Flutter, the parent company of FanDuel, has made its debut on the New York Stock Exchange (NYSE), providing U.S. investors with an alternative to DraftKings, the biggest player in the sports betting market. Despite retaining its primary listing on the London Stock Exchange (LSE) and inclusion in the FTSE 100 index, Flutter sees the United States as its key market for revenue and growth. While FanDuel outperforms its competitors, DraftKings receives more attention in earned media due to its status as the only publicly traded pure play in sports betting.
By listing on the NYSE, Flutter aims to tap into deeper capital markets while increasing accessibility for U.S. investors. This move signifies a new chapter in the history of the Flutter Group, as stated by Flutter CEO Peter Jackson. Jefferies, a financial services company, believes that this listing could act as a short-term catalyst for Flutter, projecting a 20% premium to DraftKings’ valuation due to FanDuel’s sustained market share outperformance. Jefferies thereby implies a bullish price target of £210 per share, considering Flutter’s current trading price of £163 per share in London.
Despite DraftKings’ soaring stock price and media attention, FanDuel maintains an impressive market share in the United States. Based on gross revenue, FanDuel commanded a 43% market share in the fourth quarter, rising to 51% based on net revenue. However, DraftKings is not the only rival posing a threat to FanDuel. Competitors such as BetMGM, Caesars Sportsbook, ESPN Bet (owned by Penn Entertainment), and Fanatics Sportsbook (led by former FanDuel CEO Matt King) are all determined to chip away at FanDuel and DraftKings’ dominance.
While DraftKings has experienced significant momentum and reached all-time highs in stock price, it has struggled to post profits. In contrast, some competitors, although failing to gain substantial market share, have achieved profitability in certain quarters. For instance, BetMGM witnessed a decline in its market leader status in iGaming, with DraftKings and FanDuel surpassing it. Jefferies estimates that the total addressable market for the sports betting industry in the United States is worth $37.5 billion.
FanDuel CEO Amy Howe acknowledges the importance of scale and having a distinctive product in this highly competitive industry. The company is prepared to take on its well-capitalized competitors while leveraging its existing market position. With Flutter’s listing on the NYSE, the company seeks to capitalize on capital market opportunities and further strengthen FanDuel’s position as a leader in the U.S. sports betting market.
To minimize regulatory complexity, Flutter plans to delist its shares from trading on the Euronext Dublin, although it will remain incorporated in Ireland for tax purposes. This change in listing renders Flutter ineligible for inclusion on the Euro Stoxx 50 index. Nevertheless, Flutter’s expansion into the U.S. market is expected to drive its future growth, offering investors an attractive opportunity to participate in the rapidly evolving sports betting landscape.
Flutter’s secondary listing on the NYSE marks a significant milestone in the company’s history and provides U.S. investors with an alternative to DraftKings. With FanDuel’s strong market share and Flutter’s ambitious growth plans, the competition in the U.S. sports betting market is poised to intensify. As the industry continues to grow and evolve, investors will closely watch the performance and strategic moves of both FanDuel and DraftKings as they vie for dominance in this lucrative sector.
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