FLUTTER FLIES AWAY
Euronext Dublin, formerly the Irish Stock Exchange, lost one of its largest counters in January when gambling group Flutter Entertainment cancelled its listing. The move coincided with the start of trading in Flutter shares on the New York Stock Exchange.
Flutter has retained its listing on the main market of the London Stock Exchange, though the company wants to move that primary listing to New York too. Shareholders will be asked to approve the decision at the annual meeting in May, and kickback is expected from some patriotic UK investors.
The business logic for Flutter wrapping itself in the stars and stripes looks compelling. Gambling bans in US states have been steadily unwinding since a 2018 Supreme Court decision, and Flutter chief executive Peter Jackson sees huge opportunity for growth in the coming years.
At the half-year stage in 2023, Flutter’s revenue breakdown was US 37%, UK 23%, Australia 13%, Italy, Turkey and other countries 12%, and Ireland just 3%. The Flutter story all started with Paddy Power, which floated on the London and Dublin stock exchanges in December 2000. Though Ireland’s importance for revenue is much diminished, for the moment the company is still domiciled in Ireland and employs hundreds of people in Dublin.
The Flutter business model now is very different to when Stuart Kenny and the Powers were running the business.
Sportsbook betting – bets on football, racing etc – accounts for 62% of turnover, with gaming on 38%. Gaming spans all sorts of online slot machines, poker, bingo and lotteries, and is more profitable than the sports punting.
In the company’s UK and Ireland division, where the revenue split
Flutter boss Peter Jackson (left) has signed up tight-end legend Rob Gronkowski for the marketing push in America
is sports 57% and gaming 43%, the Ebitda profit margin in H1 2023 was 32% compared with c.18% a decade ago.
The gambling scourge is driven by enormous investment in marketing, which runs to c.€180m a month across the Flutter group. In the US, where Flutter is most interested in making a splash, Flutter spends $10 on marketing for every €40 sucked from punters.
In the period January to June 2023, Flutter had average monthly players of 3.1 million in the US, and their average sportsbook stakes per month was an astonishing €970. The corresponding figure for online gamblers in Ireland the UK was €220, which adds up when there are 4.1 million of them.