Flutter Entertaiment

Flutter LogoFlutter is a ginormous company that grew rapidly due to a succession of acquisitions and mergers of some of the biggest betting companies in the industry. It is now officially the biggest betting and gaming company in the world.

Some of they key companies that make up Flutter are Paddy Power, Betfair, Sky Bet, and PokerStars, but there are many more.

These were all huge names in the industry before they came together, and had already individually hoovered up many smaller companies. This, in effect, makes Flutter one huge business group made up of several other large business groups, which gives you some idea of the resources they have at their disposal.

What Flutter also have as an advantage over many of their rivals is their global reach. The companies included within the group are all incredibly powerful in different territories, so Flutter can rely on revenue from all over the world.

The name itself harks back to an old betting exchange which was in competition with Betfair in the earliest days of betting exchanges, until Betfair bought them out in 2002, so it’s a curious choice but one that works, nevertheless.

Flutter Entertaiment Brands

Company Details

Revenue £7.69 billion (2022)
Annual Pre-Tax Profit £518 million (2022)
Premises Paddy Power = 608 shops, FanDuel = 27 locations
Offices Dublin (HQ), London, Melbourne (Sportsbet.au), Tbilisi (Adjarabet), Leeds (Skybet), New York (Fan Duel), Ontario (Stars Group)
Subsidiaries Timeform, Airton Risk Management, Sporting Life, Singular
Publicly Traded London Stock Exchange (FTSE 100)
Number of Brands Paddy Power, Betfair, Sky Betting & Gaming, Pokerstars, Adjarabet, SportsBet.au, FoxBet, FanDuel, TVG, Junglee Games, Tombola, Sisal = 12

You can see that the group are strongly established in key markets such as the UK, Ireland, Australia, and America, so they are concentrating on largely English speaking countries but do have plans to expand further afield and explore new markets too.

Flutter’s subsidiaries are interesting to look at.

From one of the best known sports data and content providers on the internet to risk management services for other betting brands, they seem to have business interests in every area of the industry that they can utilise themselves as well as generate further revenue from.

Key Mergers & Acquisitions

Betfair ‘Merge’ with Flutter.com

2002

When Betfair made the move for Flutter, who were struggling financially despite many customers believing them to be the better of the two exchanges, it was touted as a merger.

In truth, they probably bought them to shut them down and sew up the market, because not long after the website was gone and for a time Betfair was the only real option for anyone wanting to experience exchange betting.

A few key members of Flutter’s leadership team moved across though and were still with the company when Paddy Power Betfair became Flutter Entertainment in 2019. So the name survived even if the company didn’t.

Betfair Acquires Timeform

November 2006

The £15 million Betfair paid for the horse racing publication bought them a slice of British horse racing heritage, and also enabled them to bolster their product and content offering.

Timeform’s business was all about providing analysis, form guides, and horse racing ratings, and with a large portion of Betfair’s trade coming from horse racing bettors it was a perfect partnership.

The content Timeform produced would now be seen and used by many more people and Betfair could develop new products using these new resources.

Paddy Power Buys Sportsbet

December 2010

Although they already owned 51% of the company after a deal made in 2009, Paddy Power went all in a year later and bought up the rest of the business shelling out a further £86.2 million.

The business was doing very well and Paddy Power wanted to get in there early before the price went up.

They only paid €27.2 million for the first half of the business so it had already shot up, and they projected the deal would start making them money as early as 2011.

Paddy Power Betfair is Created

February 2016

A new gambling giant was created when Paddy Power and Betfair confirmed their merger in September 2015, and completed it 5 months later in a deal worth £5 billion. Paddy Power investors would own 52% of the new business with Betfair investors taking the remaining 48%.

The two complimentary brands were a good fit as new online gambling taxes were introduced – online revenue accounted for about 80% of the business – and they could team up on developing new technology and marketing strategies.

It did result in some job losses though, as the two brands also sought to achieve £50 million annual savings by combining some areas of their operation.

Paddy Power Betfair Acquire FanDuel

May 2018

Having already acquired Draft, PPB enhanced their position in fantasy sports betting with the purchase of popular North American brand FanDuel.

The deal went through for an undisclosed fee, but PPB put up $158 million cash to pay off FanDuel’s $76 million worth of debts and to fund operations of the new venture.

This was the first deal of its kind after the US Supreme Court legalised sports gambling and handed over power on the decision to each state. The UK market became a prime target for existing betting companies wanting to expand and reach a massive potential customer base, and Paddy Power Betfair were quick off the mark.

Stars Group Completes Sky Betting & Gaming Takeover

July 2018

This deal worth £3.6 billion made a great deal of sense for TSG, who were looking to diversify their revenue options and gain another customer acquisition channel.

It also broadened their geographic reach and enabled them to cross sell products to their customers across the different brands. Not to mention the benefits of combining both company’s technological abilities.

This deal actually resulted in the largest publicly traded online gaming company for a short time, but as we know, there was an even bigger deal to be made a few short years later.

Paddy Power Betfair Swoops in on Adjarabet

February 2019

One of the more surprising acquisitions on the list was PPB’s purchase of Georgian betting firm, Adjarabet, paying £88.3 million for a 51% stake in the company.

Adjarabet had a healthy 40% share of the market in Georgia as well as business coming from nearby Armenia, so it made a strong choice for Paddy Power Betfair’s first real move into the European market.

The deal came with an option to buy the rest of the company 3 years later for 7 times Adjarabet’s EBITDA in 2021.

Flutter Merge with Stars Group

May 2020

This was the deal that created what is still the biggest sports betting and gaming company the world has ever known. Flutter Entertainment and The Stars Group became on company in a massive £8.5 billion deal.

Shareholders voted in favour of the deal almost unanimously, and the groups new combined annual revenue was around £3.8 billion.

The deal would see TSG operating as a vertical under the Flutter umbrella, so although the it was classed as a merger it looked a lot like an acquisition.

Saying Goodbye to Oddschecker

July 2021

This deal actually included a few other loose odds and ends as well as the much loved odds comparison service, Oddschekcer.

For the £155 million that private equity business Bruin Capital paid, they also got hold of Oddschecker’s subsidiaries WhoScored.com (a football statistics portal), and a few online casino affiliate websites.

Flutter only owned the company because it was owned by the Stars Group, with whom Flutter had recently merged. It was never something they were that interested in keeping so divestment was always on the cards.

What’s more, Entain pulled their two biggest brands, Ladbrokes and Coral, off Oddschecker shortly after Flutter got hold of the company. They claimed the decision was not related but as competitors that is hard to believe, especially since they signed back up once Oddschecker was sold.

Tombola Joins the Flutter Family

November 2021

One area that neither Flutter nor ay of its many brands had previously had much of a stake, was in online bingo.

Wanting to rectify this and get some skin in the game, Flutter made a successful bid of £402 million for the very popular and independent online bingo company, Tombola.

With over 400,000 monthly players, customer retention was a strong selling point, as was the fact that Tombola had a strong 16 year history with more than 80% of revenue coming from the UK, meaning plenty of opportunity for expansion into other markets.

The deal was completed in early 2022.

Sisal Acquisition Gives Flutter Foothold in Italy

August 2022

Flutter made a successful bid for Italy’s leading online gaming operator just before the end of the year, and the buy out was completed in the 3rd quarter of 2022.

It cost them a thundering £1.62 billion but got them a ‘gold medal position’ in Italy, a country where they had previously not had much if any footprint, amounting to an online market share of around 20%. That’s not to mention Sisal’s retail and lottery operations.

Sisal brought with them around 2,000 additional staff, and around 300,000 engaged online customers per month, plus around 9.5 million retail customers annually. Italy is Europe’s 2nd largest regulated market, so this really was a huge buy for Flutter.

About the Company

Flutter Brands

As a business, Flutter Entertainment is split into 4 divisions:

  • UK & Ireland – 3.7 million monthly customers
  • USA – 2.3 million monthly customers
  • Australia – 1.1 million monthly customers
  • International – 3.1 million monthly customers

Each division has it’s own focus and specific brands, and although there is some crossover with certain brands operating in a number of different divisions, they are more or less all responsible for their own target area.

PP Betfair LogoUK & Ireland – Paddy Power Betfair handle the retail side of the business with their betting shops all over the UK and Ireland, as well a huge online operation available in over 100 countries, including the betting exchange side of things. They also offer B2B services such as odds traders via Airton Risk Management, etc. Tombola and Sky are included in the UK & Ireland division as internet only brands.

FanDuel LogoUSA – Comprising of FoxBet, Pokerstars, TVG, and FanDuel, the US division is tasked with expanding all over America, and it is helped by the inclusion of Betfair’s US business. The USA is still a very fertile market, and by offering a full range of products this division is well placed to sweep up market share.

Sports Bet LogoAustralia – The Australia division was originally comprised of Sportsbet and BetEasy, the latter of which has previously bought out William Hill Australia; but in 2020 the BetEasy brand was folded into Sportsbet, so it is now a single brand division. Sportsbet uses generous promotional offers to acquire and retain customers.

Pokerstars LogoInternational – This is the newest division in the group which aims to help Flutter expand and grow in new markets, with PokerStars leading the charge as an international online poker brand – although it does also offer gaming and sports betting services to its customers. Betfair is also included here, as well Georgian brand Adjarabet and recent India based acquisition Junglee. Sisal in Italy is arguably the jewel in this crown though, and a big reason why the International division was the fastest growing of all between 2021 and 2022.

History & Future

Paddy Power Old Site
Paddy Power’s Website from the Early 2000s

It’s hard to talk about Flutter’s history because they have only been around under that moniker since 2019. What’s more, they are made up of so many huge companies it would require an article all of its own to cover each one properly.

Paddy Power can be seen as the ‘head’ of the group since their HQ was chosen as Flutter’s HQ, and as many people know, that brand was created in the 80’s when three independent Irish bookies came together.

Together with Betfair, real disruptors of the industry when they entered it back in 1999 with their exchange and ‘Death to the Bookmaker’ campaign, Paddy Power Betfair was formed. Two years later and The Stars Group, world famous for their PokerStars brand, made a successful bid for Sky Betting and Gaming, another huge and recognisable brand.

It’s fair to say that it was these two mergers that paved the way for what Flutter would become, and although the amalgamation of the two groups might not have happened very long ago, it has already had a huge impact on the industry.

Flutter ExpansionThese four brands could now be seen as the four pillars that stabilise the Flutter group allowing it to grow at pace, and growth is certainly the focus of the group.

Over the next few years we can expect to see plenty more expansion into the US market and it wouldn’t be a surprise to see more European brands join their ranks either.

Flutter’s strategy is to maximise growth in core markets like the UK, Ireland and Australia, while at the same time advancing into new markets and quickly becoming market leaders. Given their size, this will almost certainly be done via acquisitions.

UK Tax & Contributions

UK TaxAcross all brands and departments, Flutter Entertainment employs 22,000 people across 51 offices globally, and 600+ betting shops in the UK and Ireland.

A large proportion of those staff will be working in bookies in the UK where there are more than 350 Paddy Power retail outlets, so it can safely be assumed that Flutter are responsible for literally thousands of UK jobs, especially when thinking about those working behind the scenes as well.

Their total annual UK tax bill including levies is over the £600 million mark, and again, a huge chunk of that will be going to the UK Government since £2.1 billion (roughly 27%) of their 2022 revenue came from the UK, not to mention all the money spent on rent, bills, and products to run all of their premises in this country.

Another way they contribute to the UK economy specifically is through sponsorship and advertising. Paddy Power and Betfair especially go heavy on their marketing, with Paddy Power famously un-sponsoring a number of football teams; ie, they paid for the sponsorship but didn’t have their logo on the football shirts. In 2022, Flutter spent over £1.9 billion in sales, marketing and advertising, and a lot of that will have been spent in this country.

For example, British Horse racing alone benefitted to the tune of £100 million from Flutter back in 2021, through a mixture of marketing, media rights, levies, and sponsorship.

Flutter are big on donations too, supporting 110 good causes in 2022 with either financial donations or through employee schemes whereby the company pays for them to work for a charity for a few days. The causes change from year to year, but giving back to local communities is a big part of what Flutter do.