Paddy Power Betfair hopes that the “exciting potential” of the US sports betting market can act against regulatory and fiscal headwinds next year.
Announcing its Q3 results, the bookmaker saw group revenues rise 10 per cent to £483m, with a 15 per cent rise in online and 22 per cent in US sales.
Retail betting fell by four per cent, with the UK braced for the new rules over FOBT stakes, but in the US there were benefits from the July acquisition of FanDuel in July, mitigated by costs in foreign exchange translation.
Full-year EBITDA, pre-US sports betting, is now expected to be between £465m and £480m (previous guidance: £460m to 480m), with 2018’s US sports betting investment currently expected to total around £25m.
“In the US, the exciting potential of the sports betting opportunity and the strength of our strategic positioning has been evidenced by our experience to date in New Jersey,” said CEO Peter Jackson.
“FanDuel recorded a 30 per cent share of the sports-betting market in September, driven by a market-leading customer proposition, our strong brand presence and the ability to cross-sell from our fantasy sports player base.
“Overall, we are pleased with the substantial progress we continue to make against our strategic priorities. Our continued investment in brands and customer proposition means that all our businesses will exit the year with enhanced competitive positioning. Together with our scale and strong balance sheet this means we are better positioned to face the significant regulatory and fiscal headwinds that apply next year and to capitalise on the long-term industry growth opportunity."
Paddy Power Betfair’s group revenue was up by eight per cent on a proforma, constant currency basis in Q3.
However, while the World Cup added £22m in revenue, growth was stifled by customer-friendly results particularly in Australia, where there was a £9m gross impact to revenue prior to any benefit from customer recycling of winnings.
Online, revenue in Q3 was up by 15 per cent to £248m, with the Paddy Power brand performing particularly strongly due to an enhanced customer proposition and better marketing execution, which led to the winning of market share in the UK.
Online sportsbook results were in line with expectations and gaming revenue was up 26 per cent following a summer enhancement of the gaming product embedded within sports apps.
From January 2019, the Irish Government is raising betting duty from one per cent to two per cent for sportsbooks and from 15 per cent to 25 per cent for betting exchanges, while in the UK the new £2 stakes limit on FOBTs is set to be introduced in October 2019.
