Live blog: Flutter Entertainment H1 2020 financial results

CEO Peter Jackson pledges to invest in PokerStars business as new-look regional leadership team is unveiled

That’s the end of the analyst call. Jackson has signed off and so should we. Until next time!

No conference call would be complete without a question on UK regulation. Jackson on the forthcoming gambling act review:

“Clearly, the UK government has got an awful lot on its plate at the moment, but we do expect there to be some movements around the review of the Gambling Act.“The industry has been pretty impressive in terms of the measures we’ve undertaken over the last few months, whether that be around restrictions of advertising or the stepping up of interventions with customers during a very tricky period.“The timing with which the Gambling Act is to be reviewed is uncertain, so we’re looking forward to getting more clarity on that for our operating environment.“However, we’ve got Sky Bet and Paddy Power, two of the best recreational brands in the UK, so we are positioned very well for whatever changes may come down the track.”

Analyst firm Peel Hunt has provided the following note, titled Thriving in Adversity:

“Flutter’s FY 2020 guidance and H1 2020 results are ahead of our expectations. Strong growth in the acquired, gaming-focused Stars business has offset pressures elsewhere. The strong US market position has been maintained. We have increased our target price from 10,600p to 12,600p and maintain our Hold recommendation as we believe the shares are fully valued.”

Jackson coy on plan to position FanDuel against Fox Bet in the US:

“We are undertaking reviews in all divisions for a go-to-market strategy for different brands. We like Fox for access on Super 6 as it is a good way of acquiring national customers before cross-selling to the sportsbook like Sky Bet does in the UK. Fox Bet will be more recreational or super casual, compared to FanDuel’s core betting focus.”

Plenty of US questions coming in as expected, the first of which is on tech plans in the market:

We have now deployed our account and wallet into the market, which means customers log into our platform and we own that end-to-end journey, albeit they need to be segregated between DFS sports and casino. The cross-sell journey is much better from casino to sports in states where it is allowed, compared to before when it was just DFS and then a separate sportsbook wallet as that was not a great customer journey.”

Analyst asks CFO Jonathan Hill whether Flutter wishes it had spent more on US customer acquisition:

“That comment was about our first season two years ago in New Jersey, the very first state we went into. We took a more considered approach in our second season when we added extra states and put more money in, so that comment was primarily about New Jersey.Our retention levels in the US are better than in other markets.”

Jackson talks up potential of acquired PokerStars business:

“There are areas we need to invest in, product, tech and other capabilities. PokerStars suffered from a lack of investment at The Stars Group as they were previously focused on SBG, BetEasy and Fox Bet, so had to make difficult choices on deploying capital, whereas we can invest in all opportunities but it might take a while.“PokerStars has a much bigger geographical footprint than the traditional Flutter business, but there are still many markets we are not well represented in that we want to pursue and are excited about.“It ought to be a much bigger business than it is.”

Jackson on expanding Betfair exchange business being split into UK and international markets:

“There are limitations in some international markets because exchange is not allowed or difficult to operate, but we need to get the right balance between exchange and sports betting.“It will take time to build the right product capabilities in international markets. Betfair might be quicker because we can use a white-label option in relevant markets, but sports will take longer because we want to make sure we get it right.“Our experience on Sky Bet or Sportsbet or FanDuel tells us having the right product makes such a massive difference when trying to grow a business, especially when focusing on recreational customers.”

Jackson now taking questions from analysts from Flutter’s Hammersmith office.

Peter Jackson will be speaking to analysts in five minutes time.

Jackson defiant when asked about Covid-19 job losses: “We didn’t take any government support scheme; we closed our shops in advance of them asking us to and we told retail colleagues they’d be entitled to full pay. We are a strong-performing business and we don’t need to see any job losses as a result of Covid.”Jackson reveals 700,000 deposit limit messages were sent to Sky Bet users at the start of lockdown as second question comes in on protecting customers during lockdown from increased risk of harm.“Customers rediscovered their love of poker, but people were spending £10 a week with us. This is a very low-cost form of entertainment and that is important to note. We dramatically stepped up the number of interventions with customers by two-thirds in Australia as well.”First question comes in on the departure of former TSG CEO Rafi Ashkenazi – was it planned?“Rafi was never going to stay on the board long term. Covid accelerated his decision to focus on other plans but I’m pleased he’ll stay as a consultant until the end of the year.”

Niche sports-boosted betting margin

Sky Bet drove pre-Covid sports growth

PokerStars recreational play boomed

launched mobile home games for the first time

Flutter on post-merger technology transition

The results are in…

H1 2020 financial results

FanDuel Finance Flutter Entertainment H1 2020 Insight Paddy Power Betfair Peter Jackson PokerStars Sky Betting & Gaming