Flutter's US and Australia online business softens UK sports shutdown impact

Flutter Entertainment said its sports revenue has declined 46% in the four weeks since the suspension of UK and Irish racing as part of coronavirus lockdowns. This was less than the bookmaker expected thanks to the continuation of racing in Australia and the US, while total group revenue since March 16 were only down 32% thanks to strong gambling takings.

The company has been impacted by the cancellation of almost all sporting events, from Premier League and Champions League football to tennis and motor racing, with a decline of 65% for the main Paddy Power Betfair (PPB) online business since Irish horseracing was canceled on March 25, Proactive Investors reports.

In the four weeks from when the Irish lockdown began on March 16 to April 14, overall PPB online sales have fallen 32%, while Australia has only declined 7% as retail customers moved online to bet on racing behind closed doors. The PPB Retail division, which had been contributing 13% of overall revenues, has in that time provided no contribution whatsoever.

In the US a fall of 8% in the four weeks reflects a 46% decline in sports revenue offset by a 200% surge in online casino and poker gaming.

The group generated total revenue of £547 million (USD 681.2 M) for the first quarter as a whole, up 16% year-on-year, with sports revenue growing 30% before March 16 and gaming by 27%. It finished the quarter with a net debt position of £240 million (USD 298.8 M) and undrawn borrowing facilities and available cash of £460 million (USD 572.8 M). Flutter has said that it will endeavour not to rely on government coronavirus furlough schemes and will pay the salaries of all staff from its own financial resources.

"We delivered strong customer growth across each of our brands and benefitted from favourable sports results across our sportsbooks,” Flutter CEO Peter Jackson said in a statement. “Following the widespread cancellation of sporting events, group revenues have been more resilient than we initially expected.”

Jackson said the merger with The Stars Group, which has been approved by both the UK and Irish competition authorities, was expected to complete before the end of June.