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Betting group Flutter wants to turn its fast-growing US customer base into shareholders, as the owner of Paddy Power prepares to move its main listing from London to New York.
The company, whose FanDuel business has a leading market share in the United States, listed its common shares on the New York Stock Exchange as part of a secondary listing in January. It will ask shareholders in a May 1 vote to approve its plans to move its main listing there by the end of that month.
“We have FanDuel and we want to make sure our customers are able to buy shares of the company that owns their favorite entertainment provider,” Chief Executive Peter Jackson told the Financial Times, adding that retail investors are “important constituents of the US market”. market”.
He noted that there are many U.S. investors, including institutional shareholders, who “invest only in their home market.”
US retail investors can already buy Flutter shares thanks to the January listing, but Jackson hopes the primary listing change will encourage them to do so, as the group has started reporting under the GAAP rules it is familiar with.
“Once they see some reporting in US GAAP, these are the codes and language they understand. We hope this facilitates new investors in Flutter,” she said.
The move to main listing in the United States would also allow the company to meet the criteria for potential inclusion in the S&P 500 index, he added.
Sports betting in the United States has boomed after a 2018 U.S. Supreme Court ruling struck down a federal ban with industry revenue reaching $10.9 billion last year, according to the American Gaming Association, just as regulators tighten controls in more established European markets.
Ireland-based Flutter, which acquired a majority stake in FanDuel in 2018 and raised its share to 95% two years later, now has a dominant position in the market despite stiff competition.
It reported a 53% share of net sports gaming revenue in the country last year, up from 50% the year before, outpacing rivals such as DraftKings. Flutter’s US business also posted its first annual profit last year.
Flutter shares have risen nearly 20% over the past six months, fueled by investor enthusiasm over FanDuel’s growth forecast and proposed primary listing in the United States.
However, Peel Hunt analyst Ivor Jones said the brand’s high popularity would not automatically mean more retail investors,
“You can see [FanDuel’s] brand everywhere, advertises at the Super Bowl and is clearly a local hero. . . But retail investors behave more or less like institutional investors. They buy good companies where they expect growth. So they’re not really influenced by whether it’s a company that they know personally,” she said.
Flutter expects U.S. profits to triple this year to between $635 million and $785 million. It reported a net loss of $1.2 billion for 2023, partly held back by a brand-related write-down of its PokerStars online casino brand.
Flutter plans to maintain a secondary listing in London, after deleting its Irish listing. Jackson said current shareholders, including those in the UK, are “supportive” of moving the company’s main listing to New York.
“Higher levels of stock trading occur for the same market capitalization [in the New York market] compared to the London market,” Jackson said.