The continuation of racing across Australia and the US has come as a welcome relief for Flutter Entertainment, as its retail estate faces a blow from the postponement of global sporting events.
Publishing a Q1 trading update for the three months ended 31 March 2020, Flutter reported group-wide year-on-year revenue growth of 16% in Q1, reported at £547 million for Q1 2020, despite the impact of sports disruption.
Meanwhile, its online division also saw a 20% increase in revenues as a result of “strong active customer growth” in the US and Australia.
Retail revenues saw a 13% growth for the period, while the group’s sportsbook revenues grew by 32%, largely driven by reduced FOBT limits, which ‘more than offset the 20% reduction in gaming revenue’.
The FTSE100 group distinguished between the period of ‘pre-sport disruption’, and the ‘period of lockdown’.
Since the suspension of Irish and UK racing on 16 March and 20 March respectively, Flutter revealed that group revenue had declined by 32% year-on-year, with its retail estate reporting no revenue as a result of the shutdown.
Peter Jackson, Chief Executive, commented: “The Group performed very well in the period prior to the disruption to sporting events in mid-March. We delivered strong customer growth across each of our brands and benefitted from favourable sports results across our sportsbooks.
“Following the widespread cancellation of sporting events, Group revenues have been more resilient than we initially expected, helped by the continuation of horse racing in Australia and the US. Gaming continues to perform well across the Group.”
Australia’s Sportsbet continued its ‘strong momentum’ during Q1, reporting revenue growth of 32% up to £109 million. This was driven by a ‘combination of excellent customer growth, favourable sports results and ongoing structural improvements in margin’.
Meanwhile, Flutter also praised its expansion efforts in the US as revenues grew by 72% during the period as a result of a ‘strong performance’ across sports and gaming. Flutter attributed this growth to ‘further expansion into additional states and continued excellent customer acquisition’.
US gaming revenue increased by 260%, driven by the group’s cross-sell strategies in both New Jersey and Pennsylvania. FanDuel’s combined online gaming market share in New Jersey and Pennsylvania reached 25% in February, while Flutter’s revenue across its TVG racing and Daily Fantasy Sports businesses grew 3% year-on-year.
Jackson continued: “During this unprecedented time, we are keenly aware of our heightened responsibility to ensure that we do all we can to promote responsible gambling. We have stepped up our own practices and are collaborating with our peers within the Betting and Gaming Council to continue to raise standards across the sector. We are also working hard to provide all the support we can to our employees and I would like to thank them for their ongoing commitment and support for each other during this difficult period.
“While the current disruption is truly exceptional, it underlines the importance of product and geographic diversification. As such, the strategic logic of our combination with The Stars Group remains compelling. Following approval of the deal yesterday by the Irish Competition and Consumer Protection Commission, we look forward to completing the transaction in Q2 upon receipt of outstanding shareholder and regulatory approvals.”