US arm FanDuel drives 'best in class' Flutter Entertainment forward, with more growth forecast for 2024

Flutter Entertainment's US arm FanDuel continues to be the operator's star performer as the gambling industry giant continues its pivot to the States with plans for a primary listing on the New York Stock Exchange (NYSE) at the end of May.

The parent company of Paddy Power, Betfair and Sky Bet reported a leap in revenue, earnings and players as it unveiled its results for 2023 on Tuesday and expects that growth to continue in 2024.

Flutter, reporting for the first time in dollars, said revenue for the year increased by nearly 25 per cent to $11.79 billion (approx £9.3bn), average monthly players were up by more than 20 per cent to 12.3 million and adjusted Ebitda (earnings before interest, taxation, depreciation and amortisation) rose by more than 45 per cent year-on-year to $1.87bn.

The company did however record a net loss of $1.2bn in 2023 due to a number of expenses, including a $725m writedown against the value of the PokerStars brand.

Flutter's UK and Ireland brands added two percentage points of market share to reach 30 per cent during the year.

That helped offset "softness" in the Australian horseracing market across the second half of 2023, which is expected to persist through this year. 

However, it was FanDuel which had "transformed the group’s earnings profile", with revenue up 40.7 per cent and a first year of positive Ebitda of $167m.

FanDuel, which became the number one brand in US iGaming in January to add to the brand's market leading position in US sports betting, has also helped drive what Flutter described as a "very good start to 2024" with group revenue up 23.4 per cent for the first 11 weeks of the year.

In the US, revenue for the start of 2024 increased by 55.6 per cent thanks to a record Super Bowl during which FanDuel took 14 million bets totalling more than $300m.

Flutter acquired a secondary listing on the NYSE in January and chief executive Peter Jackson said the company had been "encouraged by the increased focus from new US investors" which had followed.

Jackson said Flutter was moving towards a shareholder vote on May 1 to approve a primary listing move to NYSE. That would be a blow to the London Stock Exchange, although Jackson said Flutter would maintain a secondary listing in London.

Flutter chief executive Peter Jackson: encouraged by reaction from US investors

He added: "We have a lot of shareholders who can only hold UK or European shares and have told us it's important for us to maintain our secondary listing in London."

The company said it expected group revenue growth of 17.5 per cent and core earnings growth of around 30 per cent in 2024.

Jackson added: "We believe that our strategy and competitive advantages position us well to continue to grow the business through both organic and inorganic opportunities."

David Brohan, gaming and leisure analyst with stockbrokers Goodbody, described Flutter as being "best in class, with its US business continuing to go from strength to strength".

Flutter shares closed down 1.10% at 17,095 on Tuesday.

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