Paddy Power Betfair chief downplays prospects for US sports betting
Breon Corcoran says he is “less bullish than most” on online betting prospects
Paddy Power Betfair (PPB) chief executive Breon Corcoran has played down the prospects for legalized US sports betting in the near future.
Speaking yesterday on the firm’s Q3 earnings call, Corcoran said PPB was “probably less bullish on sports betting than most people we speak to or whose analysis we read”.
“There’s an awful long way to go from where we are today to a framework for sports betting that is acceptable for offshore operators,” he added.
“It relies on many things including the repeal of the law, the acceptance of that by states, then some kind of online resolution. The way Draft is going, we can acquire customers that we couldn’t through the horse racing business, but we still think sports betting is a long way away.”
The comments surprised analysts who have suggested PPB acquired DFS operator Draft, in part, to build a database of sports customers ahead of the market potentially opening up.
PPB was also rumored to be in the hunt to buy Nevada sportsbook operator CG Technology.
Despite the firm’s bearish outlook, CFO Alex Gersh did say the company had enough strength on the balance sheet (approx. £125m cash on hand) to invest heavily should the market open up.
On the same call, PPB reported that Draft had incurred start-up losses in the quarter of £8m and is expected to account for a FY EBITDA loss of £15m.
CFO Alex Gersh refused to give revenue figures, saying they were immaterial.
However Corcoran did say he was pleased with the firm’s progress, having grown from 10 staff at the time of the acquisition to around 30 now.
He added: “The NFL product is much improved the season and, we are learning about cross-sell with basketball. The marketing is working in places, with refinement needed in some other places. Overall we’d give it a solid tick. It’s still a very small business but we’re happy with the progress so far.”