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Flutter said Q2 earnings a "material outperformance"

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Guidance raised in both US and other markets

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Investors watching Flutter response to Draftkings ( DKNG ) charge

By Padraic Halpin

DUBLIN, Aug 13 (Reuters) - Flutter

raised its full-year guidance after a much better than expected

second quarter and said it has no plans "at this stage" to

follow rival Draftkings ( DKNG ) in adding a surcharge to

customers' winnings in high-tax U.S. states.

Flutter's U.S. listed shares were 11% higher in

extended trading.

Flutter, the world's largest online betting company, expects

to beat its previous forecast for a jump of around 30% in

full-year core profit thanks to a 17% rise in second-quarter

profit, bookmaker-friendly sports results and third-quarter

momentum.

Flutter's U.S. Fanduel brand and Draftkings ( DKNG ) are by far the

biggest players in the booming U.S. market with a combined share

of around 70% and investors are closely watching Flutter's

response to the charge Draftkings ( DKNG ) plans to roll out from Jan. 1.

Draftkings ( DKNG ) announced the first-of-its-kind U.S. measure this

month - comparing it to similar charges in the hotel or taxi

industry - to offset the cost of operating in states such as New

York, which has a tax rate of 51% on gambling revenues.

Flutter's CEO said the best response to higher taxes, based

on the Dublin-based group's experience in the more established

European market, was to moderate customer offers or reduce local

marketing, as it plans to do in response to recent tax hikes in

Illinois.

"We think that those types of responses is the best customer

option, and we have no plans to introduce a surcharge for

winners at this stage," Peter Jackson said.

While analysts said Draftkings' ( DKNG ) plans could boost cash flow,

they say it also risks losing market share if rivals do not

follow suit. The charge will apply to the four states that

currently tax gaming revenues at 20% or higher.

Flutter said on Tuesday that it now expects full-year core

profit of $680 million to $800 million at Fanduel versus the

$635 million to $785 million seen in March and last year's $167

million, which was its first full year of profitability in the

rapidly growing market.

Core profit of $1.69 billion to $1.85 billion is now seen in

its other markets, which include the Paddy Power and Betfair

brands in Britain and Sportsbet in Australia. That compares to

the $1.63 billion to $1.83 billion forecast previously.