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LONDON, March 5 (Reuters) - Online gambling company Betfair hiked its full-year profit forecast range on Thursday after trading remained strong following a better-than-expected third-quarter, sending its shares sharply higher.
The company, which runs an exchange that allows gamblers to bet against each other, said revenue jumped 20 percent in the three months to Jan. 31, as investment in products and marketing helped increase active customer numbers by half in its core markets, with sports and gaming income up strongly.
Third-quarter core earnings rose 17 percent to 23.6 million pounds ($36 million), 36 percent ahead of analysts' average forecast of 17.4 million, despite a 7 million pound hit from a new UK tax on profits from bets made by its British-based customers.
Its shares, up 60 percent in a year, rose 10.2 percent to 1969 pence in early trade as Betfair said 2014-15 core profit would be between 113 million pounds and 118 million, up from a previous range of 97 to 103 million.
"Betfair achieved a total shareholder return of around 50 percent in 2014 against the traditional bookmakers, which were all in negative territory. We expect this outperformance to continue," analysts at brokerage Jefferies said, raising their core profit estimate by 15 percent to 116 million pounds.
While traditional bookmakers such as William Hill and Ladbrokes have been hurt by regulatory and gaming machine issues, Betfair's lack of retail outlets means it is relatively unscathed. Like all rivals it does have to contend with new online taxes, however.
Betfair said momentum had continued into its fourth quarter, which includes the key Cheltenham horse racing festival, and expected record levels of betting on the UK general election.
