FanDuel Heading for Separate IPO from Flutter

FanDuel is about to get it is own IPO after it was revealed a majority of Flutter Entertainment shareholders are in favour of the move.

A survey showed that as many as 75 per cent of shareholders were ready for opening the online gambling subsidiary to market investment in the US so that it became a company in its own right.

The final seal of approval for the trading is expected to be given via a proxy vote, at Flutter Entertainment’s AGM on 28 April. Flutter management – the global leader when it comes to online betting – have had their eye on the FanDuel IPO since as far back as 2001. They have always wanted to launch the business in the US as a separate entity. But the legal side proved difficult to navigate at times. For instance, if the deal does go ahead approval will be necessary with both Dublin and London exchanges and securities laws.

Should FanDuel’s share deal go ahead, it means the company will already have half of America’s sports betting market. Promisingly, that makes it the market leader in the segment – even bigger than DraftKing (DKNG).

More than that though, it also gives the Irish-based Flutter Entertainment, entry into the US market and where it can then add further offerings to the online gaming market.

One banker recently commented on the desirability of FanDuel’s shares.

“Look you would have a market leader, not previously available as a pure play per se. If these guys are right—and the numbers are pointing that way—that they will turn profitable by the end of this year—you have the makings for major institutional buy in combined with the retail allure currently enjoyed by DKNG.”

Research carried out by the American Gaming Association (AGA) recently showed that more than 146m American adults (57 per cent of the population) can legally bet on sports due to laws being passed in the state in which they live. This is another pointer for a successful FanDuel trading entry.

The share price isn’t known to date but the New York courts have already valued FanDuel at $22bn. That’s because an arbitration panel was asked to oversee a dispute between Flutter entertainment and Fox. Back in 2020 the latter acquired an option to buy 18.6 per cent of FanDuel for $2.1bn. But when it went to exercise its right three years later FanDuel’s shares had risen and a judge ruled Fox had to pay $3.7b for the same number of shares.