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Sky Bet and Paddy Power owner Flutter Entertainment saw UK revenue grow 17% in the final quarter before the Government announced safer gambling reforms that could cost the business £100 million a year.
The group said a major reason for the success was that customers who signed up during the World Cup stuck around.
But boss Peter Jackson said the reforms in question couldn’t yet be implemented in the way the Government has proposed without changes to technology or data rules.
“It will be very difficult for us to implement these measures now,” he said. “It’s not clear what those will be and there will have to be technical reforms for those to be in place.
The reform expected to have the largest impact on revenue is the introduction of new ‘financial risk checks’, where gambling firms must perform ‘passive’ checks for credit black marks like county court judgements on customers depositing more than £125 in a month. Customers depositing £1,000 per day of £2,000 in 90 days will face closer scrutiny, which the Government likened to credit checks for borrowers.
The Department for Culture Media and Sport has put out a consultation on the reforms. Jackson said it remained to be seen how the Government would simultaneously deliver its promises of protecting those at risk and not introducing too much friction for gamblers.
“That’s the whole point of the consultation,” he said.
But a hit to UK revenue will be a relatively small impact for Flutter as a whole, as US betting brand FanDuel becomes an increasingly large part of the business.
The US brought in £908 million in revenue in Q1, £300 million more than the UK and Ireland. Flutter cited that growing US presence when it announced plans to pursue a secondary listing in the US, which it added could be a step towards a primary listing there.
Shareholders rubber-stamped that plan last week, but with other businesses like chip-maker Arm and construction group CRH also announcing plans to list in New York, authorities have worked to try to make London a more attractive place to list. Last night, the FCA announced reforms to its listing rules to make them “more effective, easier to understand and more competitive”.
However, Jackson said the reforms would not impact Flutter’s long-term goal of primarily listing in the US. He said it was the buzz of the US market rather than cumbersome UK listing rules that made the US appealing.
“We’ve had unanimous support – we’re delighted to receive that,” he said. “From our perspective, what is driving us to the US are pull factors: having our brand talked about and exposed in the US media is a big one.
“And then there is a strong connection between the really strong retail investor market there and the rest of the market. And using equity to reward and retain colleagues in the US and using equity to reward affiliates and media businesses.”
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