Paddy Power owner Flutter Entertainment has issued a profit warning following a sustained winning streak by punters.
The gambling giant, which also controls Betfair, Sky Bet, and the US-based FanDuel, has revised its full-year underlying earnings outlook downwards from £3.3 billion to £2.9 billion.
The company attributed this significant reduction primarily to a series of “customer-friendly” sporting outcomes during the third quarter, a trend that has intensified into the current quarter.
This has resulted in an estimated hit of approximately £129.4 million ($170 million) to underlying earnings since the beginning of October.
Further impacting profitability are substantial investment costs, as Flutter continues to expand its FanDuel operations across the United States.
The firm also announced the upcoming launch of the FanDuel Predicts app next month, developed in partnership with CME Group.
This new application aims to tap into the rapidly growing event contracts market, enabling users to wager on the probability of specific events across sports, entertainment, politics, and the economy.
Flutter, which shifted its primary stock market listing from London to New York last year, saw its shares in London initially fall by as much as 4 per cent in morning trading on Thursday, before recovering slightly to close around 2 per cent lower.
Peter Jackson, chief executive of Flutter, said: “We are the clear number one operator in the US, and we will continue to build on that position to drive future profitability.
“Our strategic investments, including the launch of FanDuel Predicts and recent international acquisitions, position us exceptionally well to capture new opportunities and deliver sustainable, profitable growth.”
In a letter to shareholders, Mr Jackson reiterated warnings over jobs and investment in the UK if the sector is hit with tax hikes in the upcoming Budget.
He said: “Significant increases to the tax rates would threaten jobs and investment across the UK market, as well as driving more customers to unregulated operators on the black market – where there are no player protections and regulatory oversight.
“We continue to engage with policymakers and await the outcome in the Budget later this month, however should taxes increase, Flutter’s growing scale and market leading position will help to mitigate the impact.”
Flutter last month said Paddy Power would shut 57 betting shops across the UK and Ireland, putting almost 250 workers at risk.
It blamed the closures on “increasing cost pressures and challenging market conditions”.
In the third quarter to the end of September, Flutter reported a 6 per cent rise in underlying earnings to 478 million US dollars (£363 million) as revenues jumped 17 per cent.
