Paddy Power owner Flutter reaches US profitability

The company has invested billions of pounds in the US since buying FanDuel in 2018.

The Paddy Power owner has bet heavily on the US in recent years. (Nigel French/PA) (PA Archive)

The company behind Paddy Power and Betfair was profitable in the US in the first six months of the year as it added millions of customers in preparation for a New York listing.

Flutter Entertainment chief executive Peter Jackson said the US performance had been “exceptional” and turned an operating loss before depreciation and amortisation (Ebitda) of £132 million into a profit of £49 million.

The business also performed well in the US online gambling industry – iGaming in industry jargon – taking market share from its competitors.

“The US delivered another exceptional performance,” Mr Jackson said.

“We acquired over two million new players in the period, cemented our leadership position in sports and grew our share in iGaming to 23%.

“The US business was profitable in the first half with FanDuel generating over 100 million dollars (£78 million) in Ebitda.

“This profit profile provides us with a clear platform to invest materially in the second half, as we strive to continuously improve our customer offering.”

Flutter bought FanDuel in two rounds. It paid 158 million dollars (£124 million today) in 2018 for a 58% stake in the business, taking a gamble that US regulations would soon allow it to capture the market.

Three years later it upped its stake to 95%, which cost it 4.2 billion dollars (£3.3 billion today).

Flutter has invested heavily in its bid to capture a big share in the growing US market, which is rapidly opening up.

This meant it took years for Flutter to hit profitability in the US. It had previously said that profits might start coming through in 2023, which looks borne out by Wednesday’s results.

The increased focus on the US has tipped Flutter to plan a listing in the US. Expected later this year or early next year, it would be alongside the UK listing, but it has also sparked speculation that Flutter might abandon London.

“The first half of 2023 marks a pivotal moment for the group, with our US business now at a profitability inflection point, helping transform the earnings profile of the group and significantly enhance our financial flexibility,” Mr Jackson said.

Flutter said it grew UK and Ireland revenue by 13% in the six months to the end of June.

Overall revenue across the company was to £4.8 billion, up 42% on the year, while the company swung from a pre-tax loss of £112 million last year to a £128 profit in the first six months of 2023.