FanDuel Parent Flutter Evaluating New York Listing

Posted on: February 14, 2023, 02:31h. 

Last updated on: February 15, 2023, 01:44h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Global gaming giant Flutter Entertainment (OTC: PDYPY) is considering listing its shares in New York as the company’s US business thrives.

Flutter US Listing
The Flutter logo as seen in an investor deck. The company is considering listing its shares in the US. (Image: Flutter Entertainment)

Dublin-based Flutter owns 95% of FanDuel, the largest online sportsbook in the US. In a statement issued by its investor relations department on Tuesday, Flutter highlighted the increasing importance of FanDuel and the potential benefits of listing in the US.

This trend is expected to continue, with FanDuel becoming the Group’s largest business by revenue and an ever-greater proportion of its overall value,” according to the statement. “In this context, the Board has reached a preliminary view that an additional US listing of Flutter’s ordinary shares will yield a number of long-term strategic and capital market benefits.”

Flutter shares currently trade in the US, but on an over-the-counter basis, meaning the audience of both professional and retail investors in the states engaged with the stock isn’t as large as it would be if the name traded on the Nasdaq or the New York Stock Exchange (NYSE).

In the statement, Flutter doesn’t mention a preferred US listing venue.

Benefits Galore for Flutter in US Listing

Currently, the Betfair, Sky Bet, and Paddy Power owner is a member of the FTSE 100 Index, which is the most widely observed gauge of UK stocks. It is also one of the biggest components in the MSCI All Capped Ireland Index.

Impressive points, to be sure. But both lack the advantages and cache of listing in the US. As mentioned in the statement, Flutter’s board believes by listing its shares in the US, the operator will boost its profile in this country, enhance the stock’s overall liquidity, and be better able to attract top-tier US staffers.

There are other clear benefits to a US listing. In addition to broadening its investor base by trading on the Nasdaq or NYSE, Flutter would gain more access to deeper capital markets. Translation: a US share listing would enable the gaming company to sell shares more easily for cash, or tap debt markets if need be.

Plus, if the company eventually shifts its primary listing to the US — a point mentioned in the statement — that move could position it for inclusion in various widely followed equity indexes. Should that happen, Flutter stock would be more widely held by active and passive fund managers that benchmark to the gauges in which the shares are included.

Flutter US Listing Could Affect FanDuel Spinoff

While it’s clear that FanDuel is an increasingly valuable piece of the broader Flutter puzzle, the Irish company made clear that its US listing plan will take priority over a potential spinoff of FanDuel.

The Group (board) expects to start this consultation immediately. In the event that there is broad shareholder support for an additional US listing, this would take precedence over any plans to list a small shareholding in FanDuel,” as noted in the statement.

Rumors regarding such a transaction are long-running. But with FanDuel’s revenue forecast to grow by up to 500% in the coming years, that unit is likely to become the biggest contributor to Flutter’s top line. That could be a sign Flutter would be reluctant to part ways with FanDuel.