Paddy Power owner betting shop revenue rebounds

Flutter's Paddy Power betting shops were closed during the Covid lockdowns

Paddy Power-owner Flutter has said its UK betting shop revenue has jumped higher than pre-Covid levels.

Betting shops were closed during lockdowns but since reopening in June, Flutter said UK retail revenue rose 7% ahead of sales before the pandemic.

Like its rivals, Flutter has seen strong growth in online gambling as shops closed and people were forced to work from home.

But one gambling helpline said calls had risen by 9% in the year to March.

And punters came back to betting shops after they re-opened as Covid restrictions eased in the second quarter, with UK retail revenue 7% higher than pre-Covid levels, it said.

The number of people using Flutter's online gambling in the UK leapt even more, increasing nearly 60%.

A UK gambling helpline said calls had increased by 9% in the year to the end of March.

Flutter said global revenue rose 28% to £3bn as its average number of gamblers rose 40% to more than 7.5 million.

Chief executive Peter Jackson said: "The first half of 2021 exceeded our expectations as we made substantial progress against our operational and strategic objectives while maintaining excellent momentum in growing our player base."

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Many countries around the world closed down betting shops during coronavirus lockdowns, and gamblers shifted their focus online.

Flutter attracted new customers during lockdowns, and kept hold of many of them in the first half, said Alistair Johnson, analyst at Redburn.

Studies have suggested that online gambling soared during coronavirus lockdowns, with vulnerable groups particularly at risk.

In the UK, Flutter, which owns brands such as Betfair and Sky Betting and Gaming, said it had 59% more online customers than in the same period in 2019 before the coronavirus crisis.

Overall, its UK and Ireland average monthly numbers grew 44% to 3.3 million customers. This outpaced revenue growth of 30% - so on average, revenue per active customer was lower, it said.

US expansion

Flutter has been pouring money into its US business, spending more than $1bn to date on marketing its flagship FanDuel sports betting brand.

US revenues were more than $900m in the first half, putting distance between it and its main rivals, it said.

The gambling giant competed its acquisition of Canadian gambling business the Stars Group on 5 May 2020.

Freetrade analyst Gemma Boothroyd said the pandemic "lent a helping hand to online betting, speeding up its transition to digital".

She said US revenue growth, which soared by 159% to £652m, was "driven by six additional states legalising sports betting".

"As vaccination ramps up and Flutter's main markets return to business-as-usual, it may be ill-prepared for lockdowns easing," Ms Boothroyd added.

Problem gambling

Last year a House of Lords report found that there were a third of a million problem gamblers in the UK, with young people being most at risk.

The amount of harm was wider, though. For each problem gambler, six were harmed by their activities. So two million people were harmed by "the breakup of families, crime, loss of employment, loss of homes and, ultimately, loss of life", the report said.

It found that 60% of gambling companies' profits come from the 5% of customers who are already problem gamblers, or who are at risk of becoming so.

Lockdown effect

A study in May this year suggested that online gambling soared in 2020 in the UK, with regular gamblers more than six times more likely to gamble online.

The University of Bristol study suggested that "although many forms of gambling were restricted, a minority of regular gamblers significantly increased their gambling and betting online" with vulnerable groups "worse affected".

There was also a strong link between binge drinking and regular gambling, researchers said.

GamCare, which operates the National Gambling Helpline, said it had received 41,000 calls for help in the year to the end of March, a 9% increase on the previous year.

It said there was a big increase in gambling due to boredom, but also more gamblers were using it as a coping strategy during the pandemic.

Two thirds of the gamblers calling the helpline had debt issues, and three quarters had financial difficulties due to gambling.

The most problematic online products were slots, betting, and casino games.

Offline, betting in shops and gaming machines were problematic, gamblers said.

Flutter said that it was developing steps "focused on protecting those that are vulnerable without unnecessarily impinging on the freedoms of the majority of customers".

The UK government is reviewing gambling laws.