London Bookies Rethink Global Domination
The ambitions of London's biggest gambling companies seem to be shrinking. Both Flutter Entertainment (owner of Paddy Power) and 888 (owner of William Hill) recently reported significant losses and announced strategic shifts away from their previous global expansion plans.
888 Rebrands and Retrenches: Focusing on Core Markets
888 announced a major overhaul, including a name change to Evoke. This move reflects their focus on a multi-brand strategy and a desire to move away from "grey" markets where gambling regulations are unclear.
Their new strategy prioritises established markets like the UK, Italy, and Denmark, with potential exits from unprofitable regions. This shift comes under new leadership and aims to create a clearer path to profitability.
A Different Approach: Flutter Absorbs Losses and Considers Acquisitions
Flutter Entertainment, the larger of the two companies, also took a significant financial hit due to writedowns in "non-core" markets. However, their CEO hinted at a different approach. While Flutter aims to focus on leading markets, it may consider acquisitions to achieve that position in specific countries.
Their losses included a substantial writedown of the Pokerstars brand due to its broader international presence compared to other Flutter divisions. Despite these losses, CEO Peter Jackson remains optimistic, citing opportunities for both organic growth and strategic acquisitions.
The focus is on the US market shift as Flutter exits the FTSE 100.
Flutter recently began selling off its shares in the United States, where their FanDuel brand has become a major player following the legalization of sports betting. This shift will see them switch their primary listing to the New York Stock Exchange (NYSE) and leave the FTSE 100 index at the end of May.
Jackson highlights FanDuel's success in the US as a key factor in their decision. The positive financial performance and increased investor interest on the NYSE solidify their commitment to the American market.
Industry Trend: Focusing on Profitability, Not Expansion
The strategic shifts by both 888 and Flutter, along with similar moves by Entain, suggest a broader trend within the UK gambling industry. Companies are prioritising profitability and established markets over aggressive global expansion. This could signal a future with fewer, but more dominant, players in the legalised gambling space.
