Flutter's US bet drives first half profit 76% higher

By Padraic Halpin

DUBLIN (Reuters) -Flutter's first half core earnings jumped 76% as its fast growing U.S. Fanduel brand turned a profit for the first time in a "transformation point" for the group's prospects, the world's largest online betting company said on Wednesday.

The Dublin-based company said this made it the first online betting operator to turn a profit in the U.S and it did so six months ahead of schedule.

Flutter's shares, however, were 4.7% lower in early trade. Analysts at Jefferies said its full year guidance could be seen as conservative as it implied a 1% upgrade to consensus after a bigger beat in the first half.

Analysts at JPMorgan also noted a more cautious outlook on Australia, where Flutter's first half revenues fell by 1%.

The Paddy Power, Betfair and PokerStars owner has accrued investment-driven losses in the U.S. since the 2018 lifting of a nationwide ban on sports betting in the belief that its revenues there will grow five-fold to around $15 billion long term.

Flutter's U.S. revenue overtook that of its most profitable UK and Ireland market in 2022 and it recorded adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) there of 49 million pounds ($62.5 million) to June 30 versus a 132 million pound loss a year ago.

The U.S. profits contributed to reported EBITDA of 765 million pounds across the group, versus the 731 million pounds forecast by eight analyst polled by Refinitiv.

FanDuel, which contributed 98% of the 1.8 billion pounds of first half U.S. revenue, generated a 79 million pound profit in the period with the overall U.S. earnings dragged lower by the FOX Bet and PokerStars businesses.

Flutter and broadcaster Fox Corporation said last month it would close the FOX Bet sports betting platform.

A recovery in its UK and Irish business drove first half earnings there 24% higher, while its leading share of the U.S. sports betting market was 47% versus 50% in the first quarter with its slice of U.S. iGaming steady at 23%.

Flutter said it expects full year adjusted U.S. earnings of 90 million to 190 million pounds, as it invests further in the second half, and earnings in the rest of the group to be between 1.44 billion and 1.6 billion pounds.

That would eclipse the record full year earnings of 1.4 billion pounds Flutter posted during the COVID-19 online betting boom of 2020. ($1 = 0.7838 pounds)

(Reporting by Padraic Halpin, Editing by Louise Heavens and Barbara Lewis)