Flutter Entertainment has raised its 2024 guidance by 1% following an “excellent period” of trading in Q3.

Headline figures showed corporate revenues of $3.2bn – up 27% from 2023 comparatives – and group EBITDA increasing by 75% to $450m (Q3 2023: $258m), as well as Q3 net losses narrowing to $114m.

On the latest episode of iGaming Daily, Ted Menmuir, SBC’s Content Director, and Conor Porter, Senior Journalist for CasinoBeats, took a deep dive into the results.

Flutter continues to grow

Flutter reported considerable growth for its US business, FanDuel. In Q3 2024, FanDuel’s igaming and sports betting operations reported 3.2 million average monthly players, a 28% increase year-over-year, and revenue reached $1.2bn, up 51% YoY.

Its adjusted EBITDA closed at $58m in Q3 compared to a loss of $55m in Q3 2023.

Despite these positive results, which Flutter’s CEO Peter Jackson attributed to capitalising on the start of the new NFL season, analysts questioned whether FanDuel would maintain its “marketing spend and generosity”, especially for its parlay offerings.

Responding to investors, Jackson said: “From a parlay perspective, you’re right; it does drive a significant improvement in the hold. I think we need to remember that we’ve seen a big step up in parlay adoption year-over-year. Customers really like the product.

“It is a higher-margin product, but the generosity proportion we offer our customers remains consistent as a percentage. So naturally, as margins increase, we will be spending more.”

In many US states, FanDuel battles with DraftKings for market leadership and Ted explained that the intense probing on the area is because “every move that FanDuel makes is referenced against DraftKings”. 

He added: “They’re trying to find out who’s got the better edge on parlays. Peter Jackson, I think he must have answered 12 questions directed on parlays and he just stood by the belief that it is a core dynamic for FanDuel. 

“It believes that overall, with the popularity of parlays in the states, it offers the best premiums on them and it isn’t afraid. He even admitted that in October they got stung by the parlay factor but FanDuel is determined to keep their exposure in the market.” 

UK growth can never be underestimated

Outside the US, Q3 results saw Flutter’s UK and Ireland brands achieve revenue of $868m, an 18% increase from the $719m reported during the same period in 2023. Additionally, adjusted EBITDA rose by 29% to $237m and Average Monthly Players (AMPs) rose by 13%.

Success in the quarter was attributed to marketing efficiencies around the UEFA European Football Championship, which helped optimise spending and customer acquisition for respective brands. 

Talking about the UK growth, Conor said: “I think particularly in the UK, they said that they’re happy with the market share that they’ve got. They believe they’re adapting well to the new regulations that are planning on coming into the UK with the white paper.

“They’ve talked about their momentum in the UK market in terms of players, product improvements and igaming is cross-selling well from sportsbook so it’s all interlinking well there in the UK market.”

Rest of the World

Flutter’s International Unit achieved a 15% increase in revenues to $781m, with enhanced contributions from the Sisal Italia subsidiary.

Jackson commented: “Outside of the US, all divisions delivered a strong performance in the quarter as they leveraged the benefits of Flutter Edge. Sisal continued to make significant share gains in Italy as we look to expand our presence there with the addition of Snai. In Australia, Sportsbet has shown encouraging trends.”

Focusing on Italy, Ted spoke about the “big bet” Flutter is making with its €2.3bn acquisition of Snaitech.

He said: “They’re paying a premium for Snai. But at the same time, it’s a market that via the regulations coming into play is seeing a huge transfer from retail to online. 

“The thing about Flutter here is that their bet is big. It’s not just a case of we’re going to launch a couple of new brands and do a couple of new sponsorships, they’re going after one of the top tier operators. Snai is a proven top three in Italy and even if it gets a makeover by Flutter Edge, it’s still got market dynamics where it is in that premium spot. 

“It’s another market in which Flutter is rearranging the terms of play and Flutter is going in there and transforming that market and shaping it how it wants to play in it.”

Given Flutter also has its Sisal Italia subsidiary, there are concerns that the two brands will compete for market share, however, the firm’s CFO Rob Coldrake told investors that he believes the pair can complement each other in the Italian market.