One of the world’s largest gambling companies is set to list in New York on Monday as it continues to capitalize on America’s online sports betting boom.
Flutter Entertainment, owner of FanDuel, has hailed its landing on the New York stock exchange as a “pivotal moment” as its business continues to surge in the United States.
Flutter generated sales of £3.6bn ($4.59bn) in the US last year – up from £191m ($243m) in 2018, when the US supreme court struck down a decades-old law that prohibited sports betting across much of the country.
FanDuel, with rival operators DraftKings and BetMGM, has led the sharp-elbowed race to dominate the nascent US online gambling market.
Listed on the London stock exchange and headquartered in Dublin, Flutter has dropped a second listing in Dublin to join the New York stock exchange: a move designed to boost its profile, and grant it access to more money, in the US.
In a regulatory filing ahead of the switch, Flutter described “a long runway” for future growth – but acknowledged that concerns around problem gambling could “significantly influence” future regulation of its industry, prompt investigations and dissuade people from placing bets.
Sports betting’s liberalization across the US has been so transformative for Flutter that its chief executive, Peter Jackson, has floated making May 18 – the day of the supreme court decision – a company holiday. It agreed to acquire a controlling stake in FanDuel just days after the 2018 ruling.
Five years ago, the group (then known as Paddy Power Betfair) relied on the US for about 10% of its business; by last year, the market was responsible for almost 40% of its sales.
While sports betting is now legal in 36 states and Washington DC, major states including Texas have yet to follow. Flutter is confident they will. California voters rejected the prospect in 2022, but the company described “multiple ongoing initiatives” to change the state’s stance in its filing. “The expectation is that legalized sports betting will be back on the ballot in the near future.”
Wall Street is bullish, too. Online gambling is a “hyper growth industry” in the US, said Joe Stauff, an analyst at Susquehanna, a trading firm. “FanDuel has a huge competitive advantage.”
“It’s crazy,” added Mike Hickey of Benchmark, an investment bank. “It’s just getting started … It’s going to be a massive market in the US.”
But Flutter noted in the filing that “social responsibility concerns” could “significantly influence the regulation of online betting and iGaming and impact responsible gaming requirements, could result in investigations and litigation, and may adversely impact our reputation.”
The industry claims to already be highly regulated. It has pushed back hard against proposals in Congress to ban gambling advertising in the US and divert tax receipts from sports wagers towards problem gambling treatment programs.
“As markets mature, usually regulation follows,” said Hickey. “Regulation is always a concern, for sure. And it’s going to happen.”