Dublin-based Flutter Entertainment, a global online-gambling company, is set to make its debut on the New York Stock Exchange (NYSE). Flutter, which owns popular websites like FanDuel, Sportsbet, PokerStars, and Paddy Power, had previously been listed on the London Stock Exchange.
The company recently applied to the Securities and Exchange Commission to list its shares on the NYSE in the first quarter of fiscal 2024. This move comes as Flutter aims to tap into the vast potential of the U.S. market and provide retail consumers with easier access to its stock.
CEO Peter Jackson expressed optimism about the listing, stating that it would enable Flutter to leverage the deep and liquid capital markets in the United States, bringing significant benefits to the group. Additionally, Flutter believes that a U.S. listing will facilitate easier investment in the company for U.S. investors compared to Europe.
Currently, there are limited options available for U.S. traders looking to invest in online sports betting companies. While Penn Entertainment sold Barstool Sports back to founder Dave Portnoy, industry leaders in U.S. online sports betting include Flutter and DraftKings. Walt Disney’s ESPN unit also sold the ESPN trademark to Penn Entertainment, while Caesars Entertainment and MGM Resorts International have their own sportsbooks.
The upcoming NYSE listing is expected to attract enthusiasts of both football and investing, providing them with a new opportunity to participate in Flutter Entertainment’s success.
Flutter vs. DraftKings: Battling for Market Leadership
Both Flutter and DraftKings are engaged in a fierce battle for market-share leadership. In a November 3rd conference call, DraftKings proudly announced that it had achieved the number-one spot in combined online sports betting and iGaming gross gaming revenue share in the U.S. Meanwhile, Flutter’s third-quarter conference call revealed that FanDuel, their gaming brand, is experiencing rapid growth and has secured the number two position in the U.S. market.
DraftKings chose not to comment when requested.
DraftKings stock has experienced a phenomenal year, with a 208% gain thus far in 2023. Additionally, their monthly unique players saw a substantial 40% increase in the third quarter compared to the previous year, alongside an increase in average revenue per monthly unique player.
On the other hand, Flutter, with its global business reach beyond FanDuel, has seen a modest 9% growth in stock value in 2023. However, on Thursday, the stock experienced a significant 10% decline, marking its largest drop since March 2022. The dip followed Flutter’s announcement that full-year profits had fallen from the previous year despite an increase in revenue.
Flutter’s third-quarter revenue of £2.04 billion fell short of Wall Street expectations of £2.18 billion, attributed to weakness in international segments, particularly in Australia. However, their U.S. revenue and monthly users showed strength and growth, bolstering confidence in the FanDuel product.
While anticipating potential weakness in the near-term as results are fully analyzed, BTIG analyst Clark Lampen believes that the current valuation presents an intriguing opportunity based on expected improvement in FanDuel performance and a positive outlook for their U.S. operations. Lampen rates Flutter ADRs as a Buy with a price target of £177.
Furthermore, Lampen suggests that Flutter’s NYSE listing will likely attract increased investor interest, leading to improved share-price performance over the next few quarters.