Flutter Entertainment encompasses some of the most recognisable brand names in the betting sphere in Europe, but that position hasn’t always meant steady growth. As the company has been expanding a number of its brands into the US and other international markets, things have been off to an understandably rocky start—no one expected the growth or profitability in the new venture to be immediate. This is mainly due to competition due to other new betting brands in both Ireland and further afield. But it’s clear now that the gambit is paying off, and this success is reflected in all the figures. Firstly, overall cash profits are up by a huge 75% to £765 million.
Shareholders approved a plan earlier this year to ultimately move more and more of the company’s operations stateside, a plan which should be completed by the end of the year. The possibility that the company’s main listing will eventually be based in the U.S. is also on the cards. Monthly player and customer numbers are up across the board, with player figures increased by almost 30% year on year. FanDuel, an U.S. sportsbook and fantasy betting company merged with Flutter, raked in almost half of the entire sportsbook betting share in the U.S. this year.
International expansion has been a big part of Flutter’s strategy in recent years. Overall player figures have increased steadily over all markets—the US market has been the biggest factor in this growth, but the purchase of Italian gambling giant Sisal has also proved a lucrative investment. This acquisition was finalised in August of 2022, and is clearly paying off now.
All of this success has also been reflected in the share prices, boosting confidence in the brand even further. The trading volume and share price have remained steady though somewhat below their 52 week high and 50-day average respectively. Overall, international profits have been an enormous help to Flutter, with the purchase of Sisal also driving international revenue up by as much as 85%. Domestic profits in the UK and Ireland have also risen.
With that said, the group has taken on considerable debt in the purchase of Sisal, with annual debt now having risen to £1.6 billion. The continued success of the US market will be really important to the reduction of this debt, and if things continue the way they are then the debt should be entirely manageable. Flutter’s brands already dominate in the U.S and other international markets making the debt a minor concern. Tax troubles in the Australian market, as well as lingering pandemic issues, have seen a minor fall in overall revenue of around 2%. There are, then, rough spots to be smoothed out, but ultimately Flutter’s international expansion looks to be its most profitable enterprise in years.
September of 2023 also saw Flutter acquiring a 51% stake in Serbian-headquartered MaxBet for €141 million. The company’s next moves, then, are clearly focused on the international market, and though the various purchases and acquisitions might incur some debt to begin with, plainly this strategy has a lot of potential for the group. Flutter Entertainment, and its constituent parts, have been leading the way in the European gambling market for well over a decade now, and so the natural next move is to conquer the rest of the global market.
Flutter Entertainment: the history
What’s clear about Flutter from this news is that they have never shied away from potentially risky mergers and acquisitions, and that is how the group as we know it today got started. Back in 2015, industry rivals Paddy Power and Betfair agreed the terms for a merger which was finalised in February of 2016. Paddy Power itself had been founded in 1988 by a merger of various Irish bookmakers, and the merger that would eventually create Flutter Entertainment was seen as Paddy Power acquiring Betfair. Initially, the new entity was known as Paddy Power Betfair, and remains based in Dublin today.
Even as early as 2011, Paddy Power was the biggest of all European bookmakers, based on its share value. Their success was nonetheless primarily in the Irish and UK markets, where the group had the greatest retail and online presence of any bookmaker. Betfair didn’t have quite the reach of Paddy Power, but it is for this very reason, at least in part, that the merger seemed beneficial to both parties. They were another leading player in the industry and rather than compete with one another, both companies thought it in their best interest to cooperate. Plainly, as we’ve seen from not only this recent news but virtually every year of Flutter Entertainment’s performance since, the merger was incredibly lucrative for everyone involved. Not only for the shareholders, but for the bettors and punters, too, who have seen increased markets and overall performance from the betting operator in recent years.
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