Flutter’s winning hand as poker becomes a big deal in lockdown
THE gambling colossus behind Sky Bet, Betfair and Paddy Power netted a bumper profit during lockdown as bored punters piled into online poker.
Like-for-like profits at the world’s biggest digital betting firm Flutter surged to £684m in the first half of 2020 – up 31pc on a year earlier.
Revenue rose 49pc to £1.5bn, partly due to the acquisition of Canadian firm Stars Group in May.
Peter Jackson, chief executive, said that Flutter’s global reach meant that the company had also been able to benefit from sports betting in countries such as the US and Australia, where horse racing has continued throughout the crisis.
He said: “A lot of people did come and play poker.
“But these are people who are spending £10 a week – it is very low levels of expenditure. It is just a big growth in recreational customers.”
Flutter announced plans for a £10bn merger with Stars Group, the Torontolisted owner of Sky Bet, last October. Despite initial fears that it would face opposition from competition regulators, the deal was completed ahead of schedule in May.
Shares, which are up by more than a third since the start of the year, ended 105p off at £124.75, leaving the company worth almost £20bn.
The firm’s online poker brand PokerStars posted a 40pc jump in revenue, with profits more than two-thirds higher. This offset a decline in returns from Paddy Power and Betfair, where sales fell 8pc and profits sank 33pc.
Peel Hunt analyst Ivor Jones said:
“Poker revenue had been in decline prior to lockdown.”
James Rowland Clark at Barclays said the figures for the first half of the year were impressively ahead of forecasts.
Gambling firms have been under growing pressure from Westminster over the past few years, amid concerns they were not doing enough to protect vulnerable punters and addicts from massive losses. Promoting responsible gambling is costing the firm about £65m, analysts said.
Mr Jackson said that 20pc of the company’s advertising is focused on safer gambling.
He added: “Some people have said to me that’s too high, but we think it is appropriate.”
Meanwhile, the firm is continuing its bid to conquer the US sports gambling market. Placing bets on sports, for decades illegal across most of the US, is being rolled out on a state-by-state basis after a key supreme court judgment in 2018.
Flutter has a joint venture with sports fantasy gaming platform FanDuel and a partnership with Fox Sports.
Mr Jackson said he is pleased with the business’s performance in America, and added that Flutter will soon be operating in nine states.
The pandemic had a mixed impact on the pace at which the US ban is being rolled back.
He said: “There are some states where things have slowed down because the local governments have been unable to get together. And there are some states that have accelerated because they are trying to bring in additional tax revenue.”