Flutter doubles US revenues as Q3 sees home unit return to growth

Flutter Entertainment Plc has upgraded its full-year 2022 US revenue guidance to stand at $2.95bn-$3.2bn (£2.45bn–£2.65bn) as its FanDuel continues to outperform corporate expectations.

Publishing its Q3 trading statement, Flutter achieved corporate revenues of £1.89bn up 31% on 2021 comparative results of £1.43bn – as the FTSE100 gambling group accounts for +9.5m active monthly players (AMPs) across its global brand portfolio.

Headline growth was attributed to a doubling in US revenues to $598m, which reflected FanDuel’s position as the “Number-1 online sportsbook with 42% of US market share”.

US trading sees FanDuel mark its dominance via a strong start to the NFL season, bolstering Flutter’s headline forecast that its US asset will achieve positive EBITDA during 2023.

Group CEO Peter Jackson commented: “Flutter delivered a strong Q3 performance with pro forma growth of 11% in both revenue and average monthly players. Our US division is now our largest and generated $700m in revenue, up 82%.

“We are seeing an increase in customer retention rates as our parlay products continue to grow in popularity, boosted by the start of the NBA season. The ongoing momentum in our US division has led to an upgrade to our outlook for the year, underpinning our confidence that we will be profitable for 2023.”

Flutter noted that excluding US results, the group maintains its commercial growth at “revenues of +6%, combined with  AMPs growth of +19%”.

In Europe, Flutter’s International unit completed its acquisition of Sisal, incorporating the new assets of the Italian SuperEnalotto lottery and MatchPoint betting brand.

An enlarged international unit registered a 56% increase in revenues to £466m (Q32021: £299m) as performance was refreshed by new Italian assets and the continued growth of the Junglee India brand.

Q3 trading saw Flutter’s UK-&-Ireland division return to online growth, as home brands registered a 4% increase in revenues to £509m (Q32021: £491m), despite being matched against tough like-for-like comparatives for the group’s UK sportsbook brands.

Improved results saw UK-&-Ireland holdings register a 13% increase in AMPs to 3.4m, helping online gambling revenues increase by 10%.

Period trading saw the firm’s UK-&-Ireland retail unit register a 2% drop in revenues to £66m (Q3202: £68m) – as Paddy Power betting shops customer foot-fold lowered during a record hot summer.

A final divisional breakdown was provided for SportsBet Australia, whose Q3 revenues stood at £319m, reflecting a YoY 14% decline on 2021’s results of £370m. The SportsBet Australia unit was unable to match peak COVID-19 comparatives registered during 2021.

Excluding US results, Flutter maintains confidence that it will achieve its EBITDA target of £1.29bn-£1.39bn “despite continued Irish Retail weakness and UK fixture cancellations.”

Jackson concluded: “Outside of the US, we welcomed Sisal, Italy’s leading gaming operator, to our International division during the quarter and look forward to working with the team to grow the business in Italy and in other International markets.”

“We were delighted with the successful outcome of our arbitration process with FOX regarding the price of their option to acquire 18.6% of FanDuel. This vindicates our position on the matter, with FanDuel valued at $20bn based on its fair market value at 3 December 2020 and provides important clarity on the significant cost required to buy into the number one US gaming business.

“As we look ahead, our product and geographic diversification, as well as our recreational customer base, position us well for future growth.”