Shares of Flutter Entertainment PLC (LON: FLT) surged 4.32% after revealing that its Australian subsidiary ‘Sportsbet’ was serving 50% of all online sports gamblers in Australia.
The company noted that it had generated 21% compound annual growth over the past five years.
Sportsbet still has significant growth potential given that sports betting only accounts for 17% of Australia’s entire gambling market, and the sector is projected to keep growing.
Flutter also clarified that Sportsbet’s customers were primarily recreational betters with growing disposable incomes, which means that they could spend more on Sportsbet’s services in the future, accounting for higher organic sales growth.
Investors also cheered that Flutter had settled the ongoing legal battle with the Commonwealth of Kentucky by agreeing to pay an additional $200 million, bringing its total payments to $300 million.
The payment will see Flutter finally settle an $870 million judgement that was reinstated last year. The initial judgement was made in 2015 against The Stars Group, which Flutter acquired in 2019 for $6 billion.
The online gambling group noted that its Australian business was buoyed by a significant migration of retail gamblers to online platforms due to the coronavirus lockdown measures.
From a technical perspective, Flutter shares are trading up 5.56% for the year after a massive decline phase that lasted from late March to late May, followed by a sideways trading range that has seen it recoup most of its losses to date.
Flutter shares are currently trading below their 2021 highs of 17135p, and it remains to be seen whether the stock can break above this crucial level to print new all-time highs. Meanwhile, the share price might be due a pullback given the recent rally.
*This is not investment advice.
Flutter share price.
Flutter shares rallied 4.32% to trade at 16282.5p, rising from Tuesday’s closing price of 15607.5p.