Locked-down punters swapping sports betting for online poker and casino games during the coronavirus crisis helped the Paddy Power and Sky Bet owner, Flutter Entertainment, to report better-than-expected profits in the first half of 2020.
The world’s largest online betting company, created via the $12bn (£9.1bn) merger of Flutter and Canada’s The Stars Group, said pre-tax profits fell by 70% to £24m in the six months to the end of June.
The decline was largely because of costs and accounting changes associated with the merger. Flutter’s chief executive, Peter Jackson, lauded a performance that resulted in the enlarged firm brushing off the effect of the pandemic lockdown, which led to cancelled or postponed sports events and the closure of its network of high street bookmakers in the UK and Ireland.
Jackson said the impact of the pandemic on sport was “more than offset by an increase in the number of recreational customers playing our poker and gaming products globally, as people sought new forms of home entertainment”.
The group managed to increase revenue from sports betting in the US and Australia, where horse racing has continued during the pandemic and enjoyed greater television prominence as other sports stopped.
Analysts at the stockbroker Jefferies described Flutter’s performance as “another upbeat gambling sector update”, with the rise of online poker and casino games largely cushioning the blow of the pandemic for the industry.
The merger with The Stars Group has increased the company’s spread across regions and forms of gambling, particularly poker.
PokerStars, acquired as part of the merger, increased its revenue by 40% in the first half to £697m. Gaming grew by 43%, with overall poker revenue up 38% and casino growth of 51%.
Jackson said Flutter was in good shape coming out of lockdown, as the online gaming customers picked up during lockdown appear to have stuck with the company, while sports revenue had returned as sports such as football pick up where they left off.
“Looking ahead, we have identified promising opportunities to increase investment across the group and, while the outlook with respect to Covid-19 remains highly uncertain, the diversification of our group means we approach the future with confidence,” Jackson said.
The group has also built a promising business in the US market, which has been rapidly expanding after sports betting regulations were relaxed. Flutter has established a beachhead in North America via the acquisition of the fantasy sports betting platform FanDuel and the Fox Bet brand.