US drives growth at gambling giant Flutter but British racing proves challenging

The United States continues to drive business at gambling industry giant Flutter Entertainment but closer to home British horseracing is proving a challenge due to the impact of small field sizes.

The parent company of Paddy Power, Betfair and Sky Bet revealed strong growth in a trading update for the third quarter of the year on Wednesday, with total revenue of £1.89 billion, up 31 per cent, thanks to the performance of its American arm FanDuel and the acquisition of Italian gaming operator Sisal.

The number of average monthly players (AMPs) was up 23 per cent over the same period.

Flutter Entertainment chief executive Peter Jackson

However, chief executive Peter Jackson told the Racing Post that the performance of British horseracing had been "a little bit soft".

He added: "We are all well aware of some of the impacts from some of the smaller field sizes which I think has impacted viewership on ITV.

"Midweek staking is a bit down. The marquee events are holding up well for us but it is a challenge for us in the UK business."

Sports betting revenue in the UK and Ireland was down 11 per cent, although in line with the previous year which benefited from football's European Championships.

The start of the football season was hit by a slower midsummer start and fixture cancellations around the period of national mourning, but Flutter said momentum had improved as the season has progressed.

Betting shop revenue was three per cent lower with reduced footfall due to the hot summer weather. In the UK revenue declined four per cent but was five per cent ahead of pre-Covid levels, while in Ireland revenue was in line with the previous year but remained 27 per cent lower than in 2019.

No summer football tournament this year was a factor in Flutter's online revenue falling by 11 per cent in the UK and IrelandCredit: Claudio Villa

Jackson said Flutter's US division was now its largest and had generated $700m (approximately £615m) in revenue, up 82 per cent, during the quarter, while it was also the number one online sportsbook in the US with a 42 per cent market share.

He added the performance was "driven by a strong customer acquisition across new and existing states, with an encouraging start to the NFL season where we are now averaging over one million players on a typical NFL Sunday".

Flutter said it had upgraded its revenue guidance for the US to $2.95bn-$3.2bn from $2.85bn-$3.1bn and Jackson added: "The ongoing momentum in the US . . . underpins our confidence in achieving profitability for 2023."

Jackson said the company had yet to see a "discernible impact" on business from the rising cost of living in the UK.

He added: "Obviously we are very thoughtful that we are moving into a period of colder weather and the inevitable impact of the increase in energy prices.

"I think it's worth remembering that our business is very recreationally focused so the typical spend is low, around £10 a week for a lot of our customers, so we are hopeful they will continue to spend with us."

Rivals have recently outlined the cost of measures such as affordability checks, but chief financial officer Jonathan Hill said that early action Flutter had taken in advance of the government's gambling review white paper meant there had been a "relatively low impact" this quarter compared to the same period in 2021.

He added: "We would love to see the white paper coming out to get that clarity and certainty for ourselves and for the sector."

David Brohan, gaming and leisure analyst for stockbrokers Goodbody, described the news as "a robust update" from Flutter, containing a number of positives.

However, the company's share price was down nearly 2.75 per cent at 11,465p at close of trading on Wednesday.

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