Flutter boosts US revenue guidance as gambling giant tells investors the division will swing to profit next year
- Paddy Power and Betfair owner said third-quarter revenues rose to £1.9billion
- The US division is expected to post a profit for the first time next year
Flutter Entertainment has raised its full-year revenue guidance for its US business after a strong performance in the third quarter.
The Paddy Power and Betfair told investors on Wednesday its third-quarter revenues rose 22 per cent year-on-year on a constant currency basis to £1.89billion, helped by a recent Italian acquisition and US growth of 82 per cent.
It now expects full-year revenue in the US division to be between $2.95billion and $3.2billion, up from previous guidance of between $2.85billion and $3.1billion.
Flutter has seen little slowdown in its US division this year despite the cost of living crisis
Flutter shares are down 0.76 per cent to 11,685 in trading this morning, parring 2022 gains to 1.2 per cent.
The US division, where FanDuel remains the number one operator, is expected to post a profit for the first time next year. It still expects a core earnings loss of between $300million and $360million in the US this year.
Full-year group EBITDA, excluding the US arm, is expected to remain within previous guidance of £1.29billion to £1.39billion, despite continued Irish retail store weakness and some UK fixture cancellations.
Chief executive Peter Jackson said: ‘We are really pleased with our performance in our US division since the start of the NFL in September… In addition, we are seeing an increase in customer retention rates as our parlay products continue to grow in popularity, boosted by the start of the NBA season.
‘The ongoing momentum in our US division has led to an upgrade to our outlook for the year, underpinning our confidence that we will be profitable for 2023.’
Earlier this week Flutter claimed victory in a long-running legal battle with Rupert Murdoch’s media group Fox, which had plans to take a stake in FanDuel.
The court ruled that FanDuel was worth £19.2billion meaning Fox would have to pay £3.6billion if it decides to exercise its option to take an 18.6 per cent stake in FanDuel.
Jackson said: ‘We were delighted with the successful outcome of our arbitration process with FOX regarding the price of their option to acquire 18.6% of FanDuel.
‘This vindicates our position on the matter, with FanDuel valued at $20bn based on its fair market value at 3 December 2020 and provides important clarity on the significant cost required to buy into the number one US gaming business.’