Market growth was integral to Flutter’s third quarter success. Delivering market updates; the firm’s CEO Peter Jackson and CFO Rob Coldrake provided a closer examination of key developments across core markets for Q4 and beyond.
UK growth can never be underestimated
The UK continues on a period of regulatory transformation, however, whilst there was turbulence for many, Flutter was immensely pleased with the success of its heritage portfolio that continues to take market share in the UK – “an element not underestimated by leadership”
Coldrake emphasised that momentum is strong in the UK, as it “continues to perform extremely well”, this is largely fuelled by a strong output from its gaming business, which was boosted by 29% increase in adjusted EBITDA to $342m.
Jackson added: “Clearly, as we get into 2025, we will start to annualise some of the changes that we know our competitors have made. And I think it will become more difficult to grow market share at the same rate, although we shouldn’t underestimate how strong our product is in the market at the moment.”
Brazil – working towards January launch
The NSX acquisition has intensified excitement for Flutter in Brazil, enabling the operator to “push on” in the market, by delivering Flutter Edge enhancements to Betnacional pricing, products and operating margins.
Notably, Jackson remained optimistic about the market opening on 1st January. However, he admitted that they don’t have affirmative confirmation of Bets launch date and there are still regulatory challenges at play.
There was real optimism from Flutter over their opportunities in the Brazilian market though, with investment behind the NSX brand providing a platform for growth in the newly regulated market.
Coldrake stated: “We’ve grown there with our brands that we’ve got there already. We’re very excited about the NSX acquisition. And we feel that gives us the ability to really kind of push on in Brazil and investing behind that brand in 2025 as we laid out at the Investor Day, something that we’re planning to do and really take advantage of what we think is a very exciting market with lots of opportunity.”
Australia – grounds for a quick recovery
The operator provided a positive outlook for the Australian market having enjoyed success, despite a punter-friendly Melbourne Cup result.
AMP growth is at the forefront of positivity for Flutter in Australia according to Jackson, who forecasts a return to growth for its SportsBet subsidiary in a market that has stalled due ongoing regulatory adjustments .
Jackson said: “We’ve got to remember next year, we’ve got a lot of taxes we’re going to annualise. But I think it just goes back to the strength of the business and the benefits that Australia continues to provide to the rest of the Group through The Flutter Edge in terms of helping us with things like generosity and products.”
Italy – target is Gold
Achieving 40% growth in Italy, the market was deemed as a key factor in Flutter elevating the guidance of its International unit by 3%.
Italian ambitions are refreshed by the €2.3bn acquisition of Snaitech – in which the international unit must guarantee gold ranking for its portfolio of SISAL, Betfair, PokerStars and SNAI.
The latest quarter saw Flutter exceed expectations in the country, a trend mirrored by the group’s wider European performance. Coldrake commented: “What we’ve seen since Sisal has come into the Flutter’s table is the fact that being an omnichannel operator in Italy enables you to continue taking share because of the advertising restrictions there. And we see us kind of compounding that with Snai coming on board as well.”
“Snai is a really standout brand by itself. Snai is a brand in the Italian market that’s synonymous with sports betting. So it’s a very different and complementary brand to Sisal. So we see them both operating alongside one another and really kind of enhancing our position in the market overall and taking that gold medal position.”
US – Netflix…but no chill on parlays
Despite FanDuel achieving a positive swing in Q3 adjusted EBITDA to $58m, overturning previous losses of $55m, US results are likely to be dampened by unfavourable sports outcomes recorded in October.
During the call, analysts questioned whether FanDuel would maintain its “marketing spend and generosity” through to the end of the year.
In spite of unfavourable sports swings, leadership stands by FanDuel’s promotions, asserting that “customer acquisition in new and existing states remains compelling, with payback periods of 18 months.”
Peter Jackson acknowledged that FanDuel had been impacted in October by its generous parlay offerings, which provided optimal prices and accuracy to customers, but he described the effect as a “material differential” between Flutter and its US competitors.
Jackson revealed that during the upcoming festive period, FanDuel will serve as a partner of Netflix in its broadcast of Christmas NFL games. “We’ll be delighted to deliver our exciting product for Americans to get behind on Christmas Day.”
“From a parlay perspective, you’re right; it does drive a significant improvement in the hold. I think we need to remember that we’ve seen a big step up in parlay adoption year-over-year. Customers really like the product.
“It is a higher-margin product, but the generosity proportion we offer our customers remains consistent as a percentage. So naturally, as margins increase, we will be spending more.”
Additionally, Jackson expressed his elation at overcoming strong opposition to narrowly pass the sports betting bill in Missouri.
