UK's Biggest Gambling Companies to Report Strong Growth in 2023

Strategic Insights -

The UK's largest betting companies are poised to announce significant growth over the first half of 2023, driven by expansion in the US market. Key players such as Paddy Power owner Flutter Entertainment and Ladbrokes owner Entain are expected to report substantial revenue increases, with Flutter forecasted to deliver earnings of £770 million for the half-year. Despite constraints to growth and profitability in the UK market, both companies have seen strong performance in the US, with Flutter's sportsbook business experiencing a 92% jump in revenues over the first quarter. Analysts predict a slight slowdown in growth for Flutter due to tougher comparisons, but shareholders will be eager to see the company's first profit from its fast-growing US operation.

Key Takeaways:

  • Flutter Entertainment is expected to report a 46% growth in headline revenues over the first quarter, with a 92% jump in the US market driven by the loosening of sports betting rules in some states.
  • Entain, the owner of Ladbrokes, is predicted to reveal a double-digit rise in revenues, despite potential drags from the UK and German markets.
  • The companies' focus on international markets, particularly the US, is driven by steadier trading in the UK market, where growth and profitability are constrained by gambling reforms announced in April.
  • Analysts at Peel Hunt have forecast that Flutter will deliver earnings of £770 million for the half-year, with around £5 million coming from the US.
  • The update comes as Flutter moves closer to its planned joint listing in the US by the final quarter of the year.
  • BetMGM, the joint venture between Entain and MGM, has continued to post strong growth due to the strengthening US market.
  • Matt Britzman, equity analyst at Hargreaves Lansdown, expects growth in the higher-margin online business and signs that consumers are feeling rising pressures on disposable income to be key areas of interest.

Statistics:

  • £770 million: Forecasted earnings for Flutter Entertainment for the half-year.
  • £5 million: Expected earnings from the US operation.
  • 46%: Growth in headline revenues for Flutter Entertainment over the first quarter.
  • 92%: Jump in revenues for Flutter's sportsbook business in the US market over the first quarter.
  • 11%: Growth in revenues for Entain for the first half of the year, as predicted by Peel Hunt.
  • £2.3 billion: Predicted revenues for Entain for the first half of the year.

Sources:

  • "Hopes high for Flutter's results" by Matt Lyn in the Evening Standard, August 7, 2023.
  • "Entain poised for double-digit revenue rise" by James Skinner in The Times, August 8, 2023.
  • "Flutter and Entain expected to report strong growth" by the Financial Times, August 9, 2023.