Flutter Acquires More of FanDuel Sportsbook
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Flutter Entertainment is going all-in on FanDuel this week by purchasing an additional 37.2% stake in the sports betting company. This brings Flutter’s stake in FanDuel to 95%, and the purchase is worth $4.2 billion.
Boyd Gaming will retain the final 5% of FanDuel.
Peter Jackson, Flutter chief executive, said, “Our number one position in the crucial US market is built on many of the assets we acquired through that transaction, supported by the broader group’s capabilities.”
The deal is significant for the U.S. betting industry and Flutter Entertainment as it allows Flutter to own one of the largest sportsbooks in the U.S. This is going to be a lucrative long-term deal Flutter is making by going all-in with FanDuel.
Details of the Acquisition
Flutter Entertainment originally owned just under 58% of FanDuel before this recent purchase. Flutter also had an opportunity to purchase the additional 37% stake in 2018 but balked at the idea until this week.
The U.K. entertainment company is also on record saying that FanDuel is worth an estimated $11 billion. This is $9 billion less than rival DraftKings. Flutter views FanDuel as one of the largest sports betting operators in the U.S., which is why the company’s additional purchase felt needed.
What is interesting about Flutter’s equity raise was that Fox Sports was in the mix and has a chance to purchase a portion of FanDuel. In July 2021, Fox Sports will have the opportunity to purchase 18.5% of FanDuel at a fair-market price.
Fox CEO Lachlan Murdoch explained that it is important to maintain a relationship with Flutter and capitalize on the U.S. betting market expansion.
What Does this Mean for FanDuel?
FanDuel’s parent company has a much larger share in the pot now that the acquisition is being processed. This should help out FanDuel over the long-term to capture the U.S. market at a quicker pace with a company like Flutter overseeing operations.
FanDuel is now worth over $11 billion, and this could be a great opportunity for Flutter to list the sports betting operator on the New York Stock Exchange. DraftKings went public in the summer of 2019, and its price is now hovering just over $50 a share. Its IPO price was $9.80 before seeing a huge growth in 2020.
The company going public would huge for business and could also help its U.S. expansion. Over half the states in the U.S., and Washington D.C., have legal sports betting, and FanDuel will do anything possible to make sure that it gets its hand in every state.
The betting operator currently has mobile operations in eight U.S. states and will look to add more over the next year.
At the end of the day, this move gave FanDuel a great leap forward in sports betting. It can become public, like rival DraftKings, and stay on pace with its competitors to try and match the number of states both sportsbooks are operating in.
Fox Sports potentially having a hand in the pot is an interesting mix. Still, FanDuel will need to celebrate the deal coming its way, with Flutter acquiring an additional 37% of the sports betting operator.
