Flutter Entertainment PLC (LON:FLTR) has nudged up its expectations for underlying profits outside the US for the current year as customer numbers rose in the third quarter, but marketing investment will result in a larger loss for the fledgling stateside market.
In the US, which remains a major gold-rush for the betting industry’s after gambling started to be legalised two years ago, the Betfair and Paddy Power owner claims Number 1 spot, with 46% of the online sports betting market via its FanDuel and FoxBet brands in the third quarter of 2020 and 29% share of US online overall.
The FTSE 100-listed group, which sealed this leading position with the merger with The Stars Group that completed in early May, said if there is no material disruption to major sporting calendars this year it now anticipates making US net revenue of over US$850mln (£650mln) as new customer volumes have been better than expected.
However, the higher customer acquisition investment needed to achieve these volumes means EBITDA losses in the US are now expected to be around £160-180mln, which is £20mln worse than the previous guidance of £140-160mln.
However, higher customer volumes outside the US are expected to boost earnings, as long as the coronavirus lockdowns in Ireland and England are not extended past their current six and four weeks, respectively, with the group now expecting full-year EBITDA to be around £1.275bn-£1.35bn, compared to previous guidance of £1.175bn-£1.325bn.
For the past quarter, Flutter generated £1.33bn of total revenue, up 27% on a pro forma basis on this time last year, with sports revenue up 32% and gaming up 21%.
In a statement, chief executive Peter Jackson said: “Flutter’s performance in the third quarter exceeded our expectations in both sports and gaming.”
He noted that the group is on track to generate more than US$1.1bn of gross gaming revenue in the US this year, “a major ‘first’ for an online operator”.