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Paddy Power Betfair turns west to US as it's squeezed in home markets

Paddy Power Betfair is facing a squeeze in the UK and Ireland. Photo: Simon Dawson/Getty Images
Paddy Power Betfair is facing a squeeze in the UK and Ireland. Photo: Simon Dawson/Getty Images

Paddy Power Betfair is cashing in on the growing US gambling market as it faces new restrictions at home in the UK and Ireland.

The global gambling giant, which is listed on the London Stock Exchange and Irish Stock exchange, on Friday reported US revenues surged by 22% to about £53m ($69m) in the third quarter. This boosted worldwide sales in the quarter to £485m ($632m). The company finalised its purchase of US-based FanDuel near the start of this period and has been working on big expansion plans.

Paddy Power Betfair (PPB.L, PPB.IR) opened a massive gambling shop called the FanDuel Sportsbook in New Jersey in mid-July and the location has quickly become one of the biggest sports betting outlets in the world, according to the company. It’s been taking over $1.5m (£1.2m) in stakes per day, with about 30% of bets coming from New Yorkers.

The location opening came just weeks after a US Supreme Court ruling ended a ban on sports betting, which has opened the door for individual states to allow gambling on sports.

While it is still very early in the evolution of US sports betting, we are encouraged by both the indicative demand for regulated sports betting products and by the initial market share that FanDuel has obtained,” the company said in a statement on Friday.

Paddy Power Betfair now offers FanDuel fantasy sports across 41 states; horse-racing across 33 states and the FanDuel sportsbook in New Jersey and West Virginia. It also has a Betfair Casino and Exchange in New Jersey, which saw revenue grow 40% in the quarter.

“While early days, there are some very positive signs from its US business in terms of activity levels,” said analysts at Goodbody.

FanDuel was bought by Paddy Power Betfair in early July. Photo: Scott Olson/Getty Images
FanDuel was bought by Paddy Power Betfair in early July. Photo: Scott Olson/Getty Images

Things aren’t quite as rosy back at home, as the company reported a slide in revenue from UK and Irish shops. The Australian market also saw a 2% drop in sales. Its online business remains strong.

The company is preparing for the introduction of new taxes in the UK and Ireland that could cost it tens of millions in the coming years. The UK is also introducing new gambling limits.

Paddy Power Betfair estimated the combined changes to regulations, taxes, and fees in the UK, Australia, and Ireland would have cost about £115m ($150m) if the changes were all applied in 2018.

Shares in the company rose 1.8% in London on Friday.


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