Paddy Power-owner Flutter shares surge by €2.5bn as investors bet on US success

Shares in Flutter - the owner of Paddy Power, SkyBet, and Betfair in Ireland and Britain - surged by almost 10% as it hailed the success of its US operations as more American states prepare to legislate and open up for online gambling.

Its FanDuel company in the US, which is soaking up a huge amount of investment in technology as part of Flutter's expansion drive, will turn a profit as early as 2023, Flutter chief executive Peter Jackson said, as it aims to establish a commanding lead there over rivals. 

Investors were impressed. Flutter soared to gain around €2.5bn which valued the gambling giant at €29.4bn. 

Mr Jackson said Flutter was "in a race" in the US to benefit most as more states legislate and open up. 

After launching in Michigan and Virginia this year, the company is currently operating in 10 states, and expects to open up in Connecticut and Arizona in the coming months. It then expects seven further states to open when they legislate next year, including New York, Massachusetts, and Ohio.    

It plans to operate in 19 states over the next 18 months.                  

Mr Jackson said that despite hefty acquisition costs to attract new customers that wager amounts and other gains make the US attractive. Flutter's nearest rivals in the US are DraftKings and BetMGM.     

Revenue for the first six months at FanDuel climbed to £652m (€764m), contributing a significant share of total group revenues of over £3bn. Group earnings before interest, tax, depreciation and amortisation fell to £597m.  

Excluding an operating loss in the US, earnings were 2% lower year-on-year. 

It also said it had made progress in integrating its three brands in the UK and Ireland.  

Mr Jackson also said a 52% year-on-year increase in its Australian player base also suggested that its market leading Sportsbet unit there may have experienced a permanent step change in scale.

Flutter said it expected full-year adjusted earnings of between £1.27bn and £1.37bn, including a US loss of between £225m and £275m, down from £1.4bn in 2020.

"The customer economics we are seeing in the US bode very well for the future, with early FanDuel customers generating positive payback within the first 12 months of acquisition," Mr Jackson said.