Paddy Power bets on Italy as online gambling leads to record fiscal year

ONLINE sales drastically boosted Paddy Power last year, leading the Irish gaming company to report a 16 per cent rise in pre-tax profits to €121.2m (£101m), with adjusted earnings per share up 26 per cent, better than the 15-20 per cent growth forecast in November.

Global online operating profit reached €97.1m for Paddy Power, a 26 per cent rise on 2010, boosted by a 50 per cent increase in active online customers in the UK.

Online now accounts for 81 per cent of the group’s €119.5m operating profit, up from 74 per cent.

Chief financial officer Jack Massey told City A.M. that the company has mobile to thank for its record year, despite the lack of a major sporting tournament.

Mobile is the firm’s “key growth area”, which attracts half of Paddy’s online users and where net revenue grew 299 per cent to €43m.

The Irish bookmaker, known for its controversial advertising, also has plans to expand to Italy with an initial investment of around €6m.

Massey said: “Italy is the biggest market in Europe for betting and gaming but quite small online – if around nine per cent of the global gambling market is online, less than six per cent of Italy’s gambling activity is online.

“The UK is way ahead of the market – over 20 per cent of its gambling is online,” he added.

Paddy Power will open its Italian doors in May, ahead of the Euro football championships that are expected to be a significant revenue booster this year.

The gambling group took the opportunity to speak out against Mary Portas’ high street review, which would see betting shops classed separately from other stores, saying it would hamper competition and job creation without a proper body of evidence.