Australian Market Boosts Flutter Growth in Q3

Gambling companies tied to land-based establishments have experienced great financial woes in 2020 due to the coronavirus pandemic. Companies like Flutter, however, have thrived – for the most part – in a world more dependent upon online gambling options than ever before.

Flutter Entertainment posted its third quarter trading update in the past week. Its growth is substantial, boosted by a number of markets, including Australia.

Overall Solid Numbers in Q3

The Q3 trading update for Flutter took the company through September 30, 2020. The bottom line showed substantial year-on-year growth for nearly all verticals and sectors.

  • Sports revenue of $798 million, up 32% year-on-year from $606 million in 2019
  • Gaming revenue of $527 million, up 21% year-on-year from $436 million in 2019
  • Total revenue = $1.325 billion in Q3, up 27% from $1.042 billion in 2019

The company noted that part of the group online revenue growth of 33% pertained to the return of sports. During the initial months of the global pandemic, starting in mid-March, almost every professional sports league around the world stopped playing. That resulted in fewer betting opportunities. However, as leagues found ways to play, wagering resumed in Q3.

During that third quarter, the number of average daily customers grew 41% on a global level, averaging double-digit growth in all key regions.

According to CEO Peter Jackson, “Flutter’s performance in the third quarter exceeded our expectations in both sports and gaming. Our strong trading continued as we grew market share in key regions while retaining our commitment to safer gambling practices. During the quarter, we continued to expand our recreational customer base while bringing our businesses together. This included the successful migration of the BetEasy customer base onto the Sportsbet platform in Australia.”

Standout Australian Performance

Speaking of Australia, Flutter named that market as the standout performer for the quarter with revenue up 76% year-on-year. The company attributed some of that growth to an 86% increase of average daily customers.

Even more impressive, the growth overcame the 30-basis-point reduction in net revenue margin for the year to 10.7% due to tougher margin comparatives.

While the solid numbers came during the migration of BetEasy customers to Sportsbet in September, it happened before the Spring Carnival. That timing was key. And now, more than 90% of BetEasy’s customer revenue base has already engaged with Sportsbet to some degree.

Limited Online Poker Growth

For years prior to Flutter’s absorption of The Stars Group, the latter had deprioritized the online poker vertical as compared to online casino and sports betting options. Though PokerStars was the base upon which the entire company was built, other verticals raced to the fore in the online gambling world.

With that, PokerStars’ overall revenue in Q3 increased by only 5%.

  • PokerStars gaming grew 6% and sports 3%.
  • Average daily gaming customers increased 23%.
  • Little more than 33% of customers acquired or reactivated in the second quarter continued playing online poker or casino games in the third quarter.
  • Online poker itself declined 10%, close to pre-coronavirus rates.

Flutter’s long-term plan for PokerStars is to invest more in customer value and product. What this means for online poker players remains to be seen.

Holding Top Position in US Market

Flutter was able to keep its top position in the United States market with 46% of online sportsbook revenue and 29% of total online gaming. Forecasts even underestimated the growth of that market in Q3, as Flutter acquired more than 450,000 new customers for a total of more than 1.8 million active customers in the third quarter.

Predicting full-year 2020 global gaming revenue for the US market, Flutter expects the final number to exceed $1.1 billion with net gaming revenue of more than $850 million.

Overall, Flutter reported US gaming revenue up 299% in Q3 due to ever-increasing customer engagement. The number of average daily customers increased more than five times just during that single quarter. Sportsbook states grew 155%, and TVG racing increased revenue 54% and average daily customers by 112%.

UK and Ireland Grew, Too

Paddy Power and Sky Betting & Gaming both grew in the UK and Ireland market. The former jumped 32%, followed by Sky at 26% year-on-year.

Paddy Power Betfair focused more on its online gaming sector in Q3, as those games grew 31% while sports wagering increased only 5%. Overall online revenue did grow 14% due to strategic investments on sports betting after the coronavirus-mandated shutdowns. Average daily customers pushed Paddy Power Betfair’s online growth with a 51% in daily customers.

Sky Betting & Gaming saw its sports revenue grow by 26% though sportsbook stakes increased by only 6%. Sky Vegas, however, continued its top ranking in the UK market with 44% growth in average daily customers.

Looking Forward

Flutter now expects the 2020 EBITDA outside of the United States to be £1,275,000 to £1,350,000, resulting from higher customer volumes across all verticals and sectors. As for the US, Flutter expects an EBITDA loss of £160 million to £180 million due to an increased investment in customer acquisition.

CEO Jackson noted that he sees Flutter now as a “truly global business with significant scale.” He anticipates further growth despite any hurdles due to the ongoing coronavirus pandemic.

 

 

Rose Varrelli

Rose Varrelli has always been passionate about online casinos, as she's been a player at a variety of places for years. Rose turned her personal knowledge and insight into a writing career. She aims to provide readers with the most up to date, informative news in the world of online casinos!

News

The Star Casino Gold Coast Celebrates 35 Years of Business

The Star Casino Gold Coast Celebrates 35 Years of Business

Crown Resorts Battles Gambling Regulator | Blackstone Possible Buyer

Crown Resorts Battles Gambling Regulator | Blackstone Possible Buyer

Australians Spend Big on Lotteries in 2020 | Keno & Powerball

Australians Spend Big on Lotteries in 2020 | Keno & Powerball