FanDuel-parent company, Flutter, made its debut on the New York Stock Exchange (NYSE) on Monday, providing U.S. investors with an attractive alternative to the dominant player in the sports betting market, DraftKings. While Flutter already has a primary listing on the London Stock Exchange and is included in the FTSE 100 index, its focus on revenue and growth lies primarily in the United States, where FanDuel is the market leader. In the fourth quarter, FanDuel’s market share based on gross revenue was 43% and 51% based on net revenue, outperforming its competitors. However, despite its success, DraftKings continues to overshadow FanDuel in both media attention and as the only publicly traded pure play in sports betting. With its listing on the NYSE, Flutter aims to claim a share of the glory and capital for FanDuel, as it trades under the ticker symbol FLUT.
The Potential Catalyst for Flutter
Analyst James Wheatcroft from Jefferies sees the NYSE listing as a potential short-term catalyst for Flutter. With FanDuel’s consistent outperformance in market share, Wheatcroft assumes a 20% premium to DraftKings’ valuation and suggests a price target of £210. Currently, Flutter is trading at £163 per share in London. Since its public listing via SPAC in April 2020, DraftKings has experienced significant momentum, reaching an all-time intraday high of $74.38 on March 22, 2021. However, it has struggled to generate profits, lagging behind FanDuel. While other competitors have achieved profitability in certain quarters, they have failed to capture substantial market share. BetMGM, owned by MGM Resorts International and Entain, has lost its market leader status in iGaming to DraftKings and FanDuel. Additionally, Caesars Sportsbook, Penn Entertainment’s ESPN Bet, and Fanatics Sportsbook, led by former FanDuel CEO Matt King, are determined to challenge the dominance of FanDuel and DraftKings.
Jefferies estimates the total addressable market for the sports betting industry in the United States to be $37.5 billion. FanDuel CEO Amy Howe expressed confidence in the company’s ability to compete with well-capitalized rivals, emphasizing the importance of scale and a unique product. As competition intensifies in this rapidly growing industry, companies are vying for market share by offering innovative and distinctive betting experiences to attract a broader customer base.
In an effort to minimize regulatory complexity, Flutter has decided to delist its shares from trading on the Euronext Dublin. However, the company will remain incorporated in Ireland for tax purposes. By opting for the delisting, Flutter will no longer be eligible for inclusion on the Euro Stoxx 50 index, but it allows the company to streamline its operations and focus on expanding its presence in the U.S. market.
Flutter’s secondary listing on the NYSE marks a significant milestone for the company, providing U.S. investors with a fresh opportunity to invest in the rapidly growing sports betting industry. With FanDuel’s strong market share, Flutter aims to challenge DraftKings’ dominance and secure its rightful share of attention and capital. The competition in the industry continues to intensify, with companies striving to differentiate themselves through unique products and scalable operations. As sports betting becomes increasingly popular, the U.S. market presents immense potential for growth and profitability. Only time will tell how Flutter and its competitors will navigate this dynamic landscape and emerge as the true winners in the world of sports betting.
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