Flutter Profits Took a Hit as US Players Win Big Betting on Football Games
Flutter, the owner of FanDuel, announced that its profits suffered due to players’ big winnings. The company described the current National Football League season as the most customer-friendly since launching its sports betting operations in the US.
This caused the group to have “extremely unfavorable US sports results ” for November and December. This was primarily due to complex combination bets made across many games or even inside a single game. On Wednesday morning, trading in the group’s London-listed shares dropped 4%.
Monday, December 30, was the day that Flutter lost the most money—$74 million—due to the Detroit Lions’ 40-34 victory over the San Francisco 49ers. According to the best sportsbook pay per head, nine players scored touchdowns in the game, and several were well-liked by betting consumers.
Flutter Profits Took a Hit
Up to the end of December, Flutter said the favorite had won 184 of the first 256 games of the season, with 77 percent of the heavier-backed teams winning during the company’s fourth reporting quarter. Games had also seen higher scores than expected.
Flutter said revenues would decline by about $390 million and adjusted earnings before interest, tax, depreciation, and amortization by $260 million from November 12 to December 31. Gross gaming revenue (GGR)—a key metric reflecting the difference between the amount wagered and the amount paid out in winnings—would be about $43 million lower.
As a result, US revenue forecasts for 2024 would be about $370 million lower than the previous guidance midpoint of $5.78 billion. After incremental one-off cost mitigations, 2024 US adjusted EBITDA is estimated to be about $205 million lower than the last midpoint guidance of $505 million. They achieved this without offering bookie bonuses.
Flutter’s Business Worldwide
According to Flutter, it has had more success outside the United States, particularly in the United Kingdom, where it has done well in the English Premier League. Compared to the midpoints of earlier guidance for operations outside the US, it had increased its expected 2024 revenue and adjusted EBITDA numbers by around 1% and 2%, respectively.
Last year, Flutter, the parent company of Paddy Power, decided to remove itself from the UK’s FTSE 100 index by relocating its primary listing to New York. The company announced its intention to quadruple its core earnings by 2027. Thanks to higher betting frequency than anticipated, it expects the US to contribute nearly half of this profit.
The two leading companies in the US sports betting market, FanDuel and DraftKings, generate over 65% of total income. FanDuel, developed by Flutter, captured 40% of the US market in 2024, with $5.78 billion in revenue from $50.7 billion in bets across 23 states.
DraftKings came in second, with $4.67 billion in income from $49.4 billion in wagers in 26 markets, including New Hampshire, Oregon, and Maine. Both businesses have successfully converted users into sports betting consumers by capitalizing on their daily fantasy sports market domination. Even though new competitors have emerged, they have managed to keep a significant portion of this increasing industry because of their best-in-class platforms.
Despite short-term setbacks in the US market, Flutter is confident in its expansion. According to projections made in September, profits were estimated to double by 2027, with the growing US sports betting industry accounting for roughly half of that increase.
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