The boom market of US sports betting is leading Flutter Entertainment to a consider a FanDuel stock listing on Wall Street.
US investors would get easy access to another public sports betting company if Flutter spins off FanDuel Sportsbook on a US exchange.
The company confirmed to multiple media outlets it is considering a “small shareholding in FanDuel” for a US listing. That statement came after a CNBC report Friday stating a spinoff was a possibility.
FanDuel Sportsbook is the No. 1 operator in US market share, followed by DraftKings Sportsbook. DraftKings has drawn plenty of US investor attention since it went public through a reverse merger last year.
DraftKings stock was valued at less than $18 when the DraftKings merger completed and closed Friday at a 52-week high of $71.75.
FanDuel mostly owned by Flutter
Flutter would not have to give up a ton of stake in FanDuel to make the US listing happen, but it likely doesn’t want to give up too much either.
Flutter owns 95% of FanDuel after buying another 37% of the company from private equity investors for $4.2 billion in December. Market-access partner Boyd Gaming owns the other 5%.
Fox took part in Flutter’s equity raise to buy that remaining 37% stake in FanDuel last year. That gives Fox the option to buy 18.5% of FanDuel at market value this July. That would drag Flutter’s stake down to 76.5% if Fox buys the maximum stake allowed.
The initial CNBC report hedged on a spinoff happening:
A separation of FanDuel isn’t assured or imminent, said the people, who asked not to be named because the discussions are private. FanDuel is Flutter’s crown jewel, which may spur Flutter CEO Peter Jackson to keep it.
Comparing FanDuel stock to DraftKings
When DraftKings went public, it was one of the only ways true ways to invest in the US online gaming market.
There are now other options including:
- Golden Nugget
- Rush Street Interactive
- Score Media
DraftKings, of course, made headlines for massive losses in 2020 as it maintained a top US operator spot. It lost nearly $400 million in adjusted EBITDA last year after spending $500 million on sales and marketing.
Flutter spent $484 million on sales and marketing in the US last year but only reported an adjusted EBITDA loss of $237 million for its US segment.
Unlike DraftKings, that’s not the end of Flutter’s business. the company reported overall adjusted EBITDA of $1.2 billion last year. It owns a wide variety of companies in the gaming and entertainment space throughout the world.
Flutter is listed on the London Stock Exchange where its shares closed Monday at £168.75 ($234.71 US.)