New solutions needed for frictionless checks, warns Flutter chief

More customers are set to be subject to checks as a result of the government's gambling white paper and new technological solutions are required to make them frictionless, according to the chief executive of Flutter Entertainment.

Peter Jackson's comments came as the betting industry giant, parent company of Sky Bet, Paddy Power and Betfair, reported a strong performance in the first quarter of the year in a trading update on Wednesday.

The government's long-awaited proposals for gambling reform were published last week and included plans for "background checks" on customers set at a £125 net loss within a month or £500 within a year, while enhanced checks would kick in at proposed thresholds of a £1,000 net loss within 24 hours or £2,000 within 90 days.

Ministers insisted the financial risk checks should be "frictionless" with requests for documents such as payslips and bank statements used only as a last resort.

Jackson said Flutter welcomed the white paper and that the company had implemented many of the proposals which had already removed £150m in annual revenue from its UK business, while there could be a further £50m-£100m incremental impact from the white paper.

However, Jackson said that it would be "very difficult" to implement the financial risk checks now.

He added: "We are not clear exactly what they are going to be and also for the government to introduce these frictionless checks will require some additional technology and technological solutions to be put in place and they are not there yet."

Jackson said the government's proposals would result in a larger proportion of Flutter's customer base being subject to frictionless checks.

Flutter Entertainment chief executive Peter Jackson

He added: "I think there will be a step up in the volume of customers we engage with, but actually there will be new solutions which will be available to us which will genuinely be frictionless so there should be no impact on customers as a result of that."

Flutter reported on Wednesday that in the first quarter a 30 per cent increase in average monthly players to 12.3m helped drive revenue growth of 46 per cent to £2.41 billion. It recorded revenues of £608 million across online and retail in the UK and Ireland, up 17 per cent year-on-year.

In the US, revenue of £908m amounted to an increase of 92 per cent on the same period last year, with Jackson stating Flutter's FanDuel business had been established as the "clear market leader" for the sports betting market. The positive bulletin comes after the group received "overwhelming support" for a second listing in the US last week.

However, Flutter reported performance to be down in Australia with revenue of £289m amounting to a drop of four per cent on the first quarter of 2022.

Jackson said: "The group delivered a very strong first quarter performance with pro forma revenue growth of 29 per cent achieved through continued execution against the group's strategic priorities.

"In the US, the combination of the FanDuel advantage and the Flutter edge drove further market share gains. We added over 1.5m customers in the quarter and we remain the clear market leader. Our US sports betting handle of $10.9bn represented almost 60 per cent of the group's total sportsbook stakes.

"In the UK, the publication of the white paper has vindicated the proactive actions we have taken to further embed safer gambling across our organisation through our Play Well strategy. The changes will bring consistency to safer gambling protections for customers and make responsible play a priority across all operators, which we strongly support."

David Brohan, gaming and leisure analyst at stockbrokers Goodbody, described the announcement as "another very strong update from Flutter, with first quarter numbers beating our expectations across the board".

However, Flutter shares were down 0.67 per cent at 15,685p on Wednesday morning.

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