As the gaming group reflects on a first half of the year that “exceeded our expectations,” Flutter Entertainment has announced its plan to file a petition with the US Supreme Court on the $100 million PokerStars judgement.
Flutter “made substantial progress against our operational and strategic objectives while maintaining excellent momentum in growing our player base,” according to Peter Jackson, the company’s CEO.
For the six months ended June 30, 2021, pro forma overall revenue grew 30 percent to £3.05 billion (2020: $2.38 billion), with sports revenue up 57 percent to £1.89 billion (2020: £1.19 billion) and gaming revenue marginally down at £1.15 billion (2020: £1.19 billion).
Excellent online performance
The increase in sports is attributed to the company’s “excellent online performance in the UK & Ireland, Australia, and the United States,” with the latter’s footprint growing to 10 states from four in the previous year. Sports income benefited from a more typical calendar in 2021, as well as better-than-expected performances.
While sports benefited from “easy comparitives,” poker and casinos experienced an increase in player engagement during the first worldwide lockdown period in H1 2020.
Gross profit increased 18 percent to £1.94 billion (2020: £1.65 billion), while adjusted EBITDA fell 13 percent to £597 million (2020: $684 million). Excluding the US, adjusted EBITDA was down 2 percent as strong operating leverage in the UK & Ireland online and Australia supported increased investment in the international division.
Net debt at the conclusion of the period was down 7 percent year on year to £2.68 billion (2020: £2.89 billion), with average player numbers up 40 percent.
Number one online sports betting operator
Jackson explained: “In the US, we remain the number one online sports betting operator by some distance thanks to the quality of our products and the extensive reach of the FanDuel brand.
“The customer economics we are seeing in the US bode very well for the future, with early FanDuel customers generating positive payback within the first 12 months of acquisition.
“We remain absolutely focused on extending our sports product advantages and replicating our market share success in further states as they regulate.
“In gaming we see an opportunity to grow our market share and look forward to further enhancing our product offering in the coming months.
“In the UK and Ireland, integration is progressing well with our three brands benefiting from shared learnings across product and operations.
“In Australia, Sportsbet delivered a phenomenal H1 performance with high customer retention rates during a period of reduced COVID disruption, suggesting that the business has experienced a permanent step change in scale.
“In international, which faced particularly challenging revenue comparatives following the growth in poker last year, revenue declines were less pronounced than anticipated as we continue to reposition and invest in the business for long-term sustainable growth.
“Taking a lead on safer gambling remains a key priority for the group as we continue investment across our brands and step up our activity to promote safer gambling awareness and tools.
“In markets where our campaigns are most advanced we are already seeing a positive impact on customer engagement and usage of safer gambling tools.
“The second half of the year has started well and we look forward to making further progress in the coming months.”
Intent to file petition to challenge Kentucky judgement
Following a previous verdict by the Kentucky Supreme Court in regard to a legacy action brought by the state against two TSG Isle of Man entities, Flutter has updated that it intends to file a petition with the US Supreme Court to challenge the Kentucky judgement.
The firm says it will file its petition this month and anticipates that the US Supreme Court will determine whether to hear the case in the fourth quarter of this year.
Finally, the corporation states that the second half of the year “has started well,” but it notes that July is generally a slower month for many sectors of the business due to fewer athletic events.
Expected adjusted EBITDA
Flutter expects adjusted EBITDA of between £1.27 billion and £1.37 billion for the year, excluding the United States, reflecting confidence in the underlying performance across the UK & Ireland and Australian divisions, as well as the expectation that retail estates can remain open for the rest of the year. International EBITDA will be negatively impacted by between £15 million and £25 million in H2 2021 due to the German tax reform. The business is also less likely to benefit from some of the tailwinds it enjoyed in H1 when, as a result of the stay-at-home restrictions, player engagement remained high in parts of Europe. In the US, it expects revenue of £1.28 billion to £1.42 billion and an adjusted EBITDA loss of £225 million to £275 million, assuming that online launches begin in both Arizona and Connecticut.