Paddy Power Betfair online revenues down 1% as US business beats expectations
Flutter raises US guidance while core Paddy Power Betfair online business hurt by RG measures and market exits
Flutter Entertainment has reported a 1% decline in Q3 online revenues from Paddy Power Betfair, with the division affected by responsible gambling measures, international market switch offs and challenging World Cup comparatives.
Online revenues were £247m, with sports revenues hardest hit, dropping 6% to £163m.
Flutter said when adjusting for the World Cup and market exits, sports growth was 5% year-on-year.
Within the vertical, exchange and B2B revenues were down 9%, or 1% adjusted.
Sportsbook revenues were down 5% (up 7% adjusted) with net revenue margin “broadly in line with expectations” at 8.2%.
That margin figure marked a “structural increase” of 60 bps year-on-year, with the improvement driven by country-specific pricing, uptake of same game multis and a move to attract more recreational customers.
Gaming revenue was up 11% year-on-year to £84m, albeit £2m lower than Q2.
Flutter said the sequential dip reflected the impact of RG measures on high-value customers, with daily actives up 9% YoY.
Total group revenues grew 9% in Q3 with sports revenue growth of 10% and gaming growth of 7% boosted by the Adjarabet acquisition, which added 4% to the growth figures.
Group CEO Peter Jackson said: “Within PPB, both the Paddy Power and Betfair brands continued to make good progress in building more recreational customer bases through enhanced responsible gambling measures.
“While revenues in the quarter were impacted by this ongoing work, we remain confident that the changes being made will improve the sustainability of future growth and lead to a more diversified customer base for both brands.
Peter Jackson
Elsewhere, Australian revenues grew 19% to £119m, while the US grew 67% to £91m.
The group upgraded its US outlook from an EBITDA loss of £55m to a loss of £40-45m.
The operator said the upgrade was driven by better-than-expected revenue growth in both sports betting and online casino.
Jackson added: “In the US, FanDuel has now launched online sports betting in Pennsylvania, West Virginia and Indiana and we have been very encouraged by progress to date.
“Published market share data in Pennsylvania shows that FanDuel quickly became the market leader with around 50% share while we remain the clear number one operator in New Jersey also.”
The group’s share price was almost unmoved in early trading.