The liberalisation of American sports gambling legislation helped boost revenues at Betfair owner Flutter Entertainment by around a seventh last year.
Higher betting taxes and new rules on in the UK partly caused pre-tax profits to fall by over a third to £136million though.
The Paddy Power owner, which is close to agreeing on a merger with Canadian bookmaker The Stars Group (TSG), saw total revenues grow from £1.87billion last year to £2.14billion in 2019, with online group revenue rising by 18 per cent.
Flutter Entertainment is the parent firm of Betfair, a well-known British bookmaker
Its FanDuel Group division in the US experienced a near doubling of revenues from £191million to £376million, while its Australian market also expanding strongly, with revenue jumping 11 per cent to £446million.
Growth in the US market advanced due to the increasing number of states legalising sports betting. Flutter managed to add 285,000 sports betting customers in 2019 and has a 44 per cent online share in states where it operates.
Flutter’s announcement comes the day after William Hill also published its financial results showing it achieved higher revenues in its US division as a result of the repeal of the Professional and Amateur Sports Protection Act in 2018.
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The law essentially proscribed sports gambling in all but a few American states for over a quarter of a century but was overturned by a US Supreme Court decision.
British and Irish betting companies have subsequently run very hard and fast into the roaring American sports gambling market.
FanDuel is now both the top online sportsbook and casino business in the country, despite only opening its sports betting operations a year-and-a-half ago.
FanDuel is now the both the top online sportsbook and casino business in the USA, despite only opening its sports betting operations a year-and-a-half ago
Despite the higher gambling receipts, the company said an increase in online betting tax in the UK from 15 per cent to 21 per cent, as well as gaming duty hikes in Ireland and Australia have cost them £73million.
Flutter blames a new £2 maximum stake on FOBTs for cutting its profits by £30million. FOBT machines, which have been nicknamed the crack cocaine of gambling, have been blamed for exacerbating problem gambling due to their highly addictive nature.
They have been highly profitable for bookmakers though. Consequently, the recent £2 limit has caused traditional bookmakers like Ladbrokes and William Hill to shut hundreds of their shops.
Losses at its US division meanwhile expanded to £60million from £25million the year before due to greater costs in marketing, product and technology, and operations.
FOBT machines, which have been nicknamed the ‘crack cocaine’ of betting, have been blamed for bankrupting thousands of punters due to their highly addictive nature
Chief executive Peter Jackson said that despite losses coming from the new gambling regulations, ‘we know that they are the right thing to do for our customers and for the sustainability of our business and the industry in the long-run.’
On the financial results, he stated: ‘2019 was a very significant year for Flutter, with further successful expansion in the United States, enhancement of responsible gambling initiatives within our business and the announcement in October of our proposed merger with The Stars Group.
‘I am immensely proud of the group’s performance given the complex regulatory environment.
‘The entrepreneurial culture of our business and the quality of our people are continuing to drive our global expansion while providing our teams with the opportunities they seek to develop their careers and gain new experiences.’
The company said trading in the new financial year had a ‘strong start’ with ‘good momentum’ across all of Flutter’s brands.
Flutter Entertainment’s share price has fallen 4.2 per cent today to 8,529p.