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Paddy Power Betfair Re-Branding To Flutter Entertainment For Entry Into US Market

betfair paddy power merged logoPaddy Power and Betfair are both well-known betting brands in their own right, with the former being the master of the controversial advertising strategy and the latter taking exchange betting into the mainstream.

The pair merged in 2016 and took on the rather unimaginative moniker of Paddy Power-Betfair, but they have now confirmed that they’re under-going a re-brand and the overall company will be known as Flutter Entertainment plc.

The announcement of the new name came about as the company revealed its annual results that showed that the group’s revenue had risen by 7% in 2018 to reach £1.9 billion. That somewhat masked the fact that the earnings before interest, taxation, depreciation and amortisation, known as the Ebitda), had actually dropped 5% to £451 million because of a £24 million investment in the sports betting market that has opened up in the United States.

Brands Performed Well In 2018

growth graphThe Chief Executive of Paddy Power Betfair, Peter Jackson, said that he was ‘pleased’ with the group’s performance in 2018, especially considering that it had been a difficult year for the gambling industry in general because of changes to the way that the regulation and tax was carried out.

He pointed out that Paddy Power had ‘regained its mojo’ thanks to some more ‘classic marketing’ and an improvement to the products offered, whilst Betfair would continue to see improvements in the coming months.

Changes to the way companies are taxed in Australia ‘favour the largest operators’, according to Jackson, meaning that the company is well-positioned to continue its growth there and maintain its position as one of the leading online bookmakers.

With the US market opening up in a manner that Jackson thinks might be the most significant since the invention of online betting, the feeling is that Paddy Power Betfair can make headway in the States. This has been facilitated by the company’s acquisition of FanDual in 2018, which is one of the biggest fantasy football sites in America.

US Market Behind The Name Change

us betting market

The change of name remains subject to the approval of the Paddy Power Betfair board of shareholders, which will likely be sought at the next General Meeting. The reason for the desire to change names comes in the fact that the market in US sports betting is opening up as a result of the Supreme Court’s decision to allow individual states to legalise sports betting if they see fit to do so.

It was felt that a ruling in 1992 that prohibited the majority of states from allowing sports betting was unconstitutional.

The acquisition of FanDual has put Paddy Power in a decent position in the young but growing market, with Jackson saying, “Rather than announcing our plans, we have moved quickly to give ourselves the best chance to win in that market…We are confident that FanDuel’s nationally recognised sports brand, 8m customers, our group betting expertise, and our market access partnerships position us very well.”.

It is a bit of a gamble on a market that is to subject to the whims of the US legal system, but one that Paddy Power obviously feel is worth the risk.

Paddy Power and Betfair Will Remain The Same

rhodri giggs paddy power ambassadorThe name change, should it get board approval, will only affect the company’s business side. The two bookmakers will keep their current names and identities in the UK, which makes sense considering how well-known they are.

Betfair have managed to corner a section of the market with their leading exchange betting, though plenty of the biggest companies have since began offering the same service.

Paddy Power saw its share in the market drop in recent times, with suggestions from the company being that that is because of weather affecting horse racing at times last year.

Jackson said, “With a growing portfolio of brands, we plan to rename the Group as Flutter Entertainment plc. There are no plans to use this historical name for consumers”.

Paddy Power are known for their outrageous commercials and stunts, with the most recent involving an advert with Ryan Giggs’ brother Rhodri. In it the Welshman talks about ‘loyalty’ in order to promote the company’s new Rewards Club scheme, referencing the public breakdown of his marriage after his Wales manager brother had an affair with Rhodri’s then-wife Natasha.

It came in the wake of the Irish company’s revenue from online betting increased by 11% in 2018 in comparison to 1% the year before.

Flutter Entertainment A Throw Back To Early Name

In 1999, just as Betfair was preparing to launch its exchange betting system onto the market, another company called Flutter launched with £30 million worth of backing.

The company, run by Josh Hannah and Vince Minical, was considered by many to be superior to Betfair because of its flat 2.5% commission rate and fractional betting odds. Despite all of that, however, Flutter failed to take off in the same way as Betfair and in December 2001 the latter company essentially took over their rival and the two companies became one.

Hannah remained part of the new company, joining the board and attempting to become the Chief Executive before the role was given to Ed Wray. He left in 2014, but the Flutter moniker has been part of the company’s arsenal ever since and the current CEO has obviously decided that it’s time to resurrect it.

Combined with the recent purchase of Adjarabet and the perceived success of other ‘challenger brands’, it’s clear that Paddy Power Betfair feel they’re now in a position to attack the new US market at the same time as developing things further in the UK.

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