Flutter Entertainment, a leading global sports betting, gaming, and entertainment operator, has revised its financial outlook for 2024 after reporting unfavourable results in the US sports betting market during November and December. The downturn in performance was primarily driven by NFL parlay and Same Game Parlay outcomes, which had an adverse effect on the company’s revenue projections. The revised outlook reveals a $370 million reduction in expected US revenue, bringing the new estimate to $5.78 billion, while adjusted EBITDA is now projected to be $505 million, a decrease of $205 million.

Flutter Entertainment Revises 2024 Financial Outlook Amid Unfavourable US Sports Betting Results

Key Factors Behind Flutter’s Revised Financial Forecast

Flutter Entertainment’s revised forecast is attributed to several factors within the US sports betting landscape that negatively impacted its performance. One of the primary causes for the revision was the highest rate of favourites winning in nearly two decades. This resulted in a gross gaming revenue (GGR) impact of $438 million, which significantly affected the company’s revenue generation in the region. Despite these setbacks, Flutter remains confident about its long-term growth prospects, emphasizing that this short-term decline does not alter its broader market trajectory.

Unfavourable US Sports Results

The NFL parlay and Same Game Parlay outcomes in November and December 2024 were instrumental in Flutter’s reduced earnings. Parlay betting, which allows players to combine multiple bets into one, experienced outcomes that were more predictable than usual, leading to the favourites winning at an exceptionally high rate. The effect of these outcomes was significant enough to reduce Flutter’s US sports betting revenue projections for Q4 2024 to $1.59 billion, with adjusted EBITDA now forecasted at $161 million.

In terms of margins, the impact of these results led to a reduction of 390 basis points, a more significant drop compared to the 240 basis points seen in Q4 2023. Despite these unfavourable outcomes, the company made strategic adjustments to mitigate losses, including reducing promotional spending by 20 basis points.

Flutter’s Strong Performance Outside the US Market

While US market performance has been below expectations, Flutter has reported better-than-expected results in markets outside the US, particularly in the UK and Ireland. This performance has been driven by favourable English Premier League (EPL) outcomes, which boosted the company’s overall financial standing. As a result, Flutter anticipates revenue and adjusted EBITDA in the UK and Ireland to exceed previous forecasts by 1% and 2%, respectively.

The UK and Ireland Markets’ Contribution

Flutter’s operations in the UK and Ireland have continued to grow, with the company benefitting from its strong brand presence in these regions. The English Premier League’s success played a key role in supporting sports betting revenue, while Flutter’s ability to tap into high-margin sports offerings helped improve margins in these markets. This favorable performance is expected to offset some of the negative impacts from the US, providing a buffer to the company’s overall financial outlook for 2024.

Stability in Core Structural Revenue Margin

Despite the volatility in the US market, Flutter noted that its core structural revenue margin remained stable at 14.5%. This is a year-on-year increase of 100 basis points, showcasing the company’s ability to maintain operational stability despite fluctuations in its sports betting outcomes. The stable revenue margin is supported by FanDuel’s parlay offerings and a higher-margin sports mix, both of which have contributed to maintaining a consistent revenue flow.

Strategic Developments and Long-Term Outlook

Flutter’s revised financial outlook comes on the heels of significant strategic developments, which include organizational changes and a shift in the company’s listing to the New York Stock Exchange. These moves reflect Flutter’s commitment to growing its US presence and leveraging its existing infrastructure to capitalize on the expanding sports betting market.

Appointment of Kevin Harrington as CEO for UK and Ireland

In November 2024, Flutter appointed Kevin Harrington as CEO for its UK and Ireland division, succeeding Ian Brown. This leadership change is part of a broader organizational restructure aimed at consolidating Flutter’s international operations outside the US. By streamlining its internal structure and focusing on key markets, Flutter aims to enhance operational efficiency and better navigate the challenges posed by fluctuations in sports betting outcomes.

Focus on US Growth

As Flutter transitions to a more prominent presence in the US, where revenue accounted for 38.5% of its Q3 total, it is prioritizing growth in the North American sports betting market. The company’s focus on fan engagement, expanding sports offerings, and enhancing customer experience will be crucial in sustaining revenue growth moving forward.

Long-Term Growth Expectations

Despite the challenges faced in the US sports betting market in late 2024, Flutter Entertainment remains optimistic about its long-term growth trajectory. The company continues to invest in technology and innovation, focusing on improving its product offerings and maintaining a competitive edge in an increasingly crowded market. Flutter’s confidence in its growth drivers, such as the strength of FanDuel, technological advancements, and operational efficiencies, underpins its forecast for continued growth in 2025 and beyond.

Optimism for Global Expansion

Looking ahead, Flutter is confident in its global expansion efforts and the continued success of its diverse portfolio of brands. The company’s multi-market strategy is designed to mitigate risks associated with individual markets and ensure that Flutter remains well-positioned for long-term success. By focusing on diversified revenue streams and maintaining operational flexibility, Flutter is poised to capitalize on new opportunities in both established and emerging markets.

Conclusion: The Financial Outlook

Flutter Entertainment’s revised 2024 financial outlook reflects a temporary setback in the US sports betting market, driven by unfavourable outcomes in NFL parlay and Same Game Parlay bets. However, the company’s overall financial health remains strong, bolstered by better-than-expected performance outside the US and stable core revenue margins. Flutter’s strategic focus on US growth and organizational restructuring indicates a promising path forward, with the company maintaining its long-term growth expectations.

FAQs About Flutter Entertainment’s 2024 Financial Outlook Revision

1. Why did Flutter Entertainment revise its financial outlook for 2024?

Flutter revised its 2024 financial outlook due to unfavourable sports betting results in the US, particularly driven by NFL parlay and Same Game Parlay outcomes, which significantly impacted their revenue projections.

2. How much did Flutter Entertainment reduce its expected US revenue for 2024?

Flutter reduced its US revenue expectations by approximately $370 million, bringing the new estimate to $5.78 billion.

3. What caused the decline in Flutter’s US revenue projections?

The decline in revenue was largely due to the highest rate of favourites winning in nearly two decades, leading to an estimated gross gaming revenue (GGR) impact of $438 million.

4. What are the revised projections for Flutter’s US revenue and Adjusted EBITDA in Q4 2024?

For Q4 2024, Flutter now projects US revenue at $1.59 billion and Adjusted EBITDA at $161 million.

5. How did the outcome of NFL games impact Flutter’s financials?

The outcome of NFL parlay and Same Game Parlay bets in November and December 2024 led to a higher-than-usual rate of favourites winning, which negatively impacted Flutter’s sports betting revenues and margins.

6. Did Flutter’s performance outside the US market also decline?

No, Flutter reported better-than-expected performance in the UK and Ireland markets, largely driven by favourable outcomes in the English Premier League, which boosted revenue and Adjusted EBITDA.

7. How did Flutter maintain stability in its core structural revenue margin despite setbacks?

Flutter maintained its core structural revenue margin at 14.5%, showing a year-on-year increase of 100 basis points, thanks to FanDuel’s parlay offerings and a higher-margin sports mix.

8. Who did Flutter appoint as CEO for the UK and Ireland division?

Flutter appointed Kevin Harrington as the new CEO for its UK and Ireland division, following an organizational restructure. Harrington succeeded Ian Brown in November 2024.

9. What is Flutter’s focus as it shifts to a more prominent presence in the US market?

Flutter is focusing on expanding its operations in the US, where revenue accounted for 38.5% of its total in Q3 2024, with an emphasis on fan engagement, expanding sports offerings, and enhancing customer experience.

10. How does Flutter Entertainment view its long-term growth despite the current setbacks?

Flutter Entertainment maintains confidence in its long-term growth expectations, citing strong growth drivers such as FanDuel, ongoing technological innovation, and operational efficiencies to drive continued success.

11. Has Flutter Entertainment made any changes in its strategic direction?

Yes, Flutter made key strategic moves, including its listing switch to the New York Stock Exchange and leadership changes, such as the appointment of Kevin Harrington as CEO for the UK and Ireland division to better align with its US growth strategy.

12. How is Flutter addressing the impact of unfavourable sports results on margins?

Flutter mitigated the margin impact by reducing promotional spending by 20 basis points, and despite the 390 basis point decline in Q4 2024, the company is confident in its ability to manage margins going forward.