Paddy Power Betfair bullish on USA prospects in Q1 trading update

Paddy Power Q1 revenue

Paddy Power Q1 revenue

FanDuel is New Jersey's unquestioned sports betting leader and PPB's New Jersey-licensed Betfair Casino reported revenue up 83% thanks to improved cross-sell from sports betting customers.

However, the group said that its United Kingdom online sports betting business was affected by "unfavourable results" in sporting events across the country and in Ireland.

"Underlying momentum remains good for Paddy Power with 22pc growth in average daily actives".

The firm's Fanduel brand was the number one brand in New Jersey during the quarter with a 50 per cent share of market revenues, and several other U.S. states have draft bills in progress to legalise sports betting.

In a trading update issued Thursday, PPB said it generated revenue of £478m in the three months ending March 31, a 17% rise over the same period previous year.

Within sports, there was strong revenue growth in Sportsbet and Fanduel, while in gaming, Paddy Power Betfair described as "excellent" the growth across European and U.S. online businesses, supplemented by the acquisition of Georgian online sports and betting operator Adjarabet at the start of February.

Retail revenue fell another 2% to £77mln in the quarter, with 2% machine gaming growth offset by a 5% decrease in sports revenues as customers backed more winners.

PPB also took the opportunity to stress its responsible gambling credentials, with the operator able to monitor more than 115 customer behaviours daily and assigns risk scores to each active customer.

Online gaming was a different story, with revenue rising 31% to £76m, although this gain would have been only 14% absent Adjarabet's contributions.

Looking ahead, PPB said that trading in April has been in line with the group's expectations.

The FTSE 100 company was also buoyed by "excellent" global growth in its United States and Australian markets, where revenues jumped by 47% and 20% respectively. Excluding Adjarabet, revenue would have been up 14%, driven by strong growth in the Paddy Power brand.

Quarterly revenue rose by nearly a fifth to £478m powered by a 47pc surge across the Atlantic.

"[For] rest of the Group we remain on track to meet our full year profit expectations despite the adverse sports results in Q1", he added.

Total sports betting stakes in the U.S. during the first three months of the year were $598m (€533m), on which the company generated gross revenue of $33m (€29m), more than double the revenue generated in the fourth quarter of 2018.