A few days ago, the shares of the largest UK gambling operator reached record highs, at a time when it has revealed that it is considering a possible stock market listing for part of its assets in the US.
Flutter Entertainment shared that it could spin off a small part of its shareholding of FanDuel – an announcement that shot its stock up 6.8% that estimated the company at almost £30 billion. This basically means that the assets’ value has increased threefold in the last 12 months.
Reportedly, Flutter Entertainment, which currently owns some of the largest sportsbook brands in the UK – Paddy Power, Betfair and Skybet – has managed to benefit from the coronavirus pandemic outbreak because millions of customers preferred to start betting online at a time when the retail gambling sector was inoperable as lockdown measures forced companies to shut their betting shops around the country.
FanDuel started operation as a daily fantasy sports operator, with Flutter Entertainment making its first investment in the company in 2018. In December 2020, the British gambling operator spent £3.2 billion to boost its stake in FanDuel from 57.8% to 95%. Now, a spokesperson for Flutter Entertainment shared that the gambling operator evaluates its capital and organisational structure on a regular basis in order to make an assessment of the best options to position itself on the market and capitalise on its market strategy.
Flutter Entertainment and Other UK Gambling Firms Aim at Caspitalising on US Betting Assets
Recently, the group has considered various options to best position itself in the sector, including the listing of a small shareholding in FanDuel in the US, but it has not made a final decision yet. In any case, the largest UK gambling operator is willing to get the most of its presence on the rapidly expanding US sports betting market.
The 2018 decision of the US Supreme Court to lift the federal ban that had not allowed sports betting to be legally offered on the territory of the country has encouraged UK gambling companies, especially the largest four of them, to make a push and get a chunk of the newly-open US betting sector, which is expected to get even larger in the months and years to come, as 19 more states are set to decide whether to make sports betting legal or not by the end of 2021.
As reported by Flutter Entertainment itself, the company currently holds 40% of the US sports betting market. In 2020, it generated US gross gambling revenue of £790 million. On the other hand, FanDuel reported 2020 revenues amounting to £694 million.
The total gambling market in the US is expected to surpass the breathtaking £14 billion by 2025, which means it will get larger than the existing gaming and sports betting market in the UK. The projected growth will probably make it even more attractive to British gambling companies that are trying to capitalise on assets outside their domestic gambling market in order to deal with the stricter regulatory regime there.
- Author
Olivia Cole
