Australia Helps Flutter Entertainment Growth
Flutter Entertainment releases its preliminary annual results where is named Australia as a core market. The gambling giant, the largest in the world, spent big on its businesses in Australia and reaped the rewards.
It has been a challenging time for all gambling companies over the past 12-months. COVID-19 restrictions forced betting shop closures for a start. Furthermore, governments postponed and cancelled sporting events, and even horse racing returned with no live gamblers.
Flutter Entertainment was successful in driving its customers towards its online product. The company’s exposure in the land of bricks-and-mortar is nowhere near that of its rivals, including William Hill. Betfair is 100% online, while the acquisition of The Stars Group (TSG) bolstered the company’s online presence.
The Group settled a A$151.4 million liability concerning acquiring the remaining 20% of TSG Australia shares. Flutter Entertainment holds 100% of TSG Australia following the buyout.
Business Booming For Flutter Entertainment in Australia
Sportsbet and BetEasy are how Flutter Entertainment operates in Australia. The vast majority of customers bet on sports via the internet, and business is booming. The company records its financial figures in British pounds because it is listed on the London Stock Exchange. Those figures are most impressive.
- Total sportsbook stakes: £9.713 billion (an increase of 46% from 2019)
- Total revenue: £1.075 billion (up 59%)
- Cost of sales as a percentage of net revenue: 48.4%
- Gross profit: £555 million (up 47%)
- Adjusted operating profit: £288 million (up 119%)
Flutter Entertainment’s Australian customers flocked online during the 2020 financial year. Only in the second quarter, when all professional sports were on hold, did the company not see an increase in the number of average monthly players.
|Average monthly players||581,000||611,000||876,000||1,109,000||794,000|
|Average monthly players Year on Year||+9%||-2%||+39%||+53%||+26%|
Flutter Entertainment credited the strong top-line growth to Sportsbet absorbing BetEasy. This resulted in the addition of 675,000 new players. A condensed calendar of events, including the Spring Racing Carnival and the State of Origin, saw more than 1.1 million Australian punters flock to Sportsbet.
Chief Executive Thanks Colleagues
Peter Jackson is the Flutter Entertainment Chief Executive. His statement pointed to the year’s highlights and thanked his colleagues for their hard work in testing times.
“2020 was a historic year for the Group as we completed our merger with TSG, commenced the integration of our two businesses and increased our ownership of FanDuel in the US, whilst at the same time navigating the challenges presented by the Covid-19 pandemic.
Safer gambling is critical to building a sustainable global business and we are determined to lead the industry in implementing the highest standards of customer protection across our markets. This includes the UK, where we welcome the Government’s review of gambling legislation and support the delivery of a balanced framework that will protect vulnerable customers while allowing the many who enjoy a bet to continue to do so safely.
We delivered a very strong financial performance in 2020, benefiting from our scale and diversification. We continue to grow our recreational player base across all key regions, in Q4 alone the Group had over 7.6m monthly online players. Nowhere has our growth been more evident than in the US where we have consolidated our #1 position in this crucial market, with customer economics that continue to exceed our expectations, finishing the year as the first US online operator to reach over $1.1bn in gross gaming revenue.
During this exceptionally testing time, we have focused on safeguarding the welfare of colleagues and contributed more to the communities in which we operate. I would like to take this opportunity to thank all my colleagues for their ongoing commitment and resilience as we face these challenging times together. While the global outlook remains uncertain, our momentum remains strong and we look forward to the future with confidence.”
What Next For the Company?
Flutter Entertainment considers Australia as a core market alongside the United Kingdom. Sports betting is the main focus in Australia, but there is an untapped poker market waiting for the company.
The Australian government signed the Interactive Gambling Amendment Bill into law in 2017. Online poker sites withdrew from Australia as a result, including PokerStars. Flutter Entertainment looks to have its attention focusses on the emerging American sports betting market, but there are 575,000 registered Aussie poker players currently without a home. It would be awesome if inroads were made to bring online poker back to Australia.