Paddy Power raises earnings expectations after US gamblers splash out in October

Positive outlook comes despite bookmaker taking a hit to profits due to losses at its fantasy sports business, FanDuel

The bookmaker said US gamblers helped boost performance in October (PA)

Paddy Power Betfair has upgraded its full-year profit forecasts as high-rollers from New York splurging $1.5m (£1.1m) a day boosted its performance in the US.

The bookmaker now expects full-year earnings to come in between £465m and £480m - up from between £460m and £480m - following a surge in betting at the Meadowlands Racetrack in New Jersey.

It generated more than $1.5m of stakes per day in October, making it one of the biggest sports betting outlets in the world, the bookmaker said.

Approximately 30 per cent of all bets booked at the track are estimated to have come from New York residents.

Paddy Power Betfair shares rose as much as 2 per cent in Friday's session.

However, the firm saw group profit knocked in the third quarter after booking losses at its fantasy sports business in the US, FanDuel.

The bookmaker saw underlying earnings slip 16 per cent to £101m in the three months to 30 September, or 15 per cent down on a constant currency basis.

Revenue grew 10 per cent year on year, or 12 per cent in constant currency, to £483 million.

Sales were driven by online, which saw a 15 per cent jump in revenue. But its high street outlets in the UK suffered a 1 per cent decline and fell by 6 per cent in Ireland.

Paddy Power Betfair chief executive Peter Jackson said: "Quarter three was a good quarter for the group. In Europe, the encouraging momentum that we saw in quarter two accelerated further, with online revenue up 15 per cent.

"This momentum, which was evident in both Paddy Power and Betfair, is driven by enhancements in product and good execution in promotions and marketing.

"In the US, the exciting potential of the sports betting opportunity and the strength of our strategic positioning has been evidenced by our experience to date in New Jersey."

In the UK, bookies have also been warning about the impact of a recent Government move to slash stakes on fixed-odds betting terminals.

Paddy Power said the new £2 stake limit would result in a 33 per cent to 43 per cent decrease in machine gaming revenue, or £36m to £46m revenue impact.

PA