Flutter Considers IPO Options For FanDuel In The Face Of Fierce Competition

Flutter Entertainment has revealed that it is considering listing a “small shareholding” in FanDuel on a US stock exchange as a way to boost its business profile in North America.

The FTSE100 betting group issued a statement this weekend stating that it was reviewing its financial structure in order to help the firm meet its long-term growth goals.

The statement read: “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 purchased a 58 percent interest in FanDuel in 2018 as part of its post-PASPA US business push, converting the daily fantasy sports company into its largest US wagering domain.

Increased shareholding

Flutter raised its shareholding in FanDuel to 95 percent last December after reaching an agreement with ‘FastBall INC,’ the conglomerate founded by FanDuel’s venture capital investors, for a $4 billion settlement.

Flutter said it made the announcement in response to media reports that FanDuel was considering a spin-off IPO as a way to improve its partnership with FOX Sports, the brand’s strategic US wagering partner.

Flutter became the leading US online gaming operator after reporting FTSE gambling results in March, raising its US sales by 81 percent to $970 million, with Flutter CEO Peter Jackson telling investors that FanDuel was “40 percent larger than its closest competitor in DraftKings.”

Despite this, FanDuel’s expansion came at a premium, with the division losing $237 million in EBITDA and spending $480 million on sales and marketing alone.

As FTSE rivals Entain Plc and William Hill expand their respective relationships with MGM Resorts and Caesars Entertainment, Flutter aims to enhance its FOX Sports relationship.

FOX Sports will have the option to buy an 18.5 percent interest in FanDuel this July as part of the strategic agreement, up from its current 2.5 percent stake in Flutter’s US wagering asset.