UK & Ireland – Flutter expresses disappointment in Gambling Act review delay as revenue dipsBy William - 15 August 2022
Flutter Entertainment has cited proactive safer gambling actions and the prior year Covid-related increase in player days moderating towards pre-Covid levels for the Group’s four per cent revenue decline in the UK and Ireland.
The actions taken in 2021 to improve the sustainability of the business in advance of the Government’s review of the Gambling Act had an annualised revenue impact of £48m during H1.
Flutter described the delay to the publication of the UK Gambling Act Review White Paper as ‘disappointing’, but said that proactive safer gambling actions positioned the business well for the future.
Flutter said it ‘welcomes and fully supports’ the recent progress towards regulation in Ireland, and that the business is ‘meaningfully contributing’ to the legislative process.
“In the UK, while the delay in publishing the Gambling Act Review White Paper has been disappointing, we are confident that the safer gambling changes we have already made to date position us well for the future,” commented Chief Executive Peter Jackson.
“The second half of the year has started well and we look forward to the start of the football seasons in both the US and Europe. Being part of the Flutter Group provides unique strategic advantages to our portfolio of brands, giving access to expertise, technology and resources to drive performance and capitalise on further growth opportunities we see ahead.”
Online performance improved sequentially with Q2 four per cent lower versus 20 per cent lower in Q1. This included a return to year-on-year gaming revenue growth in June 2022 as Flutter lapped the introduction of some of these safer gambling measures, giving the Group confidence of delivering growth in H2.
This growth will be driven by continued expansion of its recreational customer base, which has increased at a compound rate of 13 per cent since 2019. Combined with safer gambling initiatives just five per cent of revenue, excluding Tombola, came from the highest value tier in H1. The proportion of revenue from Flutter’s lowest value tier has increased by 14 percentage points since H1 2019 to 43 per cent.
In the first half of 2022, Sky Bet released a number of improvements to its pre-game sports betting product, including the launch of ‘BuildABet’, which has already been used by nearly one-third of football customers. Further enhancements are planned between now and December.
On the gaming side, Paddy Power continues to innovate its offering with branded slots content and free-to-play initiatives proving popular with direct gaming customers. Over 80 per cent of customers are playing with the daily engagement tool ‘Wonder Wheel’, which is powering significant gaming customer volumes and retention levels.
As Flutter further integrates the businesses, it will optimise the efficiency of marketing and promotional spend by delivering more value to the right customers at the right time and a greater allocation of spend to more recreational brands, integrate more of the SBG technology stack onto proprietary platforms, and remove team structure complexity.
The Group believes these initiatives will both help offset current high inflationary headwinds and ensure the UK&I division is well-placed ahead of the pending Gambling Act Review.