Flutter Entertainment has stated that US casino operations are going from “strength to strength” ahead of the group’s expected listing on the New York Stock Exchange by the end of January.
As for outside the US, Chief Executive Peter Jackson noted that the group achieved “strong momentum” in the UK and Ireland during the fourth quarter, as operations traded “in line with expectations”, but revenue declines were seen in Australia.
Flutter US operations gaining strength
Publishing a trading update, Flutter declared a total revenue for Q4 of £2.7bn, up 11 per cent year-over-year and 15 per cent YoY constant currency (Q4 2022: £2.4bn) with average monthly players rising by 12 per cent YoY as well to 13.6 million (Q4 2022: 12.1 million).
Per segment, sports betting revenue improved by eight per cent on the previous year to £1.7bn (Q4 2022: £1.5bn). Gaming revenue rose as well by 15 per cent YoY to £1bn (Q4 2022: £887m).
Excluding US operations, group revenue in Q4 rose by five per cent YoY (eight per cent YoY CC) to £1.53bn (Q4 2022: £1.46bn) with sports betting revenue increasing by six per cent YoY CC and gaming revenue rising by 11 per cent YoY CC.
Per region, US operations – FanDuel, TVG and PokerStars – continue to be the main source of revenue for Flutter, with £1.1bn generated in Q4, up 19 per cent YoY (26 per cent YoY CC) with gains in gaming partially offset by sportsbook net revenue YoY decline. AMPs for the operations also improved by 33 per cent YoY.
FanDuel operations achieved a 21 per cent YoY CC increase in revenue and a 53 per cent rise in sportsbook stakes, earning 43 per cent Q4 gross revenue market share (51 per cent net revenue share) which the group attributed to “pricing and risk management”.
FanDuel Casino performed well too, with revenue rising by 49 per cent YoY CC with continued market share gains to 26 per cent in Q4, up five points YoY.
“In the US, FanDuel consolidated its sports leadership position during the peak quarter for sporting activity, while FanDuel Casino went from strength to strength.”
Flutter Chief Executive Peter Jackson
As previously mentioned, US growth in Q4 was partially offset by a sportsbook net revenue margin decline YoY of 150 basis points to seven per cent.
Flutter noted that this decline was due to a 220bps expansion in sportsbook expected gross revenue margin YoY to 13.5 per cent, being offset by an “adverse sports results swing” YoY of 320bps due to “very customer friendly sports results in the quarter” (Q4 2023: -240bps adverse, Q4 2022: +80bps positive). There was also an increase of 50bps in promotional spend YoY to 4.2 per cent, in line with year-to-date spend levels.
Customer-friendly sports results impacted Q4 gross revenue by $343m (£270.5m), but this was “primarily mitigated by expected gross revenue margin being better than anticipated”.
US net revenue for Q4 stood at £1.1bn ($1.4bn), which was £147m ($225m) lower than the previous guidance stated in Q3, with an approximate 35 per cent flow through to adjusted EBITDA.
Jackson commented: “The group traded well in Q4 underpinned by our leading local brands supported by global Flutter Edge advantages. In the US, FanDuel consolidated its sports leadership position during the peak quarter for sporting activity, while FanDuel Casino went from strength to strength.
“While sports results were very customer friendly, particularly on the NFL in November, the underlying momentum in the business remains very strong heading into 2024.”
Revenue declines in Australia
Outside the US, UK&I operations – Sky Betting and Gaming, Paddy Power, Betfair and Tombola – saw their revenue improve by 19 per cent YoY (19 per cent YoY CC) to £647m (Q4 2022: £543m) with sports betting revenue rising by 18 per cent and gaming revenue improving by 21 per cent.
Flutter stated that market share gains were achieved through product improvements, as online revenue rose by 21 per cent YoY to £572m (Q4 2022: £472m), while retail revenue rose by six per cent to £75m (Q4 2022: £71m).
Australia’s revenue – Sportsbet – has taken a hit, falling by nine per cent YoY (two per cent YoY CC) to £304m (Q4 2022: £332m).
International operations – Sisal, PokerStars, Adjarabet, Betfair and Junglee – stayed consistent with the previous year (four per cent YoY CC) to £582m (Q4 2022: £583m).
“Outside of the US, the quarter traded in line with expectations, with continued strong momentum in the UK&I supported by recent product enhancements and International growth driven by our ‘Consolidate and Invest’ markets,” noted Jackson.
FY2023 & looking ahead
For the fiscal year ending December 31, 2023, Flutter reported a total revenue of £9.5bn (2022: £7.7bn), up 24 per cent YoY (25 per cent YoY CC) with AMPs increasing by 20 per cent to 12.3 million (2022: 10.2 million).
Per segment, sports betting revenue rose by 21 per cent YoY to £5.8bn (2022: £4.8bn). Gaming revenue grew by 29 per cent YoY to £3.7bn (2022: £2.9bn).
Excluding US operations, group revenue improved by 16 per cent YoY (17 per cent YoY CC) £5.9bn (2022: £5.1bn), with sports revenue rising by 12 per cent, while gaming revenue grew by 24 per cent.
US operations revenue improved by 38 per cent YoY to £3.6bn (2022: £2.6bn), UK&I revenue rose by 15 per cent YoY to £2.5bn (2022: £2.1bn), Australia revenue fell by eight per cent YoY to £1.2bn (2022: £1.3bn) and International revenue increased by 36 per cent YoY to £2.3bn (2022: £1.7bn).
“We are very excited that the addition of a US Flutter listing is now just days away. This is a pivotal moment for the Group as we make Flutter more accessible to US-based investors and gain access to deeper capital markets.”
Flutter Chief Executive Peter Jackson
Following the end of the quarter, Flutter completed the acquisition of Serbian brand MaxBet to its portfolio on January 9, purchasing 51 per cent of the operation for a reported €141m (£121m)
In addition, the group also continues to prepare for listing on the NYSE, which they say is “on track” to take place on January 29, subject to the effectiveness of its Form 20-F Registration Statement with the US Securities and Exchange Commission.
Flutter added that it will report full-year 2023 numbers in US GAAP and US dollars and will provide 2024 guidance later this year on March 26.
Jackson concluded: “Subject to the effectiveness of our Form 20-F registration statement with the US Securities and Exchange Commission, we are very excited that the addition of a US Flutter listing is now just days away. This is a pivotal moment for the Group as we make Flutter more accessible to US-based investors and gain access to deeper capital markets.
“I am looking forward to 2024 and further building on the momentum within the group to continue delivering growth.”
