Paddy Power owner Flutter enjoys 'excellent' start to the year

Flutter Entertainment may soon be calling the US home but there are still issues to deal with on this side of the Atlantic with chief executive Peter Jackson hopeful that the UK government is listening to concerns and that officials in Ireland will follow suit.

Jackson was speaking as the parent company of Paddy Power and Sky Bet said it had enjoyed an "excellent" start to 2024 after it released its financial results for the first quarter of the year on Tuesday morning.

That was despite unfavourable sports results in March in the US, where the company has moved its operational headquarters in anticipation of moving its primary listing to the New York stock exchange from the London equivalent at the end of this month.

Regulatory issues remain in the UK, where the Gambling Commission published its response to its consultation on financial risk checks at the start of May, while the industry issued a voluntary code to bring uniformity to the current regime as the pilot of the promised frictionless checks is carried out, starting in August.

Jackson said: "If we look at the voluntary code for customer checks I think it is a sensible step forward as we transition towards the financial risk checks that were in the Gambling Act review last year.

"We've said many times that we are supportive of the white paper and glad to see progress is being made in the key areas of financial risk and vulnerability.

"It appears to me that the government is listening and is trying to implement the changes in a way that will protect the few without impacting the many. It seems to be playing out in as good a way as we could have hoped for but let's see what happens in the months ahead."

Ireland's Gambling Regulation Bill continues its progress through the legislative process including a ban on gambling advertising between 5.30am and 9pm which has led Racing TV and Sky Sports Racing to warn their businesses will no longer be viable in Ireland as a result.

Jackson said: "In general we are very supportive of the Gambling Regulation Bill but there are a small number of very specific areas which we think will have serious unintended consequences.

"Anyone who was at Cheltenham knows how important horseracing is for Ireland. It is a massive part of the economy so I don't quite understand what they are doing and what their intentions are around advertising. We are working very hard to try and put the issues to the appropriate people in Ireland and we hope we will get to a sensible outcome."

Overall Jackson said the company had enjoyed an "excellent start to the year", with US arm FanDuel recording "strong growth" in earnings and market share gains.

Flutter's revenue for the quarter was $3.4 billion (£2.7bn/€3.15bn), up 16 per cent, while adjusted earnings rose 46 per cent to $514 million.

FanDuel recorded revenue growth of 32 per cent for the quarter but that would have been even greater but for a swing in results in the March Madness college basketball tournament from which the company took a $76m hit.

In the UK and Ireland revenue increased by 17 per cent, "primarily driven by iGaming", although Jackson said the company had taken "significant" market share during the Cheltenham Festival.

He said the festival had been a meeting of two halves, adding: "We were slightly disappointed with some of the field sizes early on in the festival but it ended up getting good momentum, it finished well and there was good racing and I was really pleased with how our brands performed. We definitely took share during the festival."

Flutter shareholders this month voted for the company to move its primary listing from London to the New York Stock Exchange.

Jackson added: "With a greater proportion of the group’s future profits expected to be generated in the US, we have moved our operational headquarters to New York reflecting the importance of the US sports betting and iGaming market to our business."

David Brohan, gaming and leisure analyst with stockbrokers Goodbody, said there were "pros and cons" in Flutter's update, but added: "Flutter continues to be the best-in-class operator, and the upcoming primary listing should act as a positive catalyst."

Nevertheless, the company's share price had dipped nearly two per cent to 15,875p by Tuesday lunchtime.