The Covid-19 outbreak has had a cataclysmic effect on major industries around the world.
Unsurprisingly, with barely any sport on at the moment the bookmakers are also beginning to fear the worst, with no concrete date for a return of football, horse racing, tennis and the like.
But they do have other area to focus on, and the Flutter Entertainment Group – which includes firms such as Betfair and Paddy Power – have posted encouraging financial results for the first quarter of 2020 despite the sporting blackout.
Revenue has fallen by 32% since horse racing was suspended in the UK and Ireland, and there has been a drop-off of 46% of sports revenue overall since the pandemic began.
However, these percentages are actually lower than predicted – thanks in part to the continuation of horse racing and football in some areas around the world. Flutter had estimated staggering losses of around £100 million if the blackout went on past July, with an additional £30 million on top each month if all racing had been wiped out.
And in Australia, their brand Sportsbet has enjoyed a timely boost given its online platform – betting shops are currently closed down under – and the continuation of horse racing in the country.
So let’s take a look at Flutter’s first quarter report, and see how damaging the outbreak has been to their operations – and, by proxy, the betting industry overall.
A Change in Direction
In a surprising turn of events, Flutter actually posted revenue growth of 16% in the first quarter of the year despite the disruption.
They were up in all categories, year on year, as far as profits are concerned, and that is thanks in part to a stellar couple of months in January and February.
But the overall feel is one of positivity even during March and April, with online gaming growth up 20% and as high as 25% when compared to the first quarter of 2019.
What does that mean? It is likely that sports bettors are turning to casino gaming and other sources of entertainment during the downtime.
The report spoke of excellent revenue figures, which had been driven by ‘strong active customer growth in Australia and the US’, while the Paddy Power Betfair brand had enjoyed good growth online, with their operation in the USA ‘continuing to exceed expectations’.
The chief executive of the Flutter Entertainment Group, Peter Jackson, said: “The group performed very well in the period prior to the disruption to sporting events in mid-March.
“We delivered strong customer growth across each of our brands and benefitted from favourable sports results across our sportsbooks.
“Following the widespread cancellation of sporting events, group revenues have been more resilient than we initially expected, helped by the continuation of horse racing in Australia and the US.”
There was further good news for the firm overseas. Flutter’s merger with FanDuel on US soil continues to reap dividends, with substantial first quarter growth of 2020 of some 72%. More than 100,000 new customers have signed up with the firm, and their market share in North America is now a powerful 41%.
To cement their progress, Flutter had planned to merge with the Stars Group – a move that has now been given the green light by the Competition and Consumer Protection Commission.
The share deal, worth a handsome $6 billion, will help Flutter to create the world’s largest betting organisation as far as global revenue is concerned, and if approved by shareholders once more stock in the Group will surely rise.
“Following approval of the deal yesterday by the Irish Competition and Consumer Protection Commission, we look forward to completing the transaction in Q2 upon receipt of outstanding shareholder and regulatory approvals,” Jackson confirmed on April 17.
A Cause for Some Happiness
The positivity in Flutter’s financial reporting has already had a number of positive knock-on effects.
They were one of the brands to take part in the Virtual Grand National, offering odds on the race and donating all profits to the NHS Charities Trust – a whopping £2.6 million was raised.
And while millions of workers across the UK are being furloughed on the government’s job retention scheme, Flutter have announced that all of their staff will be retained on full pay for the foreseeable future.
“Should the duration of the crisis be such that not taking this support would jeopardise jobs, we will review our position,” they said in a statement, but they certainly deserve plaudits for their approach thus far.