The £7B ($9.26B) merger of Paddy Power and Betfair "has started to pay off" after the combined company said that cost savings "would be achieved a year ahead of schedule and be greater than initially forecast," according to Nic Fildes of the FINANCIAL TIMES. However, the tie-up, completed in February, "has dragged the combined gambling business to a substantial pre-tax loss" of £49.3M ($65.2M) in its first half, as it "bore the brunt" of £195M ($258M) merger costs. It said on Wednesday that underlying earnings rose 31% year-on-year in the six months to June 30 to £181M ($239.4M), despite the group increasing its marketing spend by 31%, or £37M ($49M). The gaming industry "suffered heavy losses at the Cheltenham Festival," but CEO Breon Corcoran said that the European football championships helped it make up lost ground, with the England team and eventual winner Portugal "drawing a lot of matches, results that benefited the bookmakers." He said, "Draws may not be good to watch, but they are good for the business." The Australian arm of Paddy Power Betfair suffered a "shock" during the half as greyhound racing was banned in New South Wales. Adverse sports results in the local market "also contributed" to a 10% drop in earnings in Australia during the first half. Corcoran said that he did not expect the "contagion" of the dog racing ban to hit other states but added that the outlook for the Australian market was "a bit bumpy" due to the uncertain regulatory regime (FT, 8/24).
