EGR Power 50 2019: Flutter Entertainment (04)
04. Flutter Entertainment (04)
FINANCIALS: Total group revenues grew 9% in Q3 to £533m, with sports revenue growth of 10% and gaming growth of 7%
STRATEGY & IMPACT: Peter Jackson is now a leading voice in the responsible gambling debate while Flutter has made it a point to target “podium positions” in regulated markets
GEOGRAPHIC REACH: Company has two of the largest brands in the UK, a market-leading presence in Australia and a dominant position in the US
INFLUENCE & LEADERSHIP: The Betfair Exchange is the go-to place for anyone looking for a true price, while Paddy Power is still the standard bearer for guerrilla marketing
The biggest story for Flutter in 2019 was undoubtably its acquisition of The Stars Group, which could propel the firm to the top of this list in 2020, but at the time of writing that combination is still in the hands of regulators and competition authorities. Given the growing number of hedge funds lining up short positions against the firm since the deal was announced, it’s by no means a gimme.
In the meantime, however, no firm has benefi ted more from the regulation of sports betting in the US than Flutter and its FanDuel brand. That database of DFS customers has been vital, but the ability to ship in online gambling operations expertise from Europe and Australia has propelled FanDuel to new heights, with the largest market share in New Jersey (around 18%), and 50% of the newly launched Pennsylvania market. Management has warned those numbers will only fall as the market gets more competitive but it’s already an enviable position.
Australia is also flying via the company’s market-leading Sportsbet brand, but the core European business isn’t quite enjoying the same momentum with online revenues from Paddy Power Betfair down 1% in Q3 due to responsible gambling measures, international market switch-off sand challenging World Cup comparatives.
Like much of the industry, the focus has been on switching to a more recreational customer base, with chief executive Peter Jackson increasingly a spokesperson for the industry’s efforts around safer gambling. Elsewhere, the Betfair Exchange continues to stumble along, with fl at or negative growth, although the introduction of a new Rewards scheme that lets customers calibrate their commission rates could yet prove to be the spark the product needs. Next year will all be about the integration with Stars, providing approval is received, and the aim is to avoid the kind of slowdown that afflicted Paddy Power Betfair when it first merged.
Jackson said the group will take a more “cautious” API-based approach towards technology integration, that will reportedly allow the new combined group to maintain both business momentum and the individual identities associated with the brands. It’s yet another risk for the mega-merger but the payoff s could be huge.