Gambling Giant Flutter Shelves FanDuel US Listing until 2022

Irish gambling powerhouse Flutter Entertainment is believed to have stalled plans to spin out and float US sports betting operator FanDuel until 2022 amid managerial changes and a legal row with Rupert Murdoch’s Fox Corporation.

Flutter, whose other major brands include Paddy Power, PokerStars, and Sky Bet, first said it was mulling a listing of FanDuel in mid-March.

The company noted at the time that it was considering floating a “small shareholding” in its US sports wagering operation on the New York Stock Exchange, but no final decision had been made. Sources told The Telegraph that the move would value the sportsbook and daily fantasy sports operator at approximately $18 billion.

Flutter made that announcement following reports that it was pressed by frustrated investors to consider different options to unlock greater shareholder value and capitalize on the fast-growing US sports betting market.

The Irish gambling giant in mid-May announced the departure of FanDuel’s CEO, Matt King. Flutter said at that time that King stepping down would affect the timing of any potential share listing, but the option was still under consideration. The company did not present timing specifics.

Mr. King is expected to surrender his role at the sports betting operator in the next few weeks and to work with the Ricketts family – US businessman Tom Ricketts, owner of the Chicago Cubs, and his son, Joseph Ricketts, founder of Ameritrade.

Flutter aims to have placed a successor on the FanDuel CEO chair by the fall.

The Fox Legal Dispute

Flutter is also currently locked in a legal dispute with media giant Fox Corporation over the exercise price of an option deal for the purchase of an 18.6% stake in FanDuel.

Fox filed in late March a lawsuit against the gambling firm in New York’s Judicial Arbitration and Mediation Services over the price of the stake it has rights to acquire.

Flutter combined with FanDuel in 2018 as it sought to tap into the nascent US sports betting market after the Supreme Court struck down a long-standing federal ban on the practice earlier that year.

Late last year, the company announced that it has exercised an option to buy a 37.2% stake in the sports betting operator ahead of a previously agreed July 2023 schedule. Flutter paid $4.18 billion for that stake to raise its holding in FanDuel to 95%. US casino operator Boyd Gaming holds the remaining 5%.

Flutter enlisted Fox to help get the transaction through and offered it an option to buy 18.6% of FanDuel in July 2021. Fox wants to acquire the stake for the same price Flutter paid for it, but the gambling firm argues the two parties had agreed the transaction to take place at a fair market value.

According to sources, Flutter will not be able to float FanDuel until its legal battle with the media company is resolved, a claim that the company’s CEO, Peter Jackson has denied.

Source: Gambling giant Flutter delays £13bn FanDuel float until next year, The Telegraph, July 11, 2021