Flutter Entertainment plc had a stellar first half of 2023, posting a profit of $162.9 million. FanDuel, its U.S. legal sports betting brand, deserves much of the credit for the turnaround.
Flutter — the majority owner of FanDuel and the parent company of Paddy Power and Betfair — had an excellent start to the year. Overall, revenues grew 42% while Adjusted EBITDA popped 72%, over the same period last year. Flutter’s performance, however, wasn’t too much of a surprise, given its outstanding first-quarter results.
The most significant news was the roughly break-even performance of Flutter’s U.S. operations.
Heavy lifting
FanDuel accounted for 98% of Flutter’s 1H 2023 U.S. revenue. Peter Jackson, Flutter’s Chief Executive noted, “The first half of 2023 marks a pivotal moment for the Group, with our U.S. business now at a profitability inflection point, helping transform the earnings profile of the Group and significantly enhance our financial flexibility.”
Flutter’s U.S. sportsbook net revenue margin grew by 210 basis points. As a result, FanDuel generated $100.5 million Adjusted EBITDA, offsetting most of the losses from FOX Bet and PokerStars. Flutter, however, won’t have to contend with many more losses from FOX Bet. Flutter and the Fox Corporation recently agreed to shut down their joint venture by the end of August.
Meanwhile, FanDuel acquired over two million new players during the period. Much of the growth is due to its new operations in Ohio, Massachusetts, Kansas, and Maryland. During the second quarter, FanDuel had a 47% share of the U.S. online sports betting sites market.
Tax issues down under
Flutter’s non-U.S. results were also noteworthy. In the UK and Ireland, revenue grew by 13% and Adjusted EBITDA increased by 24%. Flutter was able to gain sports and gaming market share across the region, in both its online and retail channels.
Flutter’s International division grew revenues by 85% while boosting Adjusted EBITDA by 133%. International’s performance gain was mostly due to Flutter’s August 2022 acquisition of Sisal.
Australia was the only region that failed to grow during the first half. Sportsbet’s revenues were off 2%, while Adjusted EBITDA was down roughly 28%. Some Australian states recently increased their point of consumption (POC) tax. And that doesn’t include Victoria, which will be raising its POC tax from 10% to 15 in July 2024.
American listing coming soon
Flutter Entertainment is currently listed on the London Stock Exchange and the Irish Stock Exchange. Earlier this year, the company was considering listing on a U.S. stock exchange, but now that looks like a sure thing.
Flutter stated that a U.S. listing would occur sometime in the fourth quarter of 2023 or the first quarter of 2024. The timing should be just about perfect. Now that its U.S. business swings to profitability, it should get more interest from Wall Street.
