Last updated: February 19, 2023
Flutter, the parent company of the nation’s largest sportsbook, FanDuel, is said to be in discussions with its shareholders about the possibility of listing the company on the US stock exchange in light of FanDuel raking in more than 50,000 bets a minute over the two-day Super Bowl period.
FanDuel claimed that the platform had close to 2 million active users during the game, and the company is already well on the way to hitting its annual profitability targets in 2023. While Flutter also owns Betfair and Paddy Power, FanDuel alone is said to make up the lion’s share of revenues, which were over $3 billion in 2022 and projected to reach up to $14 billion by 2030.
Though the sportsbook is estimated to make up over 42% of the entire US sports betting market, Flutter’s stocks are only traded in Europe at this time. If it were to list on the US stock exchange, the company would have more exposure to investors in America, which is a move that would make them a “market leader in the larger global online gambling market,” according to Jefferies analysts.
Flutter said it believes that the US listing would also help the company retain talent while boosting the company brand and attracting further investor interest through the capital markets.
“When DraftKings was trading near its all-time highs, there was significant pressure from Flutter shareholders to spin off FanDuel in a US IPO,” said managing partner of Sharp Alpha Advisors, Lloyd Danzig. “To take advantage of the premium multiple that it appeared the market was placing on a US-based digital gaming business,” he concluded.
The rumors of a FanDuel IPO died down as valuations and multiples fell.
Chief investment strategist for the iBet ETF, Jeffrey Kamys, said the downhill slump harmed many gaming companies that got corralled with DraftKings but now believes the sports betting industry as a whole will recover if FanDuel gets a public listing.
“FanDuel would be the Apple of our industry,” said Kamys. “It would be our top holding if they went public.”
During a Manhattan meeting with investors back in November, the CEO of Flutter, Peter Jackson, was probed about FanDuel having a potential IPO in the US markets. His response was that the US was more engaged and had a larger scope for retail involvement than the London stock exchange. “It is one of the things that we consider when we look at the benefits that DraftKings have from their listing is that they have got a lot of their customers able to trade their stock.”
He also mentioned that Flutter was considering whether a “listing of a small stake in the business would remain a controlled subsidiary.”
The announcement on Tuesday clearly indicates that Flutter is looking to take advantage of a public listing in the US, particularly with the elevated cost of capital and the heating up of the markets.
Danzig claimed that “a US listing is a perfectly sensible way to increase the company’s stature among US investors and provide more robust access to capital to support growth initiatives.”
Flutter emphasized that the shareholders’ consultation is only the first stage. A unanimous vote of 75% would be required before the company can move forward.
Marilyn Chavez is an associate researcher at the Missouri University of Science and Technology, where she studied the mathematical probabilities and aspects of casino games like slot machines. She’s written several case studies which have been published by multiple problem-gaming institutions to help spread awareness about the dangers of online gambling and gambling addiction. She also presented a 2019 Ted talk on the topic of gambling among minors.
