The pound weakened against the dollar on Wednesday as UK inflation figures came in lower than expected. This news follows a significant boost to the share price of Flutter Entertainment, the world's largest online betting company, after it announced impressive second-quarter results and a bold decision to resist passing on tax increases to customers.
Flutter, the parent company of FanDuel, a US sports betting platform, reported a remarkable $3.6 billion in revenue for the second quarter, with earnings per share reaching $1.45, exceeding Wall Street analysts' expectations by a factor of three. This strong performance sent the company's shares soaring by 11.5% in after-hours trading.
This positive news comes despite the recent introduction of tax surcharges on bets placed in high-tax US states by Flutter's main competitor, DraftKings. However, Flutter's CEO, Peter Jackson, has made it clear that the company, which boasts a 51% market share in the US by net revenue, is not planning to follow suit.
âWhen competitors raise their prices, then the customers come over to us,â Jackson stated. This confident stance appears to have paid off, with DraftKings ultimately rescinding their surcharge policy on Tuesday evening after Flutter's announcement.
Flutter's decision to absorb the additional tax burden reflects its strong market position and confidence in its ability to retain customers. The company's dominance in the US market, coupled with its robust financial performance, suggests that it is well-positioned to weather any economic turbulence and maintain its growth trajectory.
The impact of Flutter's bold move on the broader online betting industry remains to be seen. However, its decision to defy tax increases could potentially set a precedent and encourage other players to adopt similar strategies, leading to a more competitive landscape in the US market.
