Last week, the interim results for H1 2020 were released by Flutter. This is the first financials released by the brand after its recent tie-up with The Stars Group. The information is quite detailed and hints at the possibility that PokerStars may offer more rewards and promotions in the future.
Details of the Report
The Flutter company was created in 2016 when Paddy Power and Betfair merged. By 2018, the company acquired FanDuel and has moved into several areas of the US to offer gambling services. Now that Flutter has combined with The Stars Group, there reach is only extended further. They are now the largest gaming company in the world and gave insight into what they offer during a recent presentation.
Combined revenues came in at $3.2 million during the first six months of this year. This is an increase of 22% when considering the first six months of 2019. While PokerStars is a dominant brand in the poker segment, they only accounted for 19% of the H1 revenue for Flutter.
The United States remains a minor market for Flutter, accounting for only 12% of the total revenues. The brand is looking to expand further in the future within the US.
As mentioned, the report hints at the potential for players to see more rewards from PokerStars. Peter Jackson, the CEO of Flutter, used parts of the presentation to talk about the direction PokerStars will go in the future. Jackson stated that PokerStars has been deprived of proper levels of investment.
PokerStars has shown that they spend 14% of revenues on marketing and promotions. Competitors like GVC, 888 and Kindred spend around 25%. As far as profits are concerned, PokerStars is keeping 49% while its competitors are averaging around 23% in net profits. Basically, PokerStars is lacking when it comes to promotions and marketing when compared to other top online poker brands.
Jackson commented further that the generosity of PokerStars towards customers has reduced significantly over the past five years. The reduction was deliberate in order to enhance the poker ecosystem as well as grow liquidity.
The CEO said the changes were effective but there is an important balance that needs to be met when developing a business long-term. Jackson indicated that PokerStars will increase its spending on marketing.
Jackson pointed out that customer perception of PokerStars lags behind competitors in several jurisdictions. Flutter wants to work to address this and invest in the product and customer experience to remain competitive in the market.
What the rewards or marketing will be is anyone’s guess. However, players in the US should have some idea as to what will be on offer based on international changes. PokerStars is notorious for changing up its site in Europe or Italy before moving on to other regions. However, the brand may decide to be transparent and offer full details on upcoming incentives or promotion programs they plan to offer in the future. We will continue to follow the news and report on any new details as they are made available.