Business

Flutter and 888 suffer revenue drops after safer gambling moves

Two of the UK’s largest gaming companies said their first-half revenue was impacted by the implementation of safer gaming initiatives ahead of long-awaited reforms to gaming laws.

flutter, which owns Paddy Power, Sky Bet and Betfair, said on Friday that revenue in the UK fell 4 per cent in the six months to June 30 compared to the same period last year. Online gambling company 888 said half-year revenue from its UK operation fell 25 percent year-on-year to £120.8 million.

Both operators said revenue in the UK, one of their main markets, was suffering Efforts to combat problem gamblingalong with a drop in user activity compared to last year when the UK was under Covid-19 restrictions.

But Flutter shrugged off the impact on its UK business as its US subsidiary FanDuel, which now controls about half of the US sports betting market, reported positive earnings before interest, taxes, depreciation and amortization of £22m for the first time in the second quarter.

Flutter’s group revenue – around a third of which comes from its US brands, including FanDuel – rose 11 per cent to nearly £3.4 billion in the six months to June 30.

The group’s share price rose 9.2 percent to £102.45 in early morning trading in London, while the share price of 888 – which relies on the UK for around a third of group sales – down 7.5 per cent to 148 pence.

safer gambling Actions in the UK cost Flutter £48m in the first half of the year, with the group introducing £10 limits on online slots wagers and introducing mandatory deposit limits for all customers under the age of 25. Rival 888 has implemented similar measures.

Last month, proposals to reform UK gambling laws were postponed for the fourth time after Boris Johnson was ousted as UK Prime Minister. The package of measures could include maximum stakes for online casinos, a ban on VIP packages for problem gamblers and restrictions on gambling sponsorship on football shirts.

“I don’t think it helps that this uncertainty is sweeping the sector,” said Peter Jackson, Flutter’s chief executive.

Despite fears of a slowdown in consumer spending in the UK, the group expects to return to sales growth in its home market in the second half of the year.

“The US is on a real growth trajectory, but the rest of the world is still growing very well,” Jackson added.

Analysts at Davy Research wrote that Flutter’s performance showed “no signs of a consumer slowdown,” with revenue from the UK and Ireland picking up towards the end of the second quarter. Flutter’s strong trade performance in the US was “most notable” as revenue could come in 25 percent higher than forecast, they added.

Itai Pazner, chief executive officer of 888, said the group’s decline in sales “mainly reflects market conditions in the UK”. 888 group-wide revenue fell 12.1 per cent to £332.1m in the six months ended June 30.

“However, we believe the proactive measures we have taken to improve player protection and drive higher standards of player safety have placed the group in an even stronger position for the future,” added Pazner.

https://www.ft.com/content/ec7c003c-0d98-43a4-9cac-5f1f87df418d Flutter and 888 suffer revenue drops after safer gambling moves

Adam Bradshaw

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