Flut­ter’s win­ning hand as poker be­comes a big deal in lock­down

The Daily Telegraph - Business - - Business - By Oliver Gill

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.”

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