Good news for gambling investors as Paddy Power’s First Quarter Revenue increase by almost a fifth. According to the UK gambling group, the jump in revenue is because of strong growth in the U.S. gambling market.
Furthermore, its sports betting software has become popular in all of its U.S. locations where they have a sportsbook. Despite having several UK locations where the bettors have been winning, the FTSE 100 company has shown higher revenue. Thus, they are reporting revenue up 17%to £478m in comparison to the same period last year.
Furthermore more, it is a surprise to investors. This is because they thought it would see lower revenue because of the temporary suspension in the UK horseracing market.
On the U.S. front, they are reporting a 47% increase to £78m. In addition, the U.S. branch continues to see good returns in its investments. Therefore, the increase in return has made the first quarter revenue even better.
Analysis of Paddy Power’s Expansion in the U.S.
Thanks to its connections and foresight, Paddy Power became one of the first companies to enter the U.S. gambling market. This is because the company made a partnership with FanDuel which operates in 41 U.S. States.
At the moment, sports betting is legal in 7 out of 50 states and FanDuel holds 50% of the market in New Jersey. Morgan Stanley believes that Paddy Power will hold 15% of the total U.S. gambling industry this year.
This is because they have a lot of competition from U.S. and European companies. Furthermore, Sportsbook Pay Per Head companies are also increasing their hold in the gambling market. At the moment, their biggest competition is probably Bet365 due to them signing a 20 year contract with Empire Resort. Another competitor is GVS which owns Ladbrokes Coral which has a partnership with MGM casinos.
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