FanDuel, a subsidiary of Flutter Entertainment, has made its debut on the New York Stock Exchange, presenting American investors with an alternative to the dominant player in the sports betting market, DraftKings. While Flutter retains its primary listing on the London Stock Exchange and its inclusion in the FTSE 100 index, the company recognizes that the United States is their most crucial market for revenue and growth, with FanDuel leading the way in market share. In the fourth quarter alone, FanDuel commanded a 43% market share based on gross revenue and an impressive 51% based on net revenue. Despite outperforming competitors, FanDuel often finds itself overshadowed by DraftKings, the prominent and the only publicly traded pure play in the sports betting industry, which has experienced a staggering 150% surge in its shares over the past year. Eager to secure some of the limelight and capital for FanDuel, Flutter has decided to list its shares on the NYSE under the ticker symbol FLUT. Flutter CEO Peter Jackson stated, “The additional listing will enable us to access deeper capital markets as well as making Flutter more accessible to U.S. investors and marks a new chapter in the history of the Flutter Group.”
Flutter Poses a Challenge
Analyst James Wheatcroft of Jefferies believes that Flutter’s NYSE listing could act as a short-term catalyst for the company. Wheatcroft assumes a 20% premium to DraftKings’ valuation due to FanDuel’s sustained market share outperformance. Consequently, he implies a price target of £210, while Flutter currently trades at £163 per share in London. Although DraftKings surged after going public via a SPAC in April 2020, hitting an all-time intraday high of $74.38 on March 22, 2021, it has failed to match FanDuel’s profitability. Other competitors in the market have managed to achieve profitability during specific quarters but struggle to gain substantial market share. For instance, BetMGM, co-owned by MGM Resorts International and Entain, has seen its leadership in iGaming slip as both DraftKings and FanDuel overtake it. Similarly, Caesars Sportsbook, Penn Entertainment’s ESPN Bet, and Michael Rubin’s Fanatics Sportsbook, led by former FanDuel CEO Matt King, are determined to capture market share from both DraftKings and FanDuel.
According to Jefferies, the United States sports betting industry represents a staggering $37.5 billion total addressable market, indicating ample room for FanDuel to thrive and expand its operations. FanDuel CEO Amy Howe emphasized the company’s readiness to take on well-capitalized competitors during an interview with CNBC in October at the Global Gaming Expo in Las Vegas. She affirmed, “We know the scale is going to matter. And we know that having the most distinctive product is going to matter.” As FanDuel continues to develop and enhance its offerings, it aims to tap into the immense potential of the American sports betting market.
To simplify regulatory complexities, Flutter intends to delist its shares from trading on the Euronext Dublin. However, it will remain incorporated in Ireland for tax purposes. This move will unfortunately make Flutter ineligible for inclusion on the Euro Stoxx 50 index. Nevertheless, Flutter’s decision to prioritize its presence in the American market showcases its long-term commitment and dedication to establishing FanDuel as a leading player in the U.S. sports betting industry.
FanDuel’s ascension highlights its potential to become a serious competitor within the sports betting industry. With its strong market share and strategic positioning, it has the ability to capture a significant portion of the lucrative U.S. market. As the company continues to innovate and prioritize user experience, it is well-positioned to excel in this thriving industry. Furthermore, Flutter’s listing on the NYSE will not only attract new investors but also allow the company to access deeper capital markets and further fuel its growth. FanDuel’s trajectory is undoubtedly promising, and it will be fascinating to witness how it challenges the dominance of DraftKings and solidifies its position as a powerhouse in the sports betting landscape.
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