Flutter Entertainment Remove CEO Peter Jackson Amid Concerning Q2 Results

Flutter Entertainment will bid farewell to its current CEO, Peter Jackson, in the wake of its latest upheaval.

After unveiling its Q2 results during an earnings and conference call yesterday, the gambling behemoth behind Paddy Power, Betfair, and Sky Bet, confirmed there will be a CEO transition.

Jackson will leave Flutter at the end of next month, and he will be replaced by Dan Taylor, who is expected to start his new role on October 1.

End of an era for Jackson

Jackson’s contributions haven’t gone unnoticed. Having taken over as Paddy Power’s CEO in January 2018, he oversaw the growth of one of the world’s largest gambling companies, which included the merger with Sky Bet owner Stars Group. In May, Jackson took on a new role that centred on turning around the struggling US arm of the business.

According to Flutter Chairman John Bryant, Jackson was responsible for increasing the company’s revenues more than eight-fold during his tenure to nearly £11 billion. Bryant reserved special praise for Jackson, noting he can leave the company with “gold medal positions around the world”.

Jackson, who intends to stay on as a Flutter advisor until the end of the year to help with the smooth CEO transition, delivered a poignant parting message. In a statement, he said:

“It has been such a privilege to lead Flutter’s transformation, and I am incredibly proud of what we have achieved over nearly nine years.

“Having worked closely with Dan for many years, I have seen first-hand his ability to grow businesses, build strong teams and deliver exceptional results. I leave with great confidence in Dan, the leadership team and the Company’s future.”

Investor optimism quashed

News of Jackson’s departure came amid a series of disconcerting Q2 results for Flutter. During the earnings call, the group confirmed a net loss of £220 million, a stark contrast to the £27.5 million profit posted for the same corresponding period last year. Meanwhile, International adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA) dropped by 19%.

Add into the mix that the company reduced its full-year guidance for revenue by 2%, and this gives a clearer indication of the challenge facing Flutter.

UK revenue growth stifled

Although the Q2 results suggested robust revenue growth of 4% in the UK & Ireland (UKI), which was partly aided by a strong start to the World Cup, there is no escaping the elephant in the room — gambling taxes.

The hike in remote gambling duty (RGD) paid on online casino bets was bumped up from 21% to 40% of gross gambling yield (GGY) in April this year, while general betting duty paid on online sports bets will rise from 15% of GGY to 25% in April 2027, with horseracing exempt. Undeniably, the stringent regulatory burdens placed in the UK mean no operator will be immune to the changes.

Facing the music

Perhaps what has been most telling was Flutter’s financial results were posted just a couple of days after the company formally delisted from the London Stock Exchange (LSE).

Trading yesterday morning provided some worrying signs as the company’s share price crashed by 10.5% on the New York Stock Exchange (NYSE).

Although there has been a mass exodus of companies leaving the LSE over the past few months, Flutter must navigate through some choppy waters. And the incoming CEO will need to use all his experience and financial nous to ensure a brighter future lies ahead.