Flutter flags revenue and earnings hit
Irish gambling operator Flutter Entertainment warned investors that group revenue and earnings will take a big hit from the widespread cancellation and postponement of big sporting events around the world.
Casino News Daily reports that in recent days, the governments and sports authorities in a number of countries have cancelled or postponed a number of high attendance sports events in a bid to contain the global spread of Covid-19.
Flutter, which last year generated 78 per cent of its annual revenue from bets placed on global sports events, said in a statement issued earlier today that it expects a significant material impact on its 2020 revenue and earnings due to the restrictions enforced by multiple national governments as they grapple with the coronavirus situation.
The gambling company said that establishing the precise impact on its full-year financial performance is difficult at this point as there is no clarity over the duration of restrictions on sports events.
Global sports grind to a halt
Most major sports around the world have been suspended or cancelled, but there have also been many instances of events being rescheduled to now take place behind closed doors and without spectators.
All English Premier League fixtures have been suspended until April 3.
There have also bee indefinite suspensions of major football leagues across Europe, including Spain, Italy, France and Germany.
There have been reports that the UEFA Euro 2020 which is set to take place this summer could, too, be affected.
Some Australian sports as well as horse racing in Ireland, Scotland and Australia are taking place behind closed doors.
In the United States, professional basketball, baseball, hockey and soccer fixtures have been suspended, while March Madness, one of the most popular basketball tournaments in the country, has been cancelled.
Flutter said that if restrictions remain in place until the end of August, including full suspension of Australian sports and the cancellation of Euro 2020, it estimates that its EBITDA will be reduced by approximately 90-100 million pounds.
The company’s estimate assumes that its more than 600 Paddy Power-branded betting shops around the UK and Ireland remain open and that the scheduled UK, Irish and Australian horse racing fixtures continue to run.
However, if horse racing is cancelled in the above three regions and its betting shops are closed, Flutter estimates that its EBITDA would be reduced by approximately 30 million pounds per month.
The gambling operator said that prior to the widespread cancellation of sporting events, trading in the first quarter of the year was ahead of management’s expectations thanks to good customer momentum and favourable sports results.
Commenting on Flutter’s profit warning, the group’s chief executive officer Peter Jackson said that their main focus now is on “protecting the welfare of our employees and our customers and we will leave nothing to chance in this regard.”
The executive went on to say that while the company’s near-term profitability will “be impacted by the essential measures being taken globally, the Board will remain focused on protecting shareholder value and managing the business through these turbulent times.”
Flutter is in the middle of a 10-billion-pound tie-up with Canadian gambling powerhouse, The Stars Group.
The merger will create a gambling behemoth with a large portfolio of leading gambling brands including Paddy Power, Betfair, PokerStars, Sky Betting and gaming, Fox Bet, Sportsbet and Beteasy, among others.
The deal is expected to close in the second quarter of 2020.