April 17, 2020 / 7:10 AM / in a month

UPDATE 1-Flutter revenues more resilient than expected to sports shutdown

(Adds details, background)

By Padraic Halpin

DUBLIN, April 17 (Reuters) - Paddy Power Betfair parent Flutter Entertainment said revenues had been more resilient to coronavirus disruption than expected, with the U.S. gaming market and continued Australian horse racing partly offsetting a global sports events shutdown.

The Irish betting group estimated a month ago that it would take at least a 90 to 110 million pound ($112 million-$137 million) hit to its full-year earnings if curbs on sports fixtures remained in place until the end of August.

It had also flagged a possible further 30 million pound rolling monthly hit if horse racing was cancelled in Britain, Australia and Ireland and its shops closed.

While racing has since ended in Britain and Ireland, and all Paddy Power stores shut, its continuation in Australia limited the year-on-year decline in revenue from March 16 to April 12 to 32%, less of a sports hit than the gambling group expected.

Paddy Power Betfair’s online revenues fell 32% year-on-year during the period versus a 7% dip for Sportsbet, its Australian online business that it said had gained new customers due to the closure of retail betting outlets throughout the country.

With big events like the English Premier League on hold and the 2020 European Championships postponed, the list of competitions on the Paddy Power mobile phone app now includes Belarusian reserve league and Tajikstani top flight soccer.

Prior to the raft of sporting cancellations that began in March, Flutter said trading had been running ahead of expectations. Group revenue was up 16% in the first quarter, including the disruption towards the end of that period.

It reported further progress in the U.S., where it merged its local unit with fantasy sports company FanDuel in 2018, with first quarter revenue growth of 72% and 100,000 new customers keeping its lead in the fast growing market with a share of 41%.

Flutter also said last month that it would pay its 2019 dividend in ordinary shares, shelve a pro-rated dividend in relation to its merger with Stars Group Inc (TSG) and suspend the 2020 dividend for the combined group.

The $6 billion share deal agreed last October to buy the Canadian group is set to create the world’s largest online betting and gambling company by revenue. Flutter reiterated on Friday that the coronavirus challenges underlined the need for further product and geographic diversification

Flutter shareholders are set to vote on the acquisition next week with the acquisition expected to close during the second quarter following final regulatory approvals. (Reporting by Padraic Halpin; Editing by Jon Boyle, Kirsten Donovan)

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