Flutter Reduces Exposure in Russia, Ukraine, While Supporting Families
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With armed conflict continuing in Ukraine, Flutter Entertainment expects no revenue from that nation or Russia soon, the company’s chief financial officer said Tuesday.
During a presentation at the London Stock Exchange, CFO Jonathan Hill offered a summary of the company’s exposure in Russia and Ukraine, given the “evolving situation” there. Russian troops recently crossed the border into Ukraine.
“We are monitoring the situation closely, with the assumption being that revenues from both jurisdictions will fall to zero in the not-too-distant future,” Hill said during the earnings presentation.
Exposure to Russian Market Reduced
The Dublin, Ireland-based company’s properties include FanDuel, a sport-betting platform, and other wagering and entertainment divisions.
Flutter’s holdings also include The Stars Group, an online poker, casino and sports platform. Flutter acquired The Stars Group, known as TSG, in 2020.
Since that merger, Flutter has “materially reduced” its exposure to the Russian online market, Hill said.
In 2021, Russia’s contribution to the company was £41 million ($55 million in U.S. dollars) in revenue, while Ukraine’s was £19 million ($25 million U.S.), Hill said.
Support for Families in Ukraine
Peter Jackson, Flutter’s chief executive officer, noted that the company has contractors and subcontractors living in Ukraine. He said the company is concerned for its colleagues based “in and around the region.”
“We’re doing everything we can to support them and their families, including relocation for the families, if that’s appropriate, to some of the countries neighboring where we may have locations,” he said.
Jackson also said the company has two employees in Russia.
After Russian troops moved into Ukraine, sports leagues were among entities that imposed sanctions on the nation.
This week, the National Hockey league announced it is suspending its relationships with business partners in Russia and “pausing our Russian language social and digital media sites."
New York, Louisiana Mobile Launches Successful
In addressing Flutter’s growth in the U.S., Jackson noted that the launch of FanDuel’s sports wagering app in New York and Louisiana during January created expectations of “strong market shares.”
FanDuel already has acquired 400,000 new mobile sports betting customers in New York, Jackson said.
However, he cautioned that the state’s “tax take” and other factors could mean “the aggressive initial spending is almost over” in New York.
The state’s tax rate on mobile sports wagering revenue is 51%, which, along with New Hampshire’s, is the highest in the nation.
In just 30 days after the launch of New York mobile sports betting, the state took in nearly $2 billion in sports bets, collecting $70 million in taxes.
During the mobile launch, online bookmakers invested heavily in promotions in an effort to acquire customers.
“We hope policymakers in New York recognize that while the state benefitted from an initial period of heavy investment among its operators, such investment is not sustainable beyond a few weeks,” he said.
FanDuel Sees U.S. Growth
During the presentation, Flutter released financial results for its global operations. The following are figures from the U.S.:
“Overall, I am pleased with the progress we have made during 2021 and believe Flutter is exceptionally well-positioned for future growth,” Jackson said in a statement.
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