Written by Padraic Halpin
Flutter has increased its full-year guidance following a strong second quarter performance and announced that it will not impose a surcharge on customers in high-tax U.S. states. This decision came shortly after rival betting firm DraftKings abandoned its plans to implement a similar surcharge.
After the announcement, Flutter’s U.S. shares surged by 11% in extended trading. The company, which recently shifted its primary listing to the U.S., now expects a core profit increase of over 30% for the full year, surpassing its initial forecast.
Flutter, headquartered in Dublin and operating brands such as Paddy Power, Betfair, and Sportsbet, reported a 17% rise in adjusted core profit for the second quarter. The company’s FanDuel brand, along with DraftKings, dominates the U.S. online betting market with a combined market share of approximately 70%.
Flutter’s response to DraftKings’ surcharge announcement was closely watched by investors. DraftKings had justified the surcharge as a means to offset high tax rates in states like New York, where the tax on gambling revenues is as high as 51%.
Ultimately, Flutter decided against implementing a similar surcharge after considering customer feedback, a move that was welcomed by the market. Analysts had cautioned that DraftKings’ surcharge could lead to a loss of market share if competitors did not follow suit.
Flutter’s CEO, Peter Jackson, emphasized the importance of responding to higher taxes by adjusting marketing strategies and customer offers. Drawing from its experience in the European market, the company plans to mitigate the impact of recent tax hikes in states like Illinois.
Flutter now anticipates a full-year core profit range of $680 million to $800 million at FanDuel, surpassing previous estimates. The company also revised its core profit forecast for other global markets, including Britain and Australia, to $1.69 billion to $1.85 billion.