Flutter mulls FanDuel IPO options against fierce US competition   

By | March 15, 2021

Flutter Entertainment has disclosed that it is weighing up options to list a ‘small shareholding’ of FanDuel on a US stock exchange as a means to accelerate its North American market profile.

This weekend, the FTSE100 betting group released a statement detailing that it was evaluating its capital structure in order to help the company achieve its long-term growth objectives.

“Options including the listing in the US of a small shareholding in FanDuel are being considered but no decision has been made at this time. Should a decision be made to proceed with a listing in due course, an announcement will be made as appropriate.” Flutter’s statement read.

Leading its post-PASPA US market drive, in 2018 Flutter acquired a 58% stake in FanDuel – transforming the daily fantasy sports operator into its main US wagering property.

Achieving its early market objectives, last December Flutter increased its shareholding in FanDuel to 95%, having agreed a $4 billion settlement with ‘FastBall INC’ – the conglomerate formed by FanDuel’s venture capital investors.

Flutter stated that it had made its disclosure in response to media speculation regarding FanDuel pursuing a spin-off IPO as a means to strengthen its relationship with FOX Sports, the brand’s strategic US wagering partner.

March’s publishing of FTSE gambling results saw Flutter become the leading US online gambling operator increasing its US revenues by 81% to $970 million – with Flutter CEO Peter Jackson declaring to investors that FanDuel was ‘40% larger than its closest competitor in DraftKings’.

Yet, FanDuel’s growth came with the division recording $237 million EBITDA loss, spending $480 million on sales and marketing costs alone.

Flutter aims to strengthen its FOX Sports partnership, as FTSE rivals Entain Plc and William Hill deepen their respective partnerships MGM Resorts and Caesars Entertainment.

As part of its strategic partnership, FOX Sports maintains the option to acquire an 18.5% stake in Fanduel this July.