FanDuel Success Drives Flutter To Seek Primary Listing On NYSE

FanDuel parent company Flutter Entertainment Plc FLUT plans to switch its primary listing from London to New York.

What Happened: Dublin-based Flutter asked shareholders on Monday to vote on May 1 to approve a shift in its primary listing to the U.S.

The goal is to capitalize on its fast-growing U.S. market by attracting new retail investors.

The company, which acquired FanDuel in 2018, is the world’s largest online gambling group by market cap. It already has a secondary listing on the New York Stock Exchange (NYSE), where ordinary shares were listed in January.

FanDuel — part of a portfolio that includes Paddy Power, PokerStars, Sky Betting & Gaming, and Sportsbet and Betfair — is considered the leading online sports betting brand in the U.S.

It surpassed DraftKings Inc DKNG as well as MGM Resorts International MGM and Entain plc‘s GMVHY BetMGM.

Jackson boasted to the Financial Times about the shareholder vote: “We have FanDuel, and we want to make sure that our customers are able to buy shares in the company that owns their favourite entertainment provider.”

Noting the importance of retail investors in the U.S., he added: “Once they see some reporting in US GAAP, these are the codes and the language they understand. We hope that will facilitate new investors into Flutter.”

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“As anticipated, our number one position in the US has transformed the Group's earnings profile during 2023 as FanDuel delivered a positive U.S. full-year adjusted EBITDA for the first time,” Flutter CEO Peter Jackson said on March 28 after releasing an earnings report.

It then tantalized investors with a post on X on the same day: “FanDuel is the number-one online sportsbook and the number-one iGaming brand in the U.S. — and we've a plan to keep winning.”

Why It Matters: Established online betting companies such as Flutter and Entain have capitalized well from the exponential growth of the U.S. market since the 2018 Supreme Court ruling that ended a federal ban on sports betting.

Since then, 29 U.S. states, including most recently North Carolina, allow online gambling. Grand View Research shows it has grown into a $12 billion-a-year industry. It is expected to grow by an annual rate of 12% between 2024-2030.

Flutter and DraftKings are the largest two holdings in the Roundhill Sports Betting & iGaming BETZ exchange-traded fund (ETF), which has gained 3.3% so far in 2024. Flutter’s U.S.-listed shares are up 10.3% over the same period, while DraftKings is up 28.8%.

Flutter’s switch from the London Stock Exchange to the NYSE underscores a larger trend. More companies are seeking to tap capital from a greater array of potential investors with noticeably deeper pockets.

But mainly it is symptomatic of many U.K. companies finding lucrative trading opportunities in the U.S.

Building materials group CRH plc, which announced its primary listing switch from London to New York in June 2023, derives most of its revenue from North America.

“We see significant benefits by representing ourselves to be truly an American company — 75% of our earnings are in the U.S.,” CEO Albert Manifold said at the time.

Oil giant Shell plc was also contemplating a similar move. The valuation gap between the oil company and its U.S. rivals, Exxon Mobil and Chevron, grew.

Ultimately, Shell ditched its Netherlands listing and focused on its London headquarters, although it retains a U.S. secondary listing.

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