Flutter expects to lose £50m due to block on Dutch gamblers

Flutter has lowered its earnings forecast due to its temporary withdrawal from the Netherlands following the launch of regulated online gambling.

The Netherlands.- Ireland’s Flutter Entertainment was one of several major online gaming operators who decided to block Dutch players as the Netherlands’ new regulated online gaming market launched at the start of November.

Operators took the decision after the Dutch gaming regulator De Kansspelautoriteit (KSA) warned that it would take action against operators that failed to block Dutch players, not only those that actively targeted them.

Now Flutter, which owns Paddy Power, Betfair, FanDuel and PokerStars, says that the decision may cost it £50m: £10m in Q4 2021 and £40m in 2022.

Flutter said the estimated cost “assumes we recommence trading in Q3 2022 and that our Dutch operations break even in H2 next year as we invest to re-engage customers.”

Due to its temporary withdrawal from the Dutch market, together with sports results going against it in the first three weeks of Q4, the company has lowered its earnings forecast for the full year.

In a Q3 trading update, it forecast full-year EBITDA at between £1.24bn and £1.28bn, down from previous guidance of £1.27bn to £1.37bn.

For the three months ending September 30, Flutter reported revenue of £1.4bn, up 9 per cent. Sports betting revenue was up 13 per cent to £906m and gaming revenue up 1 per cent at £534m.

However, revenue in the UK and Ireland was down 5 per cent to £491m, with similar declines in both online and retail. Sports betting stakes were down due to a condensed Q3 calendar.

Revenue in the international division, mainly from PokerStars, was down 3 per cent, mainly due to product and tax changes in Germany. US revenue was up 85 per cent to £280m, the vast majority from FanDuel, which is now online in 12 states.

Flutter chief executive Peter Jackson said: “Flutter delivered a strong third quarter performance, with double-digit growth in our global player base. This resulted in the group delivering revenue growth of 12 per cent despite challenging comparatives including a concentration of key sporting events in the prior year.

“While a run of customer-friendly results in October have resulted in win margins being below expected levels in the quarter to date, the underlying strength of our business is clear; we have grown our online recreational player base by 46 per cent in just two years.

“With more international jurisdictions and US states on the path to regulation, we look forward to sustainably growing our global player base further in 2022.”