The new CEO of Paddy Power Betfair indicated that he believes his company is well-positioned for a launch of US sports betting in an earnings call reviewing 2017 performance.
Paddy Power Betfair on US sports betting
The comments from CEO Peter Jackson, who took over the role in January, come ahead of a US Supreme Court decision expected this spring about the federal sports betting ban outside of Nevada.
Jackson touched on the topic of the prospective US market several times during Wednesday’s call, including this bit:
“Over the medium term, regulatory changes can provide additional opportunities by potentially opening up new markets. For example our assets in the US give us a head start on what could potenially be a very substantial market. …
And we are considering options for the appropiate way we would participate in the event of positive regulatory changes.
Jackson has been at the helm of the company that merged two separate entities at the start of 2016. He now leads a company that could be expanding its footprint in a major way if sports betting laws proliferate around the country.
It already as a foothold in the US via:
- TVG, which oversees online horse betting operations for the company.
- A daily fantasy sports platform — Draft (more on that below).
- An NJ online casino — Betfair Casino.
Putting more money in Draft
PPB executives talked briefly about TVG, which features Draft under its umbrella. PPB indicated on Monday that “$15 million in startup losses” have been put into the DFS platform and an exchange wagering product.
Here’s more from outgoing chief financial officer Alex Gersh. He said the same kind of spend ($15 million) will take place this year:
“We actually see a very reasonable growth in Draft. We’re very pleased with the performance and we see this as an opportunity ahead of any potential regulation changes to continue to step on the gas and to drive customer acquisition.”
PPB acquired Draft less than a year ago. It’s obvious the product is a way to build up a database of more potential bettors, alongside TVG’s product.
Numbers already looking good at PPB
Beyond the look at the US market, some things looked promising for PPB:
- Revenue was up 13 percent year over year to £1.7 billion, driven by 16 percent growth in sports revenue.
- Operating profits increased by 19 percent.
- European platform integration completed in January.
On the heels of the last point, Jackson noted:
“Paddy Power customers are now enjoying the fastest sportsbook app in the market. Our considerable development resources will now be focused on bringing more new products to customers, some of which will be delivered ahead of the World Cup.
Still, PPB said that the Paddy Power brand is losing market share. With the technology integration behind it, development and marketing spend are in the company’s future, Jackson said.
Everyone getting ready for sports betting…
It’s the latest in a string of companies that are eager to get into the US sports betting.
MGM CEO Jim Murren talked optimistically about the sports betting opportunity earlier this year. William Hill — another company with an existing stake in the US market — was similarly excited about the market in its most recent earnings call.