Paddy Power-owner Flutter shares plummet 12% as costs increase over gambling addiction measures

Earnings fell 14% in both Ireland and UK markets

Adjusted earnings at Paddy Power-owner Flutter, which also owns Betfair and FanDuel, fell to £1.24bn (€1.48bn) from a record of £1.4bn in 2020. 

Shares in Paddy Power-owner Flutter plummeted 12% as it spent big last year ahead of anticipated legislation over gambling addiction.  

Adjusted earnings at the gambling giant, which also owns Betfair and FanDuel, fell to £1.24bn (€1.48bn) from a record of £1.4bn in 2020. 

The shares closed 12% lower to value Flutter at over €19.7bn.                        

Across its Ireland and UK markets, revenue at its shops fell 13% in 2021, reflecting the impact of Covid closures and social distancing restrictions that were in place during the year. 

Earnings fell 14% in both markets to £134m. 

Revenue in the second half of the year in the UK and Ireland was around 85% of 2019 levels, with a stronger performance in the UK than in Ireland.

Flutter spent €111m on safer gambling measures across its operations last year. 

Costs also rose as it completed the acquisition of The Stars Group in the US. 

"In the UK and Ireland, we stepped up our safer gambling efforts and increased protections for our customers ahead of anticipated regulatory change," the company said.      

Average monthly customers for the company rose by 23%, bringing its customer base of over 7.6m people. 

Leading position in US

Flutter said it maintained its leading position in the rapidly expanding gambling market in the US where it has a 40% share. 

The company expects revenue to grow in 2022 across the group from the 2% year-on-year rise in the first seven weeks of the year. 

Flutter said that it had relatively small online operations in Russia and Ukraine.        

Flutter plans to progress later this year with its arbitration with the Murdoch family-owned Fox over the sale of an 18.6% stake in the US-based sports betting company FanDuel. 

Fox entered into arbitration as it was not happy with the price.

Flutter chief executive Peter Jackson said that the arbitration and the rumoured IPO of FanDuel were “separate issues”. 

The firm was not seeking to float FanDuel on the stock market at present but it was constantly evaluating the position, he said. 

“The markets are not particularly open for IPOs at the moment and it’s not something we actually need to do for the business,” said Mr Jackson.