Flutter Entertainment H1 2020 Report: the potential for growth in the online poker market

In its report for the first half of 2020, the first after the fusion with The Stars Group and PokerStars, Flutter sees the potential for growth in the online poker market

Flutter Entertainment H1 2020 Report: the potential for growth in the online poker market image

Flutter Entertainment H1 2020 Report: the potential for growth in the online poker market

Flutter Entertainment released its first half-year report after completing the merging with the poker giant The Stars Company, of which PokerStars is a major part of. According to Flutter, its half-yearly reported revenues increased by 49% to £1.522 billion from £1.020 billion comparing to the same time last year, however its pre-tax profits plummeted by 70%, from £81m to £24m. But also, its adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) presented in the H1 2020 interim report grew 35%.

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This growth is certainly mostly thanks to the fusion, more specifically, to PokerStars. After May 5, 2020, when Flutter Entertainment absorbed The Stars Group, it became the biggest gambling holding company globally, estimating an annual income of around six billion dollars. It is confirmed to be the world's leader company in gaming and sports betting, accounting for 19% of the market share after the fusion with The Stars Group.

According to the company, Covid-19 caused a disruptive impact in the business starting around the middle of March. It is to be noticed, though, that in the period before such disruption, the gaming revenues had already declined by 3% and the net debt of the company, including TSG, now totals to £2,899m. Despite an under investment in PokerStars, the social aspect of it and the lockdown pushing people to discover new forms of entertainment and online poker being one of those, the daily users average incresead 70%, but after a few weeks of peak the traffic quickly returned to the normal, pre-quarantines and lockdowns levels. "This pattern was similar to that seen at PPB and SBG where average daily gaming actives were up 65% in the second quarter", said the company.

As expected from this period, while the poker and casino businesses exploded in popularity from people trying to find fun while staying at home, the changes and cancellations in the sports calendar really hurt the company's businesses in the sports betting, with the suspension and postponing of horse races and most of the world's most popular mainstream sports. As Flutter said: "This higher exposure, coupled with the closure of retail betting, led to an accelerated migration of customers from retail to online. It remains to be seen whether these customers will continue to bet online as retail outlets re-open".

Now the company's strategy for the H2 of 2020 seems to be diversification, as the company's CEO, Petter Jackson, added: "Looking ahead, we have identified promising opportunities to increase investment across the group and, while the outlook with respect to Covid-19 remains highly uncertain, the diversification of our group means we approach the future with confidence". The expected full year EBITDA is between £1.175m to £1.325m.

For this, Flutter has acknowledged the competitiveness of the online poker market and decided to invest in improving customer experience to improve numbers and ensure organic growth. It is also reassessing the regulatory risk of the markets and withdrawing for certain jurisdictions. To know more about the PokerStars Poker Rooms check out our full review by clicking here.