FanDuel’s parent company, Flutter Entertainment, is already listed on the London and Dublin exchanges, but a move to the U.S. stock market signals a big move for the world’s largest sports betting and gaming operator.
Save the Date
By the time Flutter makes its appearance on the U.S. financial markets, scheduled for January 29, 2024, it will be listed only on the London Exchange, as the company is terminating its listing on the Dublin Exchange on January 23rd.
This announcement is not a surprise as Flutter discussed the possibility in February, fueled by its attendance at the Capital Markets Day in New York three months earlier before the company shared its future goals on its website:
“The capital markets day held in New York on 16 November 2022 highlighted the growing importance of FanDuel to the Group as a whole. This trend is expected to continue, with FanDuel becoming the Group’s largest business by revenue and an ever-greater proportion of its overall value.
“In this context, the Board has reached a preliminary view that an additional US listing of Flutter’s ordinary shares will yield a number of long-term strategic and capital market benefits.”
The Benefits
Flutter articulated the benefits of going public on the U.S. Stock Exchange by listing the following reasons:
- Enhancing the Group’s profile in the US;
- Better enabling the recruitment and retention of US talent;
- Giving the Group access to much deeper capital markets and to new US domestic investors;
- Providing greater overall liquidity in Flutter shares;
- The optionality to pursue, as a second step, a primary US listing – one of the criteria for access to important US indices.
To highlight the vast volume difference between the London and New York exchanges, following Flutter’s third-quarter earnings call, its volume on the former was north of 750,000, while DraftKings’ volume on the latter was 48.2 million on the day of its earnings call.
Flutter projects FanDuel to reach $180 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2023 on $4.7 billion in revenue and according to Flutter CEO Peter Jackson, he expects a “ramp in profit” for 2024, which will lead to robust trading in its inaugural year on the NYSE.
On the third quarter earnings call, Jackson said, “FanDuel will be the first operator to deliver full-year profitability, and our continued high level of investment in player acquisition at compelling returns will drive a ramp in profit into 2024 and beyond.”
California Market
The golden goose of the domestic sports betting market is California, but the tribal nations have pushed back on several attempts to get mobile gaming bills passed. It is reported they spent upwards of $250 million to defeat previous proposals and they were successful as sports betting did not get approved by the Golden State voters.
FanDuel President Christian Genetski has hinted that there still might be hope as long as there is fulsome support by the gaming tribes.
“I don’t want to go into too much detail about all the conversations we had along the way but suffice it to say it was not always a fait accompli that the large tribal casinos in California were going to oppose mobile sports betting,” said Genetski.
