The largest gambling operator on a global scale, Flutter Entertainment revealed that its profits for the first half of the year suffered a sharp 70% decline to £24 million as the company suffered from the negative impact of the coronavirus pandemic on sports.
The company revealed that its pretax profit declined from £80 million during the same period a year earlier to £24 million in the first six months of 2020. The gambling giant also shared that it faced increased costs primarily due to its multi-billion merger that was completed earlier this year, with these costs contributing to the significant decline in the first-half profits.
Earlier in 2020, in May, Flutter finalised its merger with the Stars Group, owner of SkyBet and PokerStars, creating the largest gambling conglomerate in the world.
However, the gambling giant shared that after the merger, The Stars Group’s contribution by the end of the first six-month period was beneficial to the 49% revenues increase from £1.02 billion in the same period a year earlier to £1.52 billion.
Flutter Entertainment announced that the sports betting revenue of all divisions of the group increased up to the middle of March before the coronavirus lockdown led to postponement and cancellation of many sporting events on a global scale. The massive lockdown and social distancing measures affected particularly Europe, where the lack of football, rugby and horse racing events inflicted the strongest hit on the company’s business.
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Flutter Entertainment announced that over the six-month period it benefitted from the large geographic and product diversification, as well as from the fact that more customers chose to access the company’s products online during the lengthy lockdown due to the Covid-19 crisis. Furthermore, the fact that racing continued in the US and Australia even during lockdown also helped Flutter Entertainment’s sports revenues increase in both regions.
Despite the challenges faced by the operator during the coronavirus pandemic, the Chief Executive Officer of the gambling giant, Peter Jackson, described the first half of the fiscal year as a “very strong one”. Mr Jackson further explained that the businesses of the operator had a great start at the beginning of the year, but, for the time being, the outlook remained quite uncertain because of the coronavirus pandemic, although the Covid-19 crisis also resulted in a change in customer behaviour.
The gambling company’s boss cited a recent survey held by the operator, which found that only about 50% of customers would stick with their preferred retail betting brand in case they move online. According to Mr Jackson, that was probably one of the reasons why Flutter Entertainment’s Paddy Power and SkyBet brands had performed so well during the coronavirus lockdown, while many retail gamblers were forced to start betting online.
Flutter’s boss further shared that despite the shift to online gambling, the gambling giant had no plans of reducing the number of sports betting outlets run under the Paddy Power brand.
- Author
Olivia Cole
