Flutter Entertainment recently made waves in the finance industry with the announcement of a potential dual listing for its shares in New York. This move comes as the company evaluates its listing structure and aims to position itself strategically to deliver value for its shareholders.
The company’s Capital Markets Day in New York emphasized the growing importance of its subsidiary, FanDuel, which is becoming Flutter’s largest revenue generator and a significant part of its overall value. In light of this, the board preliminarily believes that an additional US listing for Flutter’s ordinary shares will bring long-term strategic and capital market benefits. These include enhancing the group’s profile in the US, attracting and retaining US talent, accessing deeper capital markets and new US investors, increasing liquidity in Flutter shares, and potentially pursuing a primary US listing in the future.
The company’s annual results underscore the rising prominence of its US operations. FanDuel has achieved a 50% market share in the fourth quarter and a 21% share in igaming. It is also the number one sportsbook in 15 out of 18 states, with impressive market positions even in the remaining states. Despite investments made ahead of market launches in Maryland and Ohio, FanDuel reported positive quarterly earnings. Flutter’s US revenue reached £2.6bn, a 67% year-on-year increase, with an EBITDA loss of £250m, aligning with previous guidance. The company projects that FanDuel will be EBITDA-positive for the entire year of 2023.
Chief executive Peter Jackson highlighted FanDuel’s advantages in customer acquisition and revenue generation, expressing confidence in its future growth. This performance sets the stage for a potential dual listing in the US, which some analysts suggest could lead to New York becoming Flutter’s primary listing in the future.
While Flutter’s US prospects are promising, it remains a global gambling entity with significant profits. In 2021, it achieved £1.62bn in EBITDA. Despite regulatory measures affecting the UK and Ireland business, it still generated £2.14bn in revenue. Australia contributed £1.26bn, and the international business, including the recent Sisal acquisition, produced £1.68bn in revenues. These established operations have provided both momentum and profitability to support the growth of the US business.
Industry experts recognize FanDuel’s advantage and the difficulty for disruptors to challenge Flutter’s market share without significant changes to their customer propositions. While a primary US listing appears likely, it is important to acknowledge that New York will gain a global betting operator of unparalleled scale and reach, while London will experience the loss of such an influential player. This development has implications for the entire sector, from established companies to new entrants.
