Flutter Entertainment, a well-established player in the global betting and gaming market, is set to finalize the relocation of its primary stock market listing to the New York Stock Exchange (NYSE) by the end of May. The decision was formalized during the company’s Annual General Meeting (AGM), where shareholders approved the move as a strategic response to the company’s growth and the evolving dynamics of international markets.
This transition to the NYSE is part of a broader pattern observed by the UK financial media, wherein several public companies have chosen to transfer their primary listings from London to New York. Flutter officially commenced trading on the NYSE in January, securing the ticker FLUT amid substantial buzz. This step was preceded by an announcement in December detailing their intent to have the shares listed by January 29, 2024.
In the perspective of market analysts, Flutter’s move signifies a pivotal development for investment in sports betting within the United States. Commenting on the significance, H2 Gambling Capital senior analyst, Ed Birkin, viewed it as a logical step for companies seeking higher valuations that are traditionally associated with US-listed stocks.
FanDuel, owned by Flutter, provides the company a powerful foothold in the US market, carrying with it considerable value. Birkin noted that, apart from DraftKings, there are limited avenues for US investors to significantly engage with the burgeoning US online sports wagering or iGaming market, making Flutter’s offering, with its substantial exposure, particularly attractive to investors.
As of now, only seven US states have rolled out iGaming. Birkin remarks that when most of a company’s revenue and profits originate from a particular market, it is prudent to align the listing location with where the higher evaluations and increased liquidity can be found, guiding such a strategic move.
Moreover, the access to larger liquidity pools in the US market presents promising prospects. Birkin added that listing on the NYSE undoubtedly paves the way to a broader investor pool. For Flutter, capturing investment is integral to the corporate ambition of bolstering market leadership.
A critical factor for Flutter would be gaining further ground in the US iGaming space as regulation unfolds, mirroring the developmental trends seen in the UK market post-2010. Paddy Power and William Hill, both integrated within Flutter’s history, have successfully leveraged sports betting to pave the way for iGaming to flourish in the UK market. Birkin predicts FanDuel will adopt a similar strategy, asserting the importance of maintaining leadership in sports wagering while also ramping up their then marginal share in the iGaming market, leveraging the advantages that come with scale.
Flutter’s progression towards the NYSE listing also coincides with the robust health of its financials. The group’s revenue surged 24.7% to $11.79 billion in 2023. According to preliminary results released in January, the success was largely propelled by US operations driven by FanDuel, which, as touted by Flutter CEO Peter Jackson, secured a commanding position in the US market, achieving positive annual adjusted EBITDA for the first time in 2023.
Moreover, Flutter anticipates a prosperous 2024, with forecasts of double-digit growth in both group revenue and adjusted EBITDA. The outlook report issued in March 2024 projects an increase of 17.5% in revenue and 30.2% in adjusted EBITDA.
A closer look at its 2023 segment performance reveals that the company’s US revenue of $4.48 billion led by a wide margin, marking a 40.6% increase from the previous year. In terms of market share of net gaming revenue, it stood at 53.4% in the US, up from 43.2% in 2022. Notably, FanDuel acquired over 3.7 million new betting and iGaming players in 2023, marking a significant 19.0% increase from the year prior.
In conclusion, the forthcoming switch to the NYSE for Flutter reflects a juxtaposition of growth ambitions, market dynamics, and investor appeal, positioning the company to leverage opportunities in an increasingly digital and globalized gaming industry.
