Flutter Entertainment, owner of Paddy Power, is planning an expansion in Europe, Latin America and the USA, aiming to accelerate its recovery after suffering from canceled sports events due to the new coronavirus pandemic in the first half.
The group generated a profit of just £ 24 million in the first six months of 2020, 70% below the amount for the same period last year. However, revenues increased by 49%, reaching £ 1.5 billion.
The company admitted that the second half of the year started well, helped by the readjusted sports calendar. But the business outlook remains “highly uncertain”, given the risk of further disruptions related to Covid-19 and other regulatory changes in international markets.
For this year, as a whole, Flutter is projecting earnings between £ 1.2 billion and £ 1.3 billion. The calculation excludes the USA, where a loss of between £ 140 million and £ 160 million is expected.
Paddy Power planning for the American market
Social isolation spurred the personalized use of online poker in Australia and the USA. However, online revenues for the first half fell 8%. While Paddy Power’s retail business recorded a loss of £ 10 million in the first half due to store closures.
Chief Financial Officer Jonathan Hill said the United States is the “biggest opportunity for growth” and that the group expects to be present in nine states by the end of 2020
At the beginning of last year, the company was only in the New Jersey market. As such, Flutter is confident of making a profit in each US state within two years of entry.
Chief Executive Peter Jackson stressed that the diversification of Flutter’s businesses – in its various modalities of online and retail betting, sports betting in the United States, betting stock and gaming products – allows “to plan the future with confidence”.