aThe absence of deal-making is one reason why Flutter Entertainment, the £20bn gambling conglomerate that takes on Paddy Power, Betfair, Sky Bet, PokerStars and more, has been one of the worst share price performers on the FTSE 100 index this year . The stock is down a quarter.
Investors had expected liberalization of the US market, where Flutter looks well-established to deliver the adrenaline rush of high-value consolidation with its FanDuel operation, but that never happened. Two US firms made tentative offers for Anten, Ladbrokes and Coral Operator, which is also in the larger states, but both pulled back. It could be that the major global players will have to compete harder with each other in the US, which is a less exciting short-term investment prospect (though perhaps better suited to US punters).
Still, Flutter comes up with an opportunistic pre-Christmas deal to remind its shareholders that life isn’t about American enthusiasm. this is £1.62bn paid to buy Italian conglomerate Sisalu, the country’s leading online gambling operator with a 12% stake, but one that also has a large chain of betting shops and runs regulated lotteries in Italy, Morocco and Turkey.
Flutter CEO Peter Jackson says the buys, which love their podium metaphors, will secure “gold medal status” in a market that was near the top of Target’s list. They probably mean that it is difficult for outsiders to get a good online foothold in Italy because almost all betting ads are banned, a set-up that favors people with shops.
Naturally, Flutter is paying a handsome price – nearly eight times Sisal’s expected pre-interest and pre-depreciation earnings of €248m (£211m) this year – but the current owner, private equity firm CVC, will take the business before. Can swim to conquer. It looks like a good strategic play. The UK group will be able to inject its undoubtedly clever online expertise.
What does not buy Sisal, a trust, is a sign that Flutter has ambitions to run the UK national lottery. Sisal is pushing for the job, but ownership of a major UK bookmaker must bring disqualification. How the recent revelation of this newspaper Sky Vegas, Another Flutter Operation, Offers Free “Spins” for Recovering Addictions fresh in memory. You don’t get a medal for such mistakes. Put online casino games and lotteries under different roofs.
UK restaurants need more than a billion, Chancellor
Surprising Omicron discovery of the day: regional infection data largely reflected in the decline in restaurant visits. So, according to flash data used by the Office for National Statistics, London was down by 18 points and Manchester by eight, within a national drop of 14 percentage points in the number of sitters in the week ending 20 December.
The only minor source of consolation was that Manchester’s diners were (marginally) higher than in the same period in pre-pandemic 2019. But it is not much. Rishi Sunak must still be prepared to be more generous with his support package for the hospitality sector – £1bn may not cut it.