Flutter Estimates Dutch Market Withdrawal Could Cost It £50m, Company Will Not Bid on The Athletic

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A costly withdrawal

Flutter Entertainment has revealed that its withdrawal from the Dutch gambling market could cost £50m ($68m). In its third-quarter trading update on Tuesday morning, the Ireland-based gambling group estimated that its temporary exit from the Netherlands market would cost £10m ($13.6m) in the final quarter of this year and £40m ($54.5m) next year.

The company assumes that it will be operating in the regulated market in the Netherlands in the third quarter of 2022 and that it will break even for the final two quarters next year as it attempts to re-engage with its Dutch customers.

a reminder of the risks run in grey markets”

The regulated online gambling market in the Netherlands began on October 1. However, Flutter’s entry into the regulated market will be delayed as it only decided to withdraw from the unregulated market on the same day as the regulated market launch. Talking about Flutter’s costly withdrawal from the Dutch market, Regulus Partners analysts said that it is “a reminder of the risks run in grey markets – the cash flow is nice but capitalising the value is dangerous.”

Flutter Entertainment owns many notable gambling brands, including Paddy Power, Betfair, PokerStars, and FanDuel.

Downgrading earnings forecast

As a result of this Dutch withdrawal and some unfavorable sports results in the first few weeks of the final quarter of the year, Flutter has downgraded its 2021 earnings forecast.

Some of the sports betting results that were not good for Flutter included Tyson Fury winning his heavyweight boxing match against Deontay Wilder, Liverpool beating Manchester United 5-0, and Incentivise winning the Caulfield Cup horse race in Australia. There were also a lot of unfavorable results in the soccer space between international matches and recent Champions League fixtures.

Flutter’s adjusted earnings before interest, depreciation, and amortization (EBITDA) forecast for the full year are now £1.24bn ($1.7bn) to £1.28bn ($1.74bn), down from £1.27bn ($1.73bn) to £1.37bn ($1.87bn). EBITDA has been impacted by about £60m ($81.8m) following unfavorable sports results over October’s first 24 days.

The net revenue forecast for Flutter’s US operations remains at between £1.285bn ($1.75bn) and £1.425bn ($1.94bn), while loss expectations are between £250m ($341m) and £275m ($375m) for the FanDuel owner.

A strong third-quarter for Flutter

In terms of third-quarter results, revenue for the three months ended September 30 was £1.4bn ($1.91bn), a year-on-year rise of 9%. Sports betting revenue experienced a 13% rise up to £908m ($1.24bn), while gaming revenue rose 1%. Average monthly player numbers across the group were also up 13% for the period. Total retail revenues were about 90% of the 2019 figures and Australian revenue rose 20% year-on-year to £370m ($504m).

US revenue appreciated 85% to £280m ($382m), with FanDuel generating 94% of this amount. FanDuel now has online sportsbooks live in a dozen states, with sports revenue of £184m ($251m). It also has gaming products in five states, with gaming revenue reaching £95m ($129.5m).

we have grown our online recreational player base by 46% in just two years”

Flutter Entertainment chief executive Peter Jackson spoke about the strong third-quarter performance and said “we have grown our online recreational player base by 46% in just two years.” He also mentioned how the continuing expansion in the US and other international jurisdictions will help to further grow Flutter’s player base next year.

Jackson added that despite reports, his company will not make a play for sports media website The Athletic.

The post Flutter Estimates Dutch Market Withdrawal Could Cost It £50m, Company Will Not Bid on The Athletic appeared first on Latest Online Gambling News.



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