Flutter Entertainment forecasts regulated TAM of $368bn by 2030

Flutter Entertainment has outlined its long-term growth plan with regulated total addressable market (TAM) worldwide expected to be $368bn (£275.6bn) by 2030.

Ahead of the Investor Day today, 25 September, FanDuel’s parent company also revealed a $5bn share repurchase programme, which is expected to start after the Q3 2024 earnings in November.

The news sent the New York-listed operator’s shares soaring almost 10% at one point, although the stock is up 8% on the day to $246 at the time of writing.

Pointing to group financial highlights, Flutter said it expects global gross gaming revenue (GGR) with forecast compound annual growth (CAGR) to stand at 8%.

Across both the US and rest of the world, 2027 guidance is expected to deliver revenue of approximately $21bn. That figure represents three-year CAGR of 14% and would see adjusted EBITDA in 2027 of over $5bn.

Adjusted EBITDA margin in 2027 will be 700 basis points, approximately 25%, according to the operator.

Flutter added that free cash flow would be approximately $2.5bn in three years, with a forecast of 36% CAGR.

Focusing on the US, Flutter highlighted that 2027 guidance excludes new state launches between now and 2027.

North American mature TAM is expected to be approximately $70bn, with the US forecast standing at around $63bn and Canada estimated at $7bn. The US figure is 1.5 times Flutter’s previous market estimation.

With Flutter’s expectation of “best-in-class pricing, generosity, and product to drive”, sportsbook GGR margin is estimated to be 16% in the long-term and 15% in 2027.

For US market leader FanDuel, its long-term net gaming revenue (NGR) margin is estimated to come in at 12%.

Existing state revenue CAGR stands to come in at 15% to 17%, or around $9.7bn, “at the midpoint”, while adjusted EBITDA is expected to be $2.4bn (also at the midpoint) with an adjusted EBITDA margin expansion of 13 percentage points to 25% by 2027.

Should those figures be attained, Flutter said it “would already be within our long-term 25-30% target range”.

The New York-listed operator also expects “significant” opportunities in states yet to be regulated, with the company looking at 80% sportsbook and 25% “igaming population coverage expectations”.

For the rest of the world, 2027 guidance includes the Snaitech and NSX Group acquisitions announced last month, which Flutter expects to close by Q2 2025.

This would see regulated TAM of approximately $298bn by 2030 and cost-efficiency programmes projected to create savings of about $300m in 2027.

Scale and diversification is expected to achieve long-term revenue CAGR of 5% to 10%, with revenue forecast of approximately $11.5bn at the midpoint, including the two acquisitions.

Altogether, sustainable revenue growth for the rest of the world is expected to deliver adjusted EBITDA margin expansion of one to two percentage points – approximately 26% in 2027 and $3bn at the midpoint.

Alongside the operator’s key financial projections, Flutter announced its board has authorized a share buyback program of up to $5bn with the “capacity to pursue organic growth, and value creative M&A, and shareholder returns”.

The programme is expected to be deployed over the next three to four years, launching in November this year.

Though Flutter points out both the timing and actual number of shares will depend on several factors including legal requirements as well as both economic and market conditions.

Flutter said: “The announced share repurchase program is expected to continue provided our leverage ratio is either within or below our target range, or is expected to reduce back into the target range in the near term.”

Commenting on Flutter’s future, CEO Peter Jackson said the firm has worldwide advantages that will allow for further growth over the coming years.

Jackson said: “I am very excited about Flutter’s strong trajectory and how well positioned we are to capitalize on a global regulated addressable market of nearly $370bn.

“With our unmatched scale, diversification, and our global differentiator, The Flutter Edge, we have clear sustainable global advantages that will continue to drive sustainable growth and power our financial model with operating leverage building over time.

“This will provide us with significant optionality for capital allocation, allowing us to be an ‘And’ business, with the capacity to invest for organic growth, and engage in value-creative M&A, and also return a significant amount of capital to shareholders.

“Our intention to deliver up to $5bn of share repurchases over the next three to four years reflects our confidence in Flutter’s future.”

In its Q2 figures released last month, Flutter reported a 20% year-on-year (YoY) jump in revenue, with adjusted EBITDA climbing 17% YOY and net income growing significantly by 364% YoY.