from the flourishing U.S. sports betting market. The company expects the U.S. market to reach $63 billion by 2030, a 50% increase from its earlier projections in 2022.
Flutter has kept a leading position in the U.S. market since it acquired a majority stake in FanDuel for $158 million in 2018, shortly after the federal sports betting ban was overturned. Two years later, the group expanded its stake in FanDuel to 95%, investing an additional $4.2 billion.
In May 2023, the Dublin-based group shifted its primary listing from London to New York to take advantage of deeper capital markets. Flutter has also been expanding its international presence through acquisitions. Last year, the company purchased NSX and Snai to its portfolio, boosting its operations in Brazil and Italy, which are both viewed as promising markets.
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