In “Race to the Top”, Flutter Lightens Load By Dumping Captain and Crew Overboard
A cynic may argue that in its “race to the top”, Flutter Entertainment, the world’s largest gambling group, has decided to lighten the load and forge ahead by changing captains and dumping some of its crew overboard.
Hot on the heels of the news that Conor Grant, CEO of Flutter’s UK and Ireland operations, has in time-honoured metaphor “decided to take a break” to “spend more time with his family” comes the revelation that the FTSE100 super cruiser has now decided to start axing staff.
Rare indeed is the time when we at iGamingFuture remind readers “we told you so”. But only last week in a post about the corporate gamers replacing Grant with Ian Brown, Chief Executive of B2B Internet hosting firm UKFast, we wrote:
“With Flutter’s growth flat-lining in its core UK market–and its shares down some 37 per cent for the year, against a broader market slide of 4.8 per cent–it remains to be seen whether the change of helmsmen will prevent the sharks taking even bigger bites out of the gambling whale.”
It wasn’t quite what we meant. But it’s a blood-bath nonetheless, as Flutter, the owners of Paddy Power, Betfair and Sky Bet, this side of The Pond; the Stars Group in Canada and sportsbook market leader FanDuel in the United States, attempts to ride out the varied fiscal storms of change building on the horizon.
The staff shedding comes after an internal review that foresees major financial challenges in 2022, and no doubt beyond – all thrown into flux, if not super-charged, by the continued delay of the crucial parliamentary White Paper on Britain’s creaky 2005 Gambling Act.
British prime ministerial misdemeanours mean that anticipated reform has now been pushed back even further.
Flutter, like most of us, expected publication of the Gambling Review in May, at the latest. And they tried to get ahead of the game well before by unilaterally tightening their own safe gambling protocols in 2021. These, among other measures, included banning deposits by credit card in its native Irish market and launching a trial of £10 limits on online slot stakes in the UK.
The gaming Omni-channel followed up by introducing mandatory deposit limits for all customers aged under 25-years-old and tying staff bonuses to hitting safer gambling targets.
The kick-back came in March this year when Flutter reported that the group’s full-year 2021 earnings–before interest, tax, depreciation and amortisation–totalled £1 billion (US$1.21bn/€1.19bn), down 18.6 per cent, year-on-year.
Net profit for 2021 was £746 million (US$907.76m/€888.69m), a drop of almost 25 per cent.
The fall was credited to the company’s efforts to reduce the number of its high-rolling customers in the UK, and tighter gambling regulation in Germany and the Netherlands.
Massive marketing spend on Flutter’s US golden child FanDuel also played a significant part, a manifestation of the adage “you’ve got to spend money, to make money”.
Now, it’s not just UK and Ireland CEO Conor Grant but staff who are going to pay the price for Flutter’s financial flat-lining.
“There are some people whose roles are directly impacted. [But] it doesn’t mean that they will automatically be leaving the business,” the company said in a statement.
“However, should our proposals be accepted, some people will unfortunately leave the business. This does not diminish the contribution that they have made in their time with us, or our appreciation for all their hard work.
“While we have sought to minimise the impact this will have on our colleagues, with most employees affected being redeployed into alternative or newly created roles, the proposals may lead to a small number of job losses.”
Now where have we heard such words of comfort before?