Betting giant's first loss after huge tax bill wipes out profits

Paddy Power betting shop

Profits were wiped out by the £163million tax bill (Image: Matthew Horwood/Getty)

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Its revenues almost doubled to £3.1billion during the six months to the end of June thanks to growth in the US, the sports calendar returning to normal and the Euros sparking a betting bonanza. However, Flutter’s profits were wiped out by the £163million tax bill.

A large part of that sum was due to the Government raising the main rate of corporation tax. Chancellor Rishi Sunak began a staggered rise from 19 to 25 percent as he scrambled to help cover a financial blackhole from the pandemic.

Additionally, Flutter had to fork out £12.7million to tax authorities in Greece.

Despite its slump, chief executive Peter Jackson was remaining bullish. In particular, Flutter is looking to continue its expansion in the US as more states legalise online gambling.

He said: “We remain absolutely focused on extending our sports product advantages and replicating our market share success in further states as they regulate. The second half of the year has started well and we look forward to making further progress.”

The company was created by the merger of Paddy Power and Betfair in February 2016 and its £86million net loss is its worst-ever result, annual or interim.

The last time it had a similar deficit was the first half of 2016 when it was £51.7million in the red.

Danni Hewson, AJ Bell financial analyst, said: “The owner of Paddy Power and Betfair enjoyed a strong pandemic as the online gambling sector benefited from people being stuck inside, with little to do.

“This created a hard act to follow as Covid restrictions were lifted, but credit to Flutter ‑ in the first half at least it has delivered.

“Flutter’s US business continues to perform very strongly ‑ benefiting both from the opening up of sports betting in new states and from the successful fantasy sports franchise FanDuel.”

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Roy Walsh

Roy Walsh

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