Responsible gambling key to our survival says owner of Paddy Power and Betfair

A proactive approach to responsible gambling is essential for bookmakers to continue thriving, according to the chief executive of gambling giant Flutter Entertainment – the umbrella brand for Paddy Power and Betfair.

The betting industry has been under considerable external pressure over its attitude towards problem gamblers and television advertising, alongside increased taxation and a reduction in the maximum stakes by the government for FOBTs to £2 from £100.

Peter Jackson was speaking as Flutter revealed profits before tax had tumbled 24 per cent during the first half of 2019 to £81 million, while Ebitda (earnings before interest, tax, depreciation and amortisation) was down ten per cent to £196m compared to the same time last year.

Increased taxation in Australia, a rise in betting duty in Ireland and the impact of FOBT stake reductions in the UK were behind the drop, alongside increased investment in the group's US operations.

A number of responsible gambling measures have been implemented by Flutter during the first half of 2019, including the expansion of safer gambling initiatives alongside four other leading firms to increase funding to gambling addiction treatment, a whistle-to-whistle ban on advertising on a number of sports and the enhanced use of technology to protect problem gamblers.

Paddy Power have also driven through a Save Our Shirts campaign with a number of EFL teams which has resulted in it removing sponsorship from the front of football shirts, partly in response to criticism about the explosion in betting advertising in the sport.

Jackson said: “It’s important to acknowledge the important changes we’ve made around responsible gambling. We’ve made these because they’re the right thing to do and we’re doing it all around the world.

“We’ve made the changes around whistle-to-whistle advertising because we wanted to do that – no one has forced us to do that. The top five operators decided that’s the right thing to do. We have to acknowledge that the industry needs to take steps to allow our businesses to remain sustainable.”

He added: “In racing we have a symbiotic relationship which necessitates the need for the industry to take a forward-thinking approach. The things we’re doing around advertising and the work we’re doing in our approach to responsible gambling and reducing the exposure of problem gamblers to betting are all important steps and are the right thing to do for the business.”

The approach to responsible gambling was impacting “higher value activity”, particularly on Betfair, Jackson said, although he emphasised it was the right move for the industry to take.

Tiger Roll (maroon): was a positive result for Flutter in the Grand NationalCredit: John Grossick (racingpost.com/photos)

The Grand National retained its place as the most popular betting race, while the victory of Al Boum Photo in the Cheltenham Gold Cup was a major result for Flutter.

Jackson said: “Despite there being a hot favourite [for the National] in Tiger Roll, him winning actually became a small positive for the group after some inspired moves by our traders; I’m still not sure how they managed to do that.

"The biggest racing results during the period came at Cheltenham when the unheralded Al Boum Photo won the Gold Cup.”

While earnings and profits sank, revenue soared 18 per cent primarily driven by the group’s US operation FanDuel, which reported a 148 per cent rise in revenue, and Sportingbet in Australia, where revenue was up 16 per cent.

Online grew eight per cent but retail dropped four per cent, although Flutter stated it was confident its estate would continue to grow as others in the sector faced a drop in profitability related to FOBTs.

Paddy Power: confident about the future of their shops despite a fall in revenue

Further expansion into America and promoting Betfair worldwide were put forward as key growth strategies by Jackson, who added: “We have had another productive six months. All divisions are performing strongly on an underlying basis and have responded well to the challenges faced.

“We are pleased with the progress we are making to build a more diversified and sustainable business . . . and we are confident we can make further good progress in [the next six months].”

In a note to investors, broker Peel Hunt said it remained "cautious" about Flutter's shares in light of regulatory risks, but added: "The business is making progress against considerable headwinds and we believe the shares are approaching fair value."

Markets responded positively to Flutter's half-year results with shares up 5.97 per cent to 6,600p at close of trading today.

If you are interested in this, you should read:

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Labour's Tom Watson calls for creation of gambling watchdog to protect consumers

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