A leading sports betting operator received shareholder approval for a secondary U.S. listing, which could give investors more opportunities to own a stake in the market leader. Here’s what the news from Flutter Entertainment PDYPY means for investors and the sports betting sector.
What Happened: Flutter announced last week that the company received shareholder approval for a secondary U.S. listing, which could see shares listed on the New York Stock Exchange or NASDAQ.
Flutter currently trades on the London Stock Exchange and as an OTC stock in the United States.
The company is the owner of popular brands like Betfair, Paddy Power, PokerStars, Sky Betting, Sportsbet and is the majority owner of FanDuel. Flutter Entertainment is also a partner with Fox Corporation FOXFOXA on FoxBet.
A March report from Flutter Entertainment said the company’s FanDuel unit, which Fox also has a stake in, had 50% market share in the United States, which could make the company’s uplisting and a potential IPO of FanDuel catalysts for the stock.
“Flutter Entertainment’s dual listing would allow the company to possibly 'uplist' to a U.S. exchange, providing U.S. investors with another way to gain exposure to one of the industry leaders in sports betting and iGaming outside of an OTC,” Roundhill Investments Chief Strategy Officer Dave Mazza told Benzinga.
Roundhill Investments launched the Roundhill Sports Betting & iGaming ETF BETZ in 2020 as the first pure-play ETF for the sector. Flutter Entertainment is the third-largest holding of the ETF at 6.4% with shares from the London Stock Exchange held in the fund.
“The company operates in the global online gaming market, which we believe has significant potential for future growth. The growth is mainly driven by the ongoing transition from physical to digital platforms, fueled by positive regulatory momentum and increased market penetration,” Mazza added.
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Investment Opportunity: Mazza said that given the success of online gaming in mature markets like the United Kingdom and Sweden, there is “still room for growth and expansion in the online gaming market worldwide.”
A listing on a U.S. exchange could also help the FanDuel parent company increase visibility and gain exposure to investors looking for a way to invest in the sports betting space outside pure-play DraftKings Inc DKNG.
“Owning a majority stake in FanDuel, which has positioned itself as a leader in the U.S. market, is an important aspect of Flutter’s portfolio. While DraftKings may receive more attention due to its U.S.-based origin and trading on a U.S. exchange, Flutter Entertainment’s dual listing might help to increase its exposure among U.S. investors and the broader market,” Mazza said.
What’s Next: In 2022, FanDuel saw revenue increase 27% to $9.19 billion. The company reported a 50% market share in the U.S. sports betting market. Revenue in the US region was $3.2 billion for the company.
The uplisting of Flutter Entertainment could give more opportunities to invest in the parent of FanDuel, and could also lead to a spinoff of the sports betting company down the road.
The sports betting sector eagerly awaits what Flutter Entertainment will do next.
Price Action: Shares of Flutter Entertainment hit new 52-week highs of $101.95 on Monday, with shares up over 90% in the last year and up 45% year-to-date.
Rival DraftKings has seen shares rise 49% in the last year, with 2023 off to a great start with shares up 102%.
The Roundhill Sports Betting & iGaming ETF is up 20% year-to-date thanks to the large gains of DraftKings and Flutter, which are the top holding and third-largest holding respectively.
For more on the sports betting landscape and what could be next for popular betting segments and legislation, tune in to the Benzinga Sports Betting Titans virtual event on May 24. FanDuel Group President Christian Genetski is one of the featured speakers at the event.
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