Flutter Entertainment is anticipating a secondary US listing to come to fruition during the first half of 2024, as the gambling conglomerate once again waxes lyrical of its US standing in a third quarter trading update.

This came as the company reported third quarter revenue of £2.03bn, up 13 per cent year-on-year from £1.89, driven by a gaming division that is “performing exceptionally well” in recording a 22 per cent uptick to £914m (2022: £748m). Adverse sports results brought a two per cent drag, as revenue closed at £1.12bn (2022: £1.14bn).

Chief Executive Peter Jackson praised Flutter’s achievement of “another strong quarter in Q3 and even in this seasonally quieter period”.

NYSE to become primary Flutter listing?

The listing issue, which has been much discussed throughout the year, has seen a draft registration statement be submitted to the Securities and Exchange Commission. This comes ahead of the New York Stock Exchange becoming the choice of a future trading venue of Flutter’s ordinary shares, which is said to have followed “a competitive tender process”.

To coincide with this future move, the decision has also been made to cancel its listing on Euronext Dublin, which Flutter noted is expected to take effect simultaneously with, or shortly prior to, implementation of its US manoeuvre.

The company’s premium listing on the London Stock Exchange, and membership of the FTSE 100, will not be affected, however, a primary US listing may be pursued in due course. This would be the subject of a shareholder consultation.

“We are making good progress towards our US listing which will bring the group significant benefits from accessing the world’s deepest and most liquid capital markets,” noted Jackson.

“Overall, the significant potential for US growth and ability to leverage scale benefits across our diversified portfolio outside of the US, underpins our confidence in our significant and sustainable long term earnings growth potential.”

Making great strides across the US

In the US, revenue increased 12 per cent to £668m (2022: £598m), where Flutter noted efficient acquisition, strong retention and enhanced customer value helped drive a 40 per cent market share in online sports betting, This, it was added, represents the “clear number one position”.

Elsewhere, the company’s online casino strategy is labelled as “delivering very encouraging results”, with a 23 per cent market share standing FanDuel as “the number two operator in the market”.

“We are particularly pleased by the great progress we are making in the US. We are the first online operator to achieve structural profitability, and the strong ramp in EBITDA during 2023 will continue into 2024 and beyond, as our profit margins expand materially,” Jackson stated.

“The NFL season is off to an excellent start with our product leadership driving average monthly player growth of 38 per cent to 2.6m in the quarter. I am excited about our plans heading into the sports rich months of November and December as we execute on our winning strategy which, combined with the FanDuel Advantage, keep us leading the industry.” 

International growth in live with targets

Outside of the US, revenue growth of six percentage points to £1.36bn (2022: £1.29bn), falls in line with a long-term growth framework of between five per cent and ten per cent.

The UK and Ireland recorded revenue growth of 11 per cent to £566m (2022: £509m), with online (+12 per cent) and retail (+9 per cent) each benefitting from the start of the Premier League season.

Declines across a challenging racing environment saw Australia track an 18 per cent fall to £262m (2022: £319m), with sportsbook stakes down nine per cent and more than offsetting “good retention of [an] enlarged player base”.

Flutter’s international division, swelled by the recent purchase of 51 per cent of MaxBet for €141m (£123m), saw revenue rise 16 per cent to £539m (2022: £436m). 

Sports revenue was seven per cent down due to the adverse impact of customer friendly sports results, while gaming pushed nine per cent ahead due to strong execution in India (+52 per cent) and Turkey (+192 per cent). Italy delivered a four per cent drop. 

Outlook and executive comments

For the full-year, Flutter is expected US revenue and adjusted EBITDA to be approximately £3.75bn ($4.7bn) and £140m ($180m), which comes “despite ongoing investment in new customer acquisition to drive long term growth”.

Outside of this region, AEBITDA is anticipated to reach £1.44bn, the lower end of previous guidance, with increased investment in the Flutter Edge and a weakness in the Australian market offset by the “underlying strength” of the group’s UK&I and international divisions.

Jackson concluded: “Outside of the US, our strategy ensures we can capitalise on the many growth opportunities which exist across our global markets. 

“Our diversified portfolio of leading brands are well positioned to adapt to challenges and opportunities in their respective markets. In Q3, our UK & Ireland brands continued to take share across online and retail channels through our winning product offering. 

“In addition, our consolidate and invest markets drove strong momentum within our international business. We were pleased to add MaxBet to the Flutter portfolio, in line with our strategy for acquiring ‘local hero’ brands in attractive markets. 

“While market conditions in Australian racing remain challenging, as the clear market leader with a player base 1.8 times that in 2019, we are confident that Sportsbet is the best positioned brand in the market.”