Flutter Entertainment Responds to FanDuel IPO Rumours

Speculation is now surrounding Flutter Entertainment. It faces market rumors about FanDuel, one of the Flutters’ crown jewels, which is also its vehicle for expansion into the U.S. legal online casino and sports betting markets. It appears that Flutter is now looking to take FanDuel public, where an IPO (Initial Public Offering) will allow more investors to become owners of one of the country’s iconic entertainment brands.

No confirmation has been made, but neither denies the public listing of the FanDuel sportsbook, and Daily Fantasy Sports (DFS) provider will happen. However, the U.K.-based Flutter Entertainment comments that a move may be considered. This would give U.S. investors and residents easy access to another public betting operator on the U.S. stock exchange.

FanDuel US Market Leader

Launched in 2018, FanDuel has become one of the first-rate choices for anyone betting on sports online. The company recreated fantasy sports in 2019 by giving American sports fans how to play one-day fantasy sports for real money. Alongside competitor DraftKings, FanDuel is still regarded as the top DFS operator in the U.S. and beyond.

For more information, check the BestAppBet full review of FanDuel.

Flutter Entertainment Responds

In a press call speaking with analysts last week, a Flutter spokesperson commented: “The ongoing press speculation in respect to the possible IPO of the Group’s U.S. business, FanDuel. As a company, we regularly assess its structure to evaluate how to situate itself to deliver upon group strategy.”

“There are a variety of options currently being explored. Including the listing of a small shareholding in FanDuel, but there is no decision currently. If this is the direction chosen, there will be an announcement in due course.”

Investing in FanDuel

In December, Flutter increased its investment in FanDuel sportsbook to 95% following a $4.2bn deal. This was made public when speculations about the IPO became clear. The group now has an estimated 40% share within the U.S. market. It estimates over $19.4bn of business created by 2025 due to more states legalizing sports betting.

Regardless of the decision, Flutter will not want to give up a considerable amount of its stake; however, it won’t have to make this happen.

This also affects other invested parties such as Fox Sports, who currently own 2.5% of Flutter and could buy another 18.5% investment in FanDuel in July. It also has a 10-year option which allows it to buy half the Stars Group’s U.S. business, another company owned by Flutter. All of this may complicate and delay the IPO.

Investors who wish to remain anonymous have voiced their irritation at the discount Flutter is trading at compared to DraftKings, especially as FanDuel online gambling is considered a relatively large U.S. operator. Many viewed the buying of the additional stake in December as to allow an eventual IPO.

DraftKings’ market capitalization is currently more than $28 billion. In 2020, DraftKings took $644 million in revenue. It predicts there will be between $900 million and $1 billion in 2021.

Currently trading on the London Stock Exchange, Flutter Entertainment has a market capitalization of around $39 billion. This works out as less than 40% higher, regardless of FanDuel reporting $967 million in 2020 revenue. It is 50% higher and doesn’t include the group’s other assets. With a 40% market share, FanDuel sportsbook has claimed to be the U.S. sports gambling market leader.

Currently trading on the London Stock Exchange, Flutter Entertainment’s market capitalization is valued at around $39 billion. With a 40% market share in the U.S., FanDuel sportsbook has claims to be one of the U.S. sports betting market leaders.

This IPO could become a reality at a very critical time for sports betting within the U.S., whereas 19 states are set to decide on legalizing online and land-based sports betting. These states also include Texas and New York.

Comparing FanDuel to DraftKings

Competing with FanDuel since its inception is another DFS-turned-sportsbook DraftKings. Although DraftKings was in the market before FanDuel and was considered to have a slight lead, it reported considerable losses in 2020. However, DraftKings is still maintaining one of the top U.S. operator’s spots. The losses amounted to nearly $400 million in corrected EBITDA after a $500 million spent on sales and marketing.

On the other hand, Flutter spent $484 million on its sales and marketing but reported a loss of $237 million within the U.S. segment. The difference being that Flutter also has a wide variety of other companies and reported an EBITDA of $1.2 billion last year. Best App Bet has put together a list of great betting apps regardless of losses and financials.

Summary

The IPO is still the only speculation at this point. FanDuel still offers a fantastic array of gambling options on all of its sites, including those in Virginia, Michigan, Indiana, Iowa, New Hampshire, New Jersey, Pennsylvania, West Virginia, Tennessee, Illinois, and Colorado.

You don’t have to be a resident of the state to place your bets on FanDuel; the perfect option for anyone visiting these states is over 21 and has access to a mobile device.