Flutter Entertainment PLC (LON:FLTR) reported flat online gaming revenues in the third quarter but strong growth in the US betting market, leading it to rejig its full-year target.
The owner of the Paddy Power and Betfair brands improved its guidance for full year underlying profit (EBTIDA) from the US arm, which operates under the FanDuel brand, to an EBITDA loss of £40mln-£45mln from the previous £55mln.
Guidance for the group as a whole was kept unchanged, implying there has been a corresponding worsening elsewhere.
Total group revenues of £533mln in the third quarter were 9% year on year, not including the acquisition of Adjarabet, down from the 19% YOY growth in the first half but larger progressively from the £478mln in the first quarter and £408mln in the second.
Sports betting revenues grew 10% to £417mln and gaming was up 7% to £116mln, while Adjarabet added four percentage points to group growth in the quarter.
Online revenues were down 1% to £247mln, however, and the Paddy Power bookmaking shops arm saw revenue fall 9% to £75mln, which was offset by Australia revenues rising 19% to £119mln and the US surging by 67% to £91mln.
FanDuel has launched online sports betting in Pennsylvania, West Virginia and Indiana and chief executive Peter Jackson was “very encouraged by progress to date”, with industry data in Pennsylvania showing FanDuel is market leader with around a 50% market share, adding to its leading status in New Jersey.
Analysts at Shore Capital were impressed by the early success in the US, adding to the belief that Flutter "will be a leading player in what eventually could be a $20bn annual revenue market".
But ShoreCap noted the "modest growth continuing" at the core European online operations, reflecting tough World Cup comparatives, regulatory developments and market switch offs.