Full year earnings at Paddy Power, Betfair and Poker Stars owner Flutter Entertainment rose by 23%, as it kept its leading position in a booming US market that it said could grow to twice the size previously estimated.
The world's largest online betting group reported full-year 2020 earnings before interest, tax, depreciation and amortisation (EBITDA) of £1.4 billion.
This was ahead of the £1.275-1.350 billion range it had forecast in November.
That excluded an EBITDA loss of £170m in the US, the next big growth market for sports betting, where it merged with The Stars Group (TSG) last May and increased its holding in its US FanDuel brand in November.
However, Flutter said heavy investment there masked a strong underlying performance, with positive contributions from the states it was operating in before 2020. That helped it maintain a 40% share of the US sports betting market.
It also now expects the total US market up for grabs to exceed £14 billion by 2025, around double its previous forecast.
The new forecast is due to an increase in estimated sportsbook value and in the number of states it expects will legalise gambling.
"Nowhere has our growth been more evident than in the US, with customer economics that continue to exceed our expectations," Flutter's chief executive Peter Jackson said in today's results statement.
While the Covid-19 pandemic all but halted sports events for two months from the middle of March, popular fixtures such as soccer and horse racing have since mostly continued uninterrupted behind closed doors.
Annual revenue grew by 59% in Australia, the least affected market, compared with the previous year, and by 8% in the mainly Britain and Ireland-based Paddy Power and Betfair online division.
Group revenue was up 36% year-on-year in the first seven weeks of 2021, Flutter said, citing favourable sports results and further growth in player volumes.
The Paddy Power owner also reported a 106% increase in revenues for 2020 after what it called a "transformational year".
Revenue for the year to the end of December jumped to £4.398 billion from £2.140 billion in 2019 on the back of the addition of The Stars Group (TSG) from May.
But the company's profit before tax slumped by 99% to £1m from £136m in 2019 after the deduction of £432m in non-cash acquisition accounting adjustments.
During the year, Flutter said it completed the merger with TSG, started the integration of the two businesses and increased its ownership of FanDuel in the US, while at the same time it navigated the challenges presented by the Covid-19 pandemic.
Flutter said the Covid-19 restrictions are impacting its retail business in Ireland and the UK, with estimated monthly EBITDA loss of £9m for each month that both UK and Irish retail estates remain shut.
It said that no dividend is proposed for 2020.
CEO Peter Jackson said the company delivered a very strong financial performance in 2020, benefiting from its scale and diversification.
"We continue to grow our recreational player base across all key regions, in Q4 alone the group had over 7.6 million monthly online players," Mr Jackson said.
"Nowhere has our growth been more evident than in the US where we have consolidated our number one position in this crucial market, with customer economics that continue to exceed our expectations, finishing the year as the first US online operator to reach over $1.1 billion in gross gaming revenue," the CEO said.
"While the global outlook remains uncertain, our momentum remains strong and we look forward to the future with confidence," he added.
Flutter said that adjusted EBITDA in its PPB Retail division, which includes Paddy Power shops, fell to £2m from £76m in 2019 on the back of disruption across its retail estates due to Covid restrictions, with its shops closed on average for 38% of 2020. This led to a 36% decline in revenue.
Revenue declined 28% in its UK estate, with shops closed 36% of the year, while revenue in Ireland declined 46%, with shops closed 40% of the time.
It said the better performance in the UK can be attributed to competitor shop closures, more favourable sports results and a strong performance from gaming when available.
The company said it paid, and continue to pay, staff when shops are closed, without availing of any government support schemes to do so.
Revenue increased by 8% to £1.094 billion at Flutter's PPB Online division, driven by 6% growth in average monthly players to 1.4 million.
It said a revenue decline of 8% in the first half of the year was more than offset by 24% growth in the second half, benefiting from "excellent growth" in average monthly players through the second half of the year.
Flutter said that revenue in its Australian business grew by 59% in 2020 to £1.075 billion with excellent operating leverage resulting in Adjusted EBITDA growth of 98%.
"Strong top line growth was driven by the addition of over 675,000 new players as Sportsbet benefited from a significant channel shift of retail customers to online," the company added.
Meanwhile, revenue at its US division jumped by 81% to £695m reflecting the diversified product portfolio offered in the US, as well as additional state openings.
During the year it launched the FanDuel online sportsbook in four more states - Colorado, Illinois, Iowa and Tennessee - and online gaming in Pennsylvania in January. FOX Bet also added Colorado.
Sports revenue increased by 42% reflecting sportsbook growth of 101% and combined daily fantasy sports and racing growth of 15%.
