Flutter Entertainment, owner of Paddy Power and FanDuel, announced a substantial decline in anticipated revenue and earnings due to an unusually high number of favored teams winning in the recent NFL season. The company's warning reflects a significant impact on its US sports betting operations.
The company cited the "most customer-friendly" NFL season since the launch of online sports betting as a primary factor. The unusually high win rate of favored teams, particularly in the final quarter of 2024, is estimated to have directly impacted Flutter's financial performance. Specifically, a single game on December 30th, where the Detroit Lions defeated the San Francisco 49ers, is projected to have cost the company approximately $74 million USD.
Flutter's revised outlook projects a $390 million reduction in revenue and a $260 million decrease in underlying earnings between November 12 and December 31. Gross gaming revenue, a key metric reflecting wagering activity, is expected to decrease by $438 million over the same period.
Furthermore, Flutter reduced its revenue forecast for its US business in 2024 to approximately $5.78 billion, a reduction of $370 million from previous guidance. Similarly, underlying US earnings are now projected to be $205 million lower than the previously predicted $505 million.
Despite these challenges in the US market, Flutter reported positive momentum in the UK and Ireland. Favorable sports results in those regions are projected to offset some of the losses from the US, resulting in 1% and 2% increases in revenue and underlying earnings, respectively.
Flutter's share price fell by 3% in response to the earnings announcement.
