In its earnings report for the 2017 calendar year, Paddy Power Betfair reports a 13% increase in revenue from its United States-based advance-deposit wagering outlet TVG.
Paddy Power Betfair said that growth at TVG allowed its U.S. division to contribute £4 million ($5.56 million) of adjusted earnings to the company in 2017. The Betfair online casino in New Jersey also contributed to those earnings.
The company said that promotions and a contest helped drive a successful year at TVG, which also operates a racing channel that the company said reaches 45 million homes.
"Revenue growth at TVG was driven by continued investment in product and marketing, including the introduction of money-back specials to the US horse racing market and our unique free-to-play TVG Super 8 Contest," Paddy Power Betfair said.
The company reported that while both TVG and the Betfair casino delivered profits, its U.S. daily fantasy sports operation, DRAFT, which was established in May 2017; and its U.S. Betfair Exchange Wagering platform available in New Jersey and established in May 2016; both lost money. But the company said the losses, approximately $208,000, are part of start-up costs and it expects similar performance in 2018.
While the company sees plenty of potential in both the betting exchange—especially if more states can be added—and the daily fantasy sports platforms, as well as opportunity for continued growth at TVG and the online casino; it notes that all of the businesses provide a strong position should the U.S. lift restrictions on sports wagering. A Supreme Court decision that could come as early as this month could pave the way for expanded sports wagering.
"While our existing businesses are attractive in their own right, they also position the group well if positive regulatory change results in the market opening for sports betting," Paddy Power Betfair reported. "In light of this, we are considering the appropriate way that we would participate in the market."
Overall the sports book and exchange wagering company that also operates in the United Kingdom and Australia reported a 19% increase in operating profit to £392 million ($545 million).
"Our scale, leading customer propositions, and strong balance sheet mean we are well-positioned ahead of the regulatory and fiscal changes expected in the UK, Australia, and the USA," said the company's chief executive Peter Jackson. "Our strengths in operating efficiently and responsibly will enable us to build a business that can generate shareholder returns over the long term."