Earnings at Paddy Power owner rise 23% as it eyes bigger US pot

Total US betting and gambling market to exceed €16bn by 2025

The world's largest online betting group reported full-year 2020 earnings before interest, tax, depreciation and amortisation of €1.62bn. Picture Denis Minihane.

Full-year earnings at Paddy Power, Betfair and Poker Stars owner Flutter Entertainment rose by 23%, as it maintained its leading position in a booming US market that it said could grow to twice the size previously estimated.

The world's largest online betting group reported full-year 2020 earnings before interest, tax, depreciation and amortisation (EBITDA) of €1.62bn, ahead of the range it forecast in November.

That excluded an EBITDA loss of €197m in the United States, the next big growth market for sports betting, where it merged with the Stars Group Inc (TSG) last May and increased its holding in its US Fanduel brand in November.

However, Flutter said heavy investment there masked a strong underlying performance, with positive contributions from the states it was operating in before 2020. That helped it maintain a 40% share of the US sports betting market.

It also now expects the total US market up for grabs to exceed €16bn by 2025, around double its previous forecast, due to an increase in estimated sportsbook value and in the number of states it expects will legalise gambling.

"Nowhere has our growth been more evident than in the US, with customer economics that continue to exceed our expectations," Flutter Chief Executive Peter Jackson said in a statement.

While the Covid-19 pandemic all but halted sports events for two months from mid-March, popular fixtures such as soccer and horse racing have since mostly continued uninterrupted behind closed doors.

Annual revenue grew by 59% in Australia, the least affected market, compared with the previous year, 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, Flutter said, citing favourable sports results and further growth in player volumes.

Reuters