The big question now: will rival DraftKings follow suit, and could this become an industry standard?

Flutter Responds to Illinois Tax Hike

The FanDuel announcement comes as no surprise to many. On May 31, the Illinois legislature passed a new tax hike on every bet made in the state. Under the new tax, operators will pay 25 cents for every bet placed on their platforms up to the first 20 million bets. After that threshold, the tax increases to 50 cents per bet.

The 50-cent tax directly applies to FanDuel, the sports betting market leader in the US. While Illinois lawmakers believe that large corporations like FanDuel and DraftKings can afford the increase, the company doesn’t share their view.

In a press release, Peter Jackson, CEO of FanDuel’s parent company, Flutter, said:

“It is important to recognize that there is an optimal level for gaming tax rates that enables operators to provide the best experience for customers, maximize market growth, and maximize revenue for states over time.”

Flutter stressed that this is the second tax hike in a year in Illinois. In 2024, FanDuel’s tax rose from 15% to 40%. The company emphasized that at the time, it made “extensive efforts” to absorb the cost without affecting its customers.

Flutter highlights that if Illinois decides to reverse its decision on the new tax, FanDuel will immediately remove the surcharge.

Flutter Investors Shrug Off The Surcharge News

After the Illinois tax news, Flutter’s stock dipped 2%, but investors seem to have welcomed FanDuel’s bold move. After the announcement, the stock closed on Tuesday up 1.5% at $267.52.

The rebound suggests that investors view FanDuel’s decision to pass the tax on to customers as a pragmatic and disciplined move, rather than a sign of financial weakness.

Analysts estimated that the new tax hike in Illinois would reduce Flutter’s US profits by $74 million annually. However, the surcharge announcement appears to have reassured investors that Flutter will protect margins.

In addition, Flutter reiterated that it expects to grow its group-wide profit by 35% to $3.18 billion, maintaining its forecasts. That news likely increased investor confidence as well.

Flutter’s move is also gaining approval from analysts. A consensus of 22 analysts suggests a one-year stock price target of around $300, implying a 12% increase from the current price. Twenty-one brokerage firms maintain an “outperform” rating for the company.

Meanwhile, gambling industry consultant and analyst Steve Ruddock sees the surcharge as a positive move for the company:

“FanDuel is doing the right thing by transparently showing its customers the cost and its source. Like a mom-and-pop store charging a credit card transaction fee, or a restaurant highlighting the meal tax on the receipt rather than raising menu items, transparency is always good.”

DraftKings Weighs Its Options

FanDuel’s main rival, DraftKings, experienced a 2.6% stock rise on Tuesday. That reflects optimism that the operator might avoid adding a surcharge, at least in the short term.

So far, DraftKings has been cautious. In an emailed statement, the company said that it “anticipates taking action and expects to share more information soon.”

But many analysts think a surcharge is inevitable. Jefferies analyst David Katz expects DraftKings to follow FanDuel’s decision:

“Given the structure of the tax, a surcharge is the most direct cost offset, and we view the move as a modest positive for the shares of the operators.”

Katz doesn’t expect either company to lose market share to smaller operators, which could also impose a surcharge. Combined, FanDuel and DraftKings take about 75% of the Illinois sports betting market.

Citizens’ gaming analyst estimates that the new surcharge will result in $79 million in new 2026 revenue for DraftKings (if it implements it), or 5.4% of its projected EBITDA. Meanwhile, FanDuel will generate $86 million, or approximately 2% of its 2026 EBITDA.

Could Per-Bet Surcharges Spread Nationwide?

FanDuel’s surcharge could be a turning point in the US sports betting industry. Once taboo, passing tax costs to consumers could become a standard practice for operators to resist tax hikes.

BMO Capital Markets analyst Brian Pitz said that Flutter’s move illustrates how operators might respond to regulation:

“New fees on every bet could drive users to leverage illegal operators who won’t add a fee (because they don’t pay state taxes), and are thus unaffected by the new IL per-bet tax.”

The risk of driving consumers to illegal offshore platforms is a concern of the industry. The Sports Betting Alliance, a trade group representing FanDuel, DraftKings, and other prominent operators, has repeatedly warned lawmakers that aggressive tax policies could drive consumers to illegal sites.

Illinois’ new policy could become a case study for other state legislatures. In response, operators will likely adopt a clear message: “If lawmakers impose per-bet taxes, expect us to pass them on to voters directly.”

FanDuel and its peers could use this weapon against tax hike proposals elsewhere. For example, Louisiana recently passed a bill that more than doubles the tax on sports betting.

Ohio is another state on the radar. An active bill in the Buckeye State proposes adding a 2% tax on total wagers placed in the state, in addition to the existing 20% tax on revenue (which was already doubled once, and there have been proposals for another increase).

Other examples include New York and Pennsylvania, which heavily tax operators.

Normalizing Consumer Fees?

However, while some industry observers warn of a consumer backlash, others believe the move is part of a broader pricing evolution.

Ruddock observes: “We live in a world where new fees or price increases occur frequently, including streaming subscriptions, ATM fees, and delivery charges, to name a few.”

He adds that it won’t have a significant impact on the consumer:

“This will have a near-zero impact on casual bettors. Casual bettors don’t go broke. They don’t have a bankroll that gets reduced to zero. They have jobs and dedicate a certain amount of their disposable income to betting. The only difference is that instead of betting $10 or $50 per week, they now bet $12.50 or $55.00 per week.”

Given the popularity of small wager parlays with potentially high returns, Illinois bettors may also simply absorb the impact themselves, given that multi-game wagers are often purely for entertainment purposes and to provide interest in a busy sporting calendar.

Déjà Vu: DraftKings Tried This First

FanDuel’s surcharge announcement is not a new idea. Ironically, the operator is doing what DraftKings tried and abandoned last year.

In 2024, facing Illinois’ first tax hike (from 15% to 40%), DraftKings announced plans to add a surcharge on winning bets in states with high tax rates of 20% or higher, such as New York, Pennsylvania, Illinois, and Vermont.

However, the plan was short-lived. Factors such as customer backlash, rejection by competitors (including FanDuel), and adverse analyst reaction forced DraftKings to back out of the plan.

Now, with even higher taxes in Illinois, FanDuel has flipped its stance. While it’s likely to follow, DraftKings might wait and watch closely if FanDuel receives similar backlash.

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United Kingdom-based Flutter merged its US business with FanDuel in 2018 and increased its stake to 95% in 2020, which left Boyd with a minority share.

Meanwhile, after a lengthy legal battle, Fox Corporation retains an option to acquire up to an 18.6% stake in FanDuel by 2030 at a $4.5 billion valuation.

Flutter Expects $65M Annual Savings

The 5% acquisition will include $1.55 billion for equity and $205 million for commercial-term adjustments.

Flutter and Boyd will extend their collaboration partnership through 2038, revising market-access agreements in several states, including Iowa, Indiana, Kansas, Louisiana, and Pennsylvania. For these states, Boyd will receive a fixed fee.

Flutter anticipates that with the adjusted agreements in those states, it will be able to save $65 million annually, starting July 1, 2025. Although the company expects leverage to increase temporarily, it remains committed to its target debt-to-EBITDA ratio of 2.0-2.5x.

Beyond cost efficiencies, securing 100% ownership of FanDuel, which the company claims holds the top spot in sports betting and iGaming, gives Flutter complete control over one of its most important assets.

This will allow the company to simplify its corporate structure, streamline decision-making, and fully consolidate FanDuel’s financial results. At the same time, the acquisition removes potential future tensions with minority interests and profit-sharing.

Furthermore, the acquisition also supports Flutter’s broader strategy of improving margins and responding to global cost pressures. Recently, the company announced job cuts in the UK and a $875 million share buyback program to optimize its capital structure.

Additionally, to protect margins, the company announced that FanDuel will introduce a surcharge of $0.50 per bet in Illinois as a response to recent tax hikes in the state.

The transaction is expected to close in the third quarter of 2025, pending regulatory approvals.

FanDuel Dominates U.S. Sports Betting

Owning 100% of FanDuel is also significant for Flutter as the operator dominates the US sports betting market.

In its announcement, Flutter claims the platform holds 43% market share in sports betting across the US. That figure is supported by an H2 Gambling Capital (via Reuters) report.

H2 Gambling Capital estimates FanDuel’s market share to be 44%, with a lead of 10% over rival DraftKings.

The latest state-level revenue data further highlights FanDuel’s dominance in major sports betting markets:

• New York: 44% market share, ahead of DraftKings’ 34%.
• New Jersey: 45% vs. DraftKings’ 29%.
• Ohio: 33.9%, narrowly ahead of DraftKings’ 30.4%.
• Illinois: 37% vs. 30% for DraftKings.
• Michigan: 46.5% vs. 26% for DraftKings.

FanDuel’s in a Tight Race for Top iGaming Spot

While it’s not as dominant in iGaming as in sports betting, FanDuel still claims it holds the top spot in a tightly contested battle with DraftKings and BetMGM.

However, the figure of 27% that it quotes in its Boyd Gaming announcement includes market share for PokerStars, which Flutter also owns.

In New Jersey, FanDuel Casino holds the top spot with a 22.1% market share. DraftKings trails closely with19.4%, while BetMGM took 13.2%.

In Michigan, FanDuel and BetMGM have traded the top position throughout 2025. BetMGM took the top spot in May, while the previous month, FanDuel was the winner.

The difference between the two in total revenue in 2025 is less than $2 million. For context, both operators generated over $67 million in May alone.

Pennsylvania does not report revenue by each operator individually but by retail casinos, which hold the licenses.

The latest figures show that Hollywood Penn National casino, under which DraftKings, BetMGM, Fanatics, and Hollywood Casino operate, had a 37.3% market share. Meanwhile, Valley Forge, the license partner of FanDuel and Stardust, had a 22.1% share.

Given Stardust’s minimal footprint in New Jersey, FanDuel likely holds around a 20% share in the state. That will likely put it either slightly ahead or close behind one of DraftKings or BetMGM (based on Hollywood Casino and Fanatics’ performance in other states).

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In emails sent to customers, Flutter said that it had informed Betfair and other platforms that the breach was limited to basic betting account details.

These include clients’ usernames, email addresses, and limited contact information, “including customers’ names and the first lines of their addresses and city.”

Hackers have also gained access to details of “some” recent activity on customer accounts, as well as device ID and IP addresses.

However, Flutter said that no customer passwords, ID documents, or “usable card or payment details” were affected.

Paddy Power, Betfair Data Breach: Customers Warned to ‘Be Wary’

The firm said: “We are not aware that any of your personal information involved in this incident has been misused. However, if certain types of your personal information were accessed, then there is a risk that criminals may use this information to conduct phishing against you or attempt to impersonate you.”

Flutter added that it was “not aware” that hackers had misused any personal information. However, it warned customers to remain vigilant.

The Racing Post quoted a Flutter spokesperson as saying: “We can confirm that our Paddy Power and Betfair businesses have suffered a data incident involving personal information for some of our customers.”

Flutter Launches Hack Probe

The gambling operator stated that it has discussed the matter with relevant regulators and authorities.

It has launched a full investigation into the breach with the support of external IT security experts.

The operator is looking to discover how the hackers were able to infiltrate its security network.

It also resolved to “better protect our networks and customers.” Flutter also claims to have resolved the unauthorized access issue.

Flutter said it was in the process of informing all affected customers that their data had been compromised.

The NYSE-listed operator has reportedly told both the Gambling Commission and the Information Commissioner’s Office about the security breach.

Hack Follows Cuts in Tech and Product Teams

Last month, Flutter announced 250 job cuts, predominantly in its Leeds, UK office. 

The job losses are predominantly in the company’s technology and product teams as Flutter seeks to consolidate multiple brands.

“As part of a broader strategy to bring some of our brands onto a single tech platform – and against the backdrop of increasing cost and regulatory pressure – we have entered into consultation with a number of colleagues,” a company spokesperson told the Yorkshire Post.

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GVC Holdings

Tessa Curtis has been appointed to the newly created role of head of media relations at GVC Holdings, ahead of officially joining the firm on September 1.

In the role, Curtis will be responsible for all corporate communications for the group across the UK and international markets, and will report to both Grainne Hurst, group corporate affairs director, and David Lloyd-Seed, director of investor relations and external communications.

Hurst commented: “Tessa’s appointment will help GVC to amplify its ambitions, values and unique competitive advantages as the company continues to strengthen and build its core team.

“She will join both the expanding corporate affairs and investor relations teams at GVC, and will work closely with Jay Dossetter, who has recently been promoted to head of ESG and press office.”

Golden Matrix

Golden Matrix, a developer and licenser of social gaming platforms, systems and content, has appointed Aaron Richard Johnston to the company’s board of directors, effective immediately.

Lauded as bringing “vast commercial and operational experience,” Johnston currently holds remote gaming licenses for the UK and Ireland, and has a personal management licence with the UK Gambling Commission.

“We are thrilled to expand the board of directors with Aaron’s appointment,” stated Golden Matrix CEO Brian Goodman. “As a result of his extensive experience and success with some of the world’s most successful gaming enterprises, Aaron will be instrumental in helping Golden Matrix grow and evolve into a major gaming company operating in multiple vertical markets.

“Aaron’s addition to the board is also another important step in preparing the company for its uplisting to NASDAQ.”

Gaming Laboratories International

Gaming industry testing house Gaming Laboratories International has promoted Karen Sierra-Hughes to vice president of Latin America and Caribbean.

Sierra-Hughes has been with GLI since 2004, driving the firm’s strategy for both regulatory and business development throughout the Latin America and Caribbean region.

Prior to joining GLI she practised law in the Republic of Panama and was later appointed legal director of the Panama Gaming Control Board.

“We are thrilled to announce Karen’s promotion and signalling our absolute commitment to the gaming industry’s success throughout Latin America and the Caribbean in all its forms – land-based, lottery, and online,” said GLI President and CEO James Maida.

“Karen has been an integral part of GLI’s mission in Latin America and the Caribbean. She and her team work in close collaboration with government officials – as well as gaming and lottery suppliers and operators – helping them navigate the future of gaming.

“Their expertise supports these stakeholders’ efforts in establishing well-regulated environments and a successful and sustainable industry. Karen’s leadership, knowledge and passion for her client’s success translates into the appreciation that the industry and her team have for what she does.”

Flutter Entertainment

Flutter Entertainment has announced that Rafi Ashkenazi has stepped down as a non-executive director of the group with immediate effect.

Ashkenazi initially joined The Stars Group in January 2013 and served as the CEO from March 2016 up until the completion of the combination of TSG and Flutter on 5 May 2020, after which he continued on the board of the latter as a non-executive director.

Gary McGann, chair of Flutter, said: “I wish to take this opportunity to acknowledge the major contribution of Rafi in creating the exceptional business that is TSG.

“Rafi has made a significant impact on TSG during his seven-year tenure and was instrumental in transforming TSG from a single product operator to a diverse global leader with multiple product offerings. We wish him well for the future”.

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In its second year, the initiative has once again seen the operator donate £1,000 to Prostate Cancer UK for every maximum score at the world championship, which concluded last Friday night when Luke Littler defeated Michael van Gerwen by seven sets to three.

In total, 907 maximums were thrown during the tournament, with Littler throwing the most with 76, followed by van Gerwen with 56 and Callan Rydz with 43.

Paddy Power also pledged £60,000 to the charity for each nine-dart finish at the event, of which two were recorded by Christian Kist and Damon Heta. This brought the total amount donated to Prostate Cancer UK through ‘The Bigger 180’ campaign to £1.027m.

Jack Wilson, Head of Content at Paddy Power, said to SBC News: “We offered a £180,000 bonus for every nine-darter – shared between player, fan and Prostate Cancer UK – while once again we committed to donating £1,000 for every 180. 

“Thanks to the sharp-shooting of Damon Heta and Christian Kist, two fans went away £60,000 richer and another £120,000 was put into a cheque for Prostate Cancer UK.

“All in all, Paddy Power donated £1,027,000 to the charity, which will help fund the TRANSFORM trial. 

“Prostate cancer affects 1 in 8 men and TRANSFORM will find the best way to test for prostate cancer, so we can be sure which is the most effective method for a nationwide screening programme that could save thousands of lives every year.”

Paddy Power’s ‘The Bigger 180’ campaign ambassador was Sir Chris Hoy, who also presented the Ballon d’Art trophy to Littler for hitting the most 180s during the tournament.

Sky Sports also joined forces with Paddy Power to help raise awareness by asking men to check their risk of prostate cancer.

Wilson noted: “We also joined forces with Sky Sports to call on 180,000 men to check their risk for prostate cancer. More than 150,000 have done so so far – and with Sir Chris Hoy leading the calls as a campaign ambassador, that number continues to rapidly rise.”

Hoy said via the Prostate Cancer UK website: “The huge sum being donated will make a big difference to the lives of thousands of men. It’s a huge step forward and we’re now one big step closer to making a long-lasting and meaningful change to men’s health.

“The TRANSFORM trial aims to find the best way to test men for prostate cancer, so we can be sure which is the most effective method for a nationwide screening programme that could save thousands of lives every year. This massive cash injection can have an impact on men’s lives for years to come.”

Chiara De Biase, Director of Health Services, Equity & Improvement at Prostate Cancer UK, stated: “Every 180 thrown, every cheer from fans and every pound raised has brought us closer to a future where all men can be screened for prostate cancer.

“With £1,027,000 raised and thousands of men taking our online Risk Checker, this campaign has delivered a remarkable impact. As well as the sensational fundraising, we’re proud that more than 143,000 men have completed our online Risk Checker – making this a truly life-changing campaign.”

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The Malta-based slot studio will gain increased visibility across the two nations by integrating games into the Flutter-owned operator’s online casino platform. Hacksaw Gaming praised the Sky brand as “an industry titan”. 

Marcus Cordes, CEO of Hacksaw Gaming, praised the deal, stating: “We’re incredibly proud to welcome Sky, an industry titan, to our growing roster of partners. Sky’s reputation for excellence speaks for itself, and we’re confident their players will embrace our cutting-edge content and distinctive style.”

As a result of the collaboration, Hacksaw Gaming slot releases such as Wanted Dead or a Wild, Chaos Crew 2 and Le Bandit will reach further players across the UK and Ireland, providing the studio with growth in one of Europe’s legacy markets. 

Additionally, the partners have already confirmed that plans are underway to add Hacksaw Gaming’s roster of Dare2Win instant games to Sky’s UK&I offering in the future. 

Joseph Williams, Content Manager for Sky Betting & Gaming, added: “We’re elated about this new collaboration and can’t wait to see what the future holds. With a partner as innovative and renowned as Hacksaw Gaming, we’re confident our players will love the exciting variety these games bring to our platform.”

The move adds to a busy period of European expansion for Hacksaw Gaming after the studio entered the Swiss market for the first time last month in partnerships with Grand Casino Baden and Gamanza Group. 

Following that deal, Cordes explained: “Our collaboration with Gamanza Group AG and Grand Casino Baden is a significant first step into Switzerland. It allows us to showcase our innovative games to a new audience and aligns perfectly with our global mission of delivering high-quality content.”

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Under the terms of the partnership, Betfair has agreed to host the supplier’s full roster of proprietary slot releases on its Italian online casino platform, in addition to the studio’s portfolio of aggregated content sourced from several supplier partners – the Game Aggregator System. 

Thomas Smallwood, Chief Commercial Officer at ESA Gaming, stated: “Partnering with a major Flutter brand is an exciting moment for us as we further consolidate our position as a leading aggregator and supplier in Italy.

“With a wealth of top-performing content, it’s another milestone deal for us and we look forward to working closely together.”

The deal will see ESA Gaming gain increased visibility for its own slot content in the nation, boosting the Italian presence of slots such as Chicken Bonanza and Santastic 4.

Meanwhile, several other suppliers will also gain exposure in Italy as ESA Gaming’s GAS offering becomes integrated into Betfair’s platform.

The aggregated offering includes titles from over 70 suppliers that have partnered with ESA Gaming, including Leap Gaming and Wazdan. 

ESA Gaming recently joined forces with Blueprint Gaming to strengthen its third-party content offering, adding the studio’s slot in a deal praised as “another important milestone”. 

Smallwood explained: “Blueprint Gaming has a wealth of top-performing slot content, and we’re delighted to add it to our aggregation platform.

“GAS has gone from strength to strength over the last 12 months, and we’re confident that this will be yet another important milestone in its growth as a business vertical for us.”

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Through the agreement, Realistic Games’ entire portfolio of slots, instant win and table games has been made available on Flutter’s Paddy Power and Betfair brands in the UK and Ireland.

Titles available on the Paddy Power and Betfair online casino platforms include Book of Charms as well as Chicken or the Egg, with the content developer stating that the remainder of its content is set to follow.

Commenting on the deal, Amy Brewis, Head of Account Management at Realistic Games, said: “By partnering with Flutter UK & Ireland, a major name in the region, we are further cementing our presence within our core domestic market.

“This collaboration aligns with our ongoing strategy to expand our game portfolio and deliver more exciting titles to our players and given Flutter UK & Ireland’s trademark reputation for entertainment and fun, it couldn’t be a more appropriate alliance.”

Alongside Flutter, Realistic Games has secured partnerships with several other igaming operators across European markets over the past 12 months. 

At the beginning of the year, the content developer reached an agreement to provide online casino titles to LeoVegas’ BetMGM brand in the UK market.

In October, Realistic Games expanded its presence in the Netherlands, as the content developer also agreed to provide its portfolio of slots to Betsson’s Dutch brand Goldrun Casino.

Flutter also posted its third quarter financial results last week, reporting an uptick in total revenue and adjusted EBITDA. Flutter’s Q3 UKI revenue grew by 18% year-over-year to $846m, while igaming revenue increased by 29% YoY to $454m.

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The operator’s new international division, to be run by current International CEO Dan Taylor, will include five regions: UKI, Asia-Pacific (APAC), Southern Europe & Africa (SEA), Central & Eastern Europe (CEE), and Brazil.

The International division will sit alongside Flutter’s business in the US, FanDuel, which is run by Amy Howe.

Due to these changes, PokerStars CEO Kevin Harrington has been announced as the new CEO of Flutter UKI, taking charge of its Sky Betting & Gaming, Paddy Power, Betfair, tombola and PokerStars brands.

“I’m incredibly proud to be given the chance to take over and run a business I first joined more than a decade ago,” commented Harrington.

“I want to continue the work that has made Flutter the clear market leader across the UK and Ireland and maintain the high standards we have set – with responsible gambling at the core of all our work.”

After joining Betfair in 2012, Harrington has been with PokerStars since September 2020, initially as Chief Commercial Officer before becoming CEO in August 2023.

He will now replace the current Flutter UKI CEO, Ian Brown, who is leaving the operator after two years to pursue his own career ambitions.

“The transformation over the last two years has been tremendously exciting,” stated Brown

“I am particularly proud that we have taken a share in a challenging market, investing in customer innovation and our people. Kevin has a deep knowledge of our business, and I am confident he will build on the strong momentum to take Flutter UKI to new heights.

“I would like to say a sincere thank you to Peter and the whole Flutter team for what has been one of the most rewarding experiences of my career.”

Peter Jackson, CEO of Flutter, added: “Ian’s time at Flutter has been enormously successful. He has transformed the UK & Ireland business on almost every metric and he will be a hard act to follow. 

“Kevin’s promotion is very well-deserved and the business will be in safe hands as we embark on the next phase of our growth plan.”

Earlier this month, Flutter posted its Q3 financial results, reporting an uptick in revenue and adjusted EBITDA. The group’s 2024 guidance was also raised by 1% across revenue and adjusted EBITDA, reflecting a strong Q3 group ex-US performance.

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Described as an “excellent” quarter by CEO Peter Jackson, the company’s revenue increased by over 25%, adjusted EBITDA rose by more than 70% and net loss improved by over 50% compared to the same quarter the previous year.

The group’s 2024 guidance was also raised by 1% across revenue and adjusted EBITDA, reflecting a strong Q3 group ex-US performance. However, Flutter also said that “excellent US momentum in Q3 has subsequently been more than offset by unfavourable sports results in Q4 to date”.

Revenue growth improves net loss

Publishing its Q3 results, Flutter declared a 27% year-over-year increase in revenue to $3.25bn (Q3 2023: $2.56bn), while average monthly players (AMPs) grew by 16% to 12.9 million (2023: 11.1 million). Excluding US operations, revenue rose by 15% YoY to $2bn (2023: $1.7bn). 

For the quarter, net loss improved to $114m, up 56% YoY (2023: $262m loss), which the company says was “driven by strong revenue growth”. The net loss “included non-cash impacts of $128m acquired intangibles amortisation charge and $121m fair value loss on Fox Option liability (Q3 2023 $18m gain)”.

Adjusted EBITDA increased by 74% YoY to $450m (2023: $258m) with a margin of 13.9% (2023: 10.1%). Group ex-US adjusted EBITDA rose by 24% to $392m (2023: $313m).

Net cash from operating activities dropped by 48% to $290m (2023: $554m) “primarily due to the impact of derivative settlements in the current and prior year period”. Free cash flow declined by 74% to $112m (2023: $434m).

Jackson commented: “Flutter had an excellent quarter with revenue growth accelerating to 27%, well ahead of market expectations, and increases to our revenue and Adjusted EBITDA guidance for 2024.”

US

In the US, revenue grew by 51% YoY to $1.3bn (2023: $828m) while AMPs rose by 28% to 3.2 million. Flutter noted it had a “strong start to NFL season driven by new product launches and favourable Q3 sports results combined with continued igaming strength”.

Igaming revenue grew by 46% YoY to $368m with AMPs rising by 43%. Flutter stated that its “focus on exclusive content and market-leading generosity continued to drive strong direct casino and cross-sell customer engagement”.

Sportsbook revenue rose by 62% YoY to $822m, “driven by a 36% increase in stakes and a 130 basis point expansion in structural revenue margin to 12.8%” in addition to a positive swing in sports results during the quarter which was mostly reinvested into promotional spend.

Adjusted EBITDA for the US increased to $58m (2023: $55m loss), which Flutter says demonstrates the “ongoing transformation” of its US earnings profile.

Jackson noted: “In the US, we had a fantastic start to the new NFL season with peak wagers per minute already higher than Super Bowl LVII. Our proprietary product offering continued to drive strong parlay penetration as well as a step up in live betting handle.”

UKI 

Outside the US, UKI revenue grew by 18% YoY to $846m (2023: $719m) with AMPs rising by 13% to 4.1 million. Igaming revenue increased by 29% to $454m, which Flutter attributed to “excellent player momentum with AMPs 17% higher driven by the continuous product improvements being delivered across the igaming portfolio and strong cross-sell from sportsbook”.

Sportsbook revenue in the region increased by 9% YoY to $356m, “benefitting from a strong conclusion to the Euros, which accounted for 8% of sportsbook stakes in the quarter”.

UKI adjusted EBITDA increased by 29% YoY to $237m (2023: $184m), “also benefitting from the in-year phasing of Euros sales and marketing spend, with the majority of spend in Q2 to engage and acquire players at the start of the tournament”.

Updating investors during Flutter’s Q3 earnings call, Jackson emphasised that as they enter a new regulatory era in the UK market, the group is “very pleased” about its market share. 

International and Australia

International revenue rose by 15% to $781m (2023: $679m), while AMPs increased by 14% to 4.4 million. Flutter noted that International operations were driven by a “strong performance in Sisal and the addition of MaxBet from January 2024, which contributed revenue of $50m in the quarter”. 

Sportsbook revenue grew by 31% YoY to $160m while igaming revenue increased by 29% to $589m. Adjusted EBITDA rose by 28% to $152m (2023: $119m).

Flutter reported that “constant currency revenue growth in Italy (13%, Sisal Italy online revenue +41%), Turkey (+104%), Georgia (+21%), Armenia (+14%) and Brazil (+10%) remains strong. In India, revenue was 17% lower in Q3 but more than doubled year-over-year in October as Junglee lapped tax changes introduced in October 2023”.

Before the quarter’s close in September, Flutter expanded its International segment further with the acquisition of Snaitech in Italy and NSX Group in Brazil, a Brazilian operator whose brands include Betnacional.

During its earnings call, Flutter also outlined that it is still anticipating the launch of the regulated market in Brazil on 1 January.

Australia revenue (sportsbook only) increased by 12% YoY to $371m (2023: $332m) with AMPs rising by 6% to 1.2 million. The company noted that growth was primarily driven by favourable sports results. Adjusted EBITDA rose by 14% to $72m (2023: $63m).

“Outside of the US, all divisions delivered a strong performance in the quarter as they leveraged the benefits of the Flutter Edge,” said Jackson.

“In UKI, a broader product range across both sports and igaming drove player and revenue growth. 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 been demonstrating encouraging trends.”

2024 guidance update

As a result of its Q3 performance, Flutter has raised its revenue and adjusted EBITDA guidance for 2024 by 1%, reflecting a strong group ex-US performance during the period. However, as previously mentioned, the company noted that momentum in the US has been more than offset by unfavourable sports results during the current quarter.

The improvement implies a 22% YoY increase in group revenue and a 35% increase in adjusted EBITDA at the midpoints. 

Against existing guidance, the US guidance range has fallen at the midpoint by 1% to $6.15bn for revenue and 4% to $710m for adjusted EBITDA. Group ex-US guidance has increased by 3% to $8.2bn for revenue and to $1.82bn for adjusted EBITDA.

Jackson concluded: “On September 25, we hosted our Investor Day where we outlined how we are an ‘and’ business, with opportunities to deploy capital organically and in M&A, such as the Snai and NSX acquisitions, and also in shareholder returns. 

“We believe that the group has exciting growth prospects due to our unparalleled leadership positions across the world, underpinned by access to the Flutter Edge. We expect to have significant capital to deploy over the coming years and I am excited to commence the share repurchase program in Q4.”

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