Flutter Entertainment plc is a sports betting and gaming operator consisting of a large portfolio of premier international brands such as Paddy Power, Betfair, Sportsbet, and FanDule. The now FTSE 100 company began when Paddy Power opened for business with 42 shops in Ireland by merging three local bookmaker chains. Paddy Power’s founder David Power stated that, the original reasoning for the three-way merger was to compete with the British bookmakers who had began entering the Irish market. Throughout a series of mergers and acquisitions Flutter has become a behemoth in a market estimated to be worth £345bn (Flutter Entertainment, 2020).
Technology and digitisation has revolutionised the bookmaking industry, 12% of the market is now said to be online (Flutter, 2020). Within Flutter Entertainment’s 2019 annual report they have attributed quality of online products, technological innovation, ongoing smartphone penetration, and consumer migration from traditional retail, as the catalysts for this online transition. Flutter have been at the forefront of the industries digitisation as they continue to foster a culture of technological innovation. Paddy Power was first betting company to launch an online application (2011) whilst Betfair was the first to offer a ‘cash out’ service (2012). These innovations have greatly appealed to consumers, the ease and greater options presented by gambling online have shifted the market to an online space. Although the groups origins lie in traditional brick-and-mortar outlets their current revenue breakdown illustrates the success of their digitisation. In 2019 Paddy Power Betfair (PPB) Online generated at total of 1bn of revenue whilst Sportsbet, their leading online bookmaker in Australia, was accountable for £446m of 2019’s revenues (Flutter.com, 2020). When looking to the proportion of revenues through PPB Retail the figure lies at £312m in 2018. Although their retail presence continues to account for sizeable proportion of company revenues, the strength of their online outlets exemplifies the success in adopting a digital business model.
Flutter Entertainment realise the positive impact that digitisation is making on their business, because of this, they have committed to ensuring the continued investment and research in new innovative technologies. This investment and research is being carried out through their Alpha Hub which they describe as a, “global virtual community of startups, academics, investors and corporate partners, with technologies and ideas that have the potential to positively enhance the sports betting and gaming industry” (Alpha Hub, 2020). Wide and varying technologies have been explored including research into the possible application for AI and Blockchain technologies in the betting industry. In an insight provided by the Alpha Hub AI application areas were explored, with recommendation engines, fraud detection and customer support, all being relevant areas for the industry. Just like targeted advertisements, AI should be able to analyse how individuals bet (e.g. how much, how frequently, what sports, desired return levels) and provide betting specials tailored to the individual. Individuals who aim to launder money may target the gambling industry due to the high transaction frequencies, because of this, anti-money laundering (AML) teams are in place to screen online users; future developments in AI may enable the automation of this process, further mitigating the risk of fraud (Smith, 2019). Flutter understands the benefits of this technology relating to the speed, accuracy, and cost to their organisation.
Technology has been incredibly important to Flutter’s success, but it does create potential problems. Due to the addictive nature of gambling, 24/7 access to a bookmaker or online casino may be detrimental for problem gamblers. In traditional brick and mortar bookmakers’ individuals may have elected to self-exclude themselves from shop whilst trying to recover from their addiction; employees may have also identified individuals with harmful habits and provided necessary assistance. Flutter Entertainment has a strong stance on responsible gambling which includes a strategy of educating, investing and innovating in methods to tackle the problem. Within their Alpha Hub, Flutter have chosen Preamble and Mindway AI as winners of the first Alpha Hub accelerator winners. Preamble is a healthtech startup which provides integrated digital treatment for gambling addiction. Alpha Hub helped with knowledge sharing by outlining the challenges companies, such as themselves, face whilst trying to protect their customers, and also provided mentorship to help shape the product (Lupo, 2019). Mindway AI (2020) explains that it, “Provides a panoramic view of every single gambler trajectory by combining neuroscience, artificial intelligence and expert evaluations, empowering you to truly know your customer.” Both of these start-ups are in line with their responsible gambling strategy.
References:
Flutter.com, 2020 Abailable at https://www.flutter.com/our-business/strategy (05/03/2020)
Creating safe customer journeys with Mindway Solution Suite. (2020). Retrieved 6 March 2020, from https://mindway-ai.com/
London Stock Exchange today welcomes Flutter Entertainment plc. (2020). Retrieved 6 March 2020, from https://www.lseg.com/markets-products-and-services/our-markets/london-stock-exchange/equities-markets/raising-equity-finance/market-open-ceremony/welcome-stories/london-stock-exchange-today-welcomes-flutter-entertainment-plc
Lupu, G. (2020). Pamble journey with Alpha Hub accelerator from idea to MVP. Retrieved 6 March 2020, from https://alphahub.tech/pamble-journey-with-alpha-hub/
PokerGuru – Free Online Poker Games, Best Poker Sites in India. (2020). Retrieved 6 March 2020, from https://pokerguru.co.in/
Smith, R. (2020). Accelerating the Adoption of Artificial Intelligence – Alpha Hub. Retrieved 6 March 2020, from https://alphahub.tech/artificial-intelligence/
Strategy. (2020). Retrieved 6 March 2020, from https://www.flutter.com/our-business/strategy
Colin in a Digital World 
Another great read Colin.
I found it particularly interesting because I had never heard of flutter entertainment before, and I did not realise that there was such a large conglomerate controling so much of the market share behind many of the smaller companies one typically has more contact with.
I suppose this is a trend we are seeing more and more of nowadays; the rise in digital technology is allowing large corporations to reach more people, and control a massive amount of the market As opposed to years ago where there would typically be more smaller companies, usually acting in a more local area.
We can see this patter in the music industry which I covered in my blog post, in the past there were thousands of local music and record shops where people would purchase their music, but now there are fewer physical shops and spotify and apple music largely dominate the music market.
Do you think this is healthy for the industry? and what do you think it does to the culture of a particular industry?
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