There’s big news in the entertainment industry as the Irish entertainment company Flutter stall the float of American gambling company FanDuel to 2022. In this article, you will learn everything you need to know about the relationship between Flutter and FanDuel, how things have gone so far and the future of the proposed float.
Who are Flutter and FanDuel?
Flutter is an Irish entertainment and bookmaking holding company founded on February 2016 following a merger between Paddy Power and Betfair. The holding company operates a range of international brands which include PokerStars, Sky Bet, Betfair, Paddy Power, Sportsbet FOX Bet, TVG, Adjarabet as well as Fan Duel.
Established in July 2009, FanDuel and headquartered in New York City, USA, FanDuel was acquired by Flutter, coming in from the wake of the Professional and Amateur Sports Protection Act of 1992 being declared unconstitutional in America by the Supreme Court. This move by the government allowed states across the US to now choose if they would legalise sports betting in their region, with many choosing to do so (the first being Delaware and New Jersey). FanDuel began as a daily fantasy sports operator but as a result of the change in 2018, it moved into the online betting space.
Why Flutter is so important to Ireland
Flutter is a particularly important brand to Ireland as Ireland is the brands home base. Gambling, including online gambling – is a widely popular entertainment activity in the country.
In 2019 for example, Irish players gambled approximately £9.8 billion in 2019. The most common forms of gambling in the country include sports betting, casino games and lotteries. A report produced in February 2019 by the Department of Health showed that two-thirds of the population in Ireland gambled over the past year, with lottery tickets and scratch cards being some of the most common ways to play. Gambling online was most common in the 25–34-year-old demographic closely followed by 18–24-year-olds.
Online casino gaming across Ireland continues to be a popular activity for people of all adult age groups across the country. The rise of mobile phone gaming and usage has meant the Irish are heading online to play their favourite casino games rather than at a land-based venue. The variety of online casinos available in Ireland is also large with many operators offering different signing-up bonuses to attract new players.
The change in US laws and the benefits
It was in 2018 that sports betting became an option for states across the US, after the 1992 law was overturned by the Supreme Court. Many states took initial action to allow sports betting to operate, while others took longer to follow. Sports betting is now legal in more than two dozen states, although many of them have only in-person sports betting as opposed to online. The benefits, which include job growth and money being funded into the local economy and government, have encouraged more states to follow suite of those who had embraced the move right away back in 2018.
Of course, companies like Flutter saw the opportunity to get a slice of an exciting new market in the US. With so much experience operating brands within the UK, Ireland and beyond, Flutter felt this was the prime time to take advantage of the US gambling and entertainment marketplace which has begun to boom over the past few years as more states have legalised sports betting.
The first investment of Flutter into FanDuel happened in 2018 when it acquired control of the company — a deal worth a reported $465 million with Flutter getting a 57.8 percent stake. In 2020, they increased its stake in the fantasy sports and online betting company in a move which valued the firm at $11.22 billion.
News of the float
Another big move for the company happened in 2021 when Flutter first considered listing part of FanDuel to take advantage of investor demand for stocks. In December of the year prior, Flutter had increased its majority stake in FanDuel to 95% — however the media group Fox Sports had a 2.5 percent stake in the business with an option to increase it to 21 per cent which could complicate measures.
But news has come of late to reportedly stall its planned spin-out and float until 2022. This follows then news that FanDuel will soon see the exit of its chief executive Matt King, while locked in a legal dispute with Fox Corporation owned by Rupert Murdoch. These combined have resulted in the float having to be stalled.
Fox is currently in a legal dispute with Flutter because of an exercise price of an option delay for a 18.6% stake in the business. Experts believe Flutter will not be able to float while the legal battle is ongoing. The announcement of Matt King’s departure also will affect the timing of any US listing — with King being expected to work with the Rickets family.
Will the float happen in 2022?
Flutter would hope so. But only time will tell how much Matt King’s exit from FanDuel as well as the legal battle with the Murdoch family will affect the company’s ability to float in 2022. Either way, it will be interesting to see how things play out over the next year.