Flutter a Parent of FanDuel Considers Listing on the NASDAQ After Record Super Bowl Results

The parent company of FanDuel, Flutter Entertainment, said Tuesday that it may consider listing on a U.S. stock exchange.

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In order to gauge the interest of shareholders in the company, the board is consulting with them.

Two days after a record-breaking Super Bowl for betting, this development comes as no surprise. As the game progressed, FanDuel reported accepting 50,000 bets per second at its peak, with an average of 2 million users active on the platform throughout the game.

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The company reports that it is on track for full-year profitability in 2023, despite the fact that it is the nation's leading sports betting provider. As the largest segment of Flutter's overall business, its $3 billion in annual revenue makes up the largest part of the company's income. There are also two other gambling platforms owned by the company, which are well-known internationally - Paddy Power and Betfair.

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In addition to having its headquarters in Ireland, Flutter also has its stock listed in Europe. There is also the possibility that a U.S. listing could expose Flutter to new American investors. The analysts at Jefferies said the company would command a premium price for its stock since it is expected to be a leader in the global online gambling market.

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The company said that an additional listing in the U.S. would elevate its brand and be able to help it attract and retain talented individuals. It was said that a listing would provide liquidity to investors and give them access to a wider range of capital markets.

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“When DraftKings was trading near its all-time highs, Flutter shareholders put considerable pressure on the company to spin off FanDuel via a U.S. IPO,” said Lloyd Danzig, managing partner of Sharp Alpha Advisors, “the market seemed to be placing a premium multiple on a digital gaming business based in the United States.”

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There was speculation over a FanDuel IPO cooling down as valuations and multiples plummeted at the end of last year. According to Jeffrey Kamys, the chief investment strategist for the iBet ETF, the decline hit a lot of gaming companies that were lumped into the same category as DraftKings that were hurt by the decline. Nevertheless, he predicted that if FanDuel was able to go public, it would have a positive effect on the entire sports betting industry as a whole.

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"FanDuel would be the Apple of our industry," Kamys said in the interview. “If they were to go public, it would be our number one holding.”

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Peter Jackson, CEO of Flutter, was asked about a possible FanDuel IPO in November. Retail engagement and involvement were higher in U.S. markets, he said. “We consider that one of the benefits that DraftKings has from their listing is the ability to trade their stock for many of their customers."

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The company is considering the “listing of a small stake in the business and it would remain a controlled subsidiary.”

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In light of Tuesday's announcement, it is clear that the parent company is anxious to take advantage of a U.S. public listing, at a time when markets are soaring and capital costs are rising.

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Danzig of Sharp Alpha said, “a U.S. listing would enhance the company's reputation among American investors and allow it to access more capital to support growth initiatives.”

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Flutter expects the United States to grow a lot more in the next few years. By 2030, it is estimated there will be a total addressable market of more than $40 billion. Jefferies estimates that the population of the United States is more than three times larger than the rest of the world.

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The company has been the market share leader in the United States for the past few months. According to Jefferies analyst David Katz, the aim of the endeavor is to get stock credit for that achievement," he told Trade Algo. If Flutter moves forward, he predicts a lift for all stocks in the sports betting industry, as an expression of confidence in the industry that was hammered in 2022, a year of turmoil.

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It is important to note that Flutter has cautioned that its consultation with shareholders is just the beginning. It would be necessary for the company to obtain 75% shareholder support in a vote if it were to move forward.

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