Last updated: May 02, 2024
FanDuel, the leading U.S. online sportsbook, spends $71 million on a Beverly Hills office despite betting limitations in California. The hefty price, quadruple the market rate, prompts speculation about the move’s significance amidst a slow office real estate market. While California’s betting future remains uncertain, FanDuel’s strategic acquisition aligns with its TVG cable channel in Los Angeles.
The biggest American online sportsbook operator, FanDuel, recently invested $71 million in a new office in Beverly Hills, California.
Still, the state does not allow iGaming or sports betting, and it may be some time before that changes. Paying $1,410 per square foot, FanDuel purchased a three-story, 50,200-square-foot building at 9000 Wilshire Boulevard. That’s more than four times what the going rate in Southern California is for commercial real estate, according to some estimates. That’s a hefty price tag, perhaps, given the current slowdown in the office real estate market in the area.
Because of the ongoing lack of leasing activity and rising vacancy rates, it is anticipated that the Los Angeles office market will continue to be slow. There are still some positive signs, as evidenced by Kidder Matthews’s research, such as government agencies in Los Angeles renting out large blocks of office space.
It’s unclear how many employees FanDuel will have at its Beverly Hills location just yet.
There’s a good chance that online sports betting will be legalized in California at some point, but it might take a few years, and since tribes control the state’s casino business, online casinos are probably not going to be successful there either.
That is to say, it is unlikely that FanDuel’s new Beverly Hills properties are a sign that the operator will start accepting wagers in the state soon. Gaming companies have been known to keep their corporate offices in states where they do not accept bets. As an illustration, DraftKings, which does not provide daily fantasy sports (DFS) or sports betting in Nevada, opened a new office in Las Vegas last year.
Since FanDuel’s TVG cable channel is based in Los Angeles, the company’s new Beverly Hills location makes sense.
According to its website, the gaming company currently has 15 job openings in Los Angeles, several of which are related to TVG and none of which are directly related to betting.
FanDuel paid a hefty price for the Beverly Hills property, according to recent data from NAI Capital, which shows Los Angeles County office sales fell 42% in 2023 while the average price paid per square foot fell 41% to $295.
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Skanska, a Swedish developer who paid $18.2 million for the property in 2019, probably made a tidy profit on the deal. FanDuel paid $71 million for the property, so Skanska probably made a tidy profit even after replacing two buildings there.
It is anticipated that FanDuel will have turned a profit for the whole year 2023, making it the first sportsbook operator in the United States to do so. The parent company, Flutter Entertainment (OTC: PDYPY), plans to list its shares later this month on the NYSE, the New York Stock Exchange.
Susan is a verified gambling support specialist who has helped thousands of problem gamblers get back on their feet through therapy and financial counseling. She’s also worked as a cage manager in four Las Vegas casinos and spent two years in Macau in her 30s, where she became extremely savvy at Sic Bo and other Asian table games. Her knowledge and expertise have and continue to play a priceless part in how we structure our content, particularly when it comes to game guides and casino reviews.
