Flutter started trading yesterday (29th January) on the New York Stock Exchange. Ed Birkin is a senior analyst with H2 Gambling Capital. He examines what the move means for this industry.
Flutter’s NYSE listing wasn’t exactly a silent affair. Flutter’s listing on the NYSE was not a quiet affair. A huge Flutter banner and poster were displayed right in front of the exchange to prepare for the official start of trading at 09:30 (14:30 GMT) when Flutter shares began officially trading. The company that owns FanDuel and Sky Betting and Gaming, Paddy Power, and Sky Betting and Gaming, wanted to make a big entrance.
Flutter had announced in December that they were working on listing their shares at the NYSE before 29 January 2024. Birkin says that the listing is a major turning point in sports betting investments in the US.
One of the reasons is that stocks in London are usually valued higher than those listed in America. Flutter is a name that carries a lot of weight.
Birkin says that there are very few ways for US investors, who want to be exposed to growth in the US online gaming or sports betting market, to do so. DraftKings offers the best opportunity. While Flutter doesn’t qualify as a US pureplay online investment, its exposure to the US market is significant and likely to attract investors.
Flutter will benefit from this as it builds its reputation in the US. It already has some foundations, but they are set to reach new heights within the next couple of years.
It makes sense to list your company in a market where you have the most revenues and profits. You can also get better valuations and more liquidity.
The Big Reputation
Investors who are looking for the next great thing to invest in will naturally be attracted by a listing on NYSE.
Birkin explains that “while there are funds who have the capability to direct a part of their investment away from the core area of investment, listing on the NYSE opens the door to many more potential investors.”
Flutter has cemented its position in the US market, which is dominated by a number of big players. Will DraftKings, BetMGM and the rest be shook in their boots by this?
Birkin says, “I do not think this will have a major impact on them. But I don’t believe it is going to be anything positive either.” It could potentially turn some investors’ heads and make FanDuel, DraftKings and other businesses easier to compare.
He says that at the end of it all, the product and the technology offered by a business is more important than its location.
The importance of the product and its technology, along with marketing campaigns and sensible promotions will be far more significant than how each operator appears on the list.
Making an impression on America
This US transition is so important to Flutter that the company has suggested a primary listing at the NYSE. The proposal will be made to the shareholders during Flutter’s AGM 2024 on May 1. The transition may occur during Q2 or 3.
Birkin is concerned that the decision not to prioritize the NYSE will have less of an impact on Flutter than the company had hoped.
He says that the FanDuel and Flutter businesses are already located in the US. “I don’t think they will do this to increase their market share in the US,” he says.
There are advantages to listing in the US. However, their leading market position shows that they have not been hampered by their lack of listing.
Flutter has been able to establish its position in the market by releasing results for 2023, which were just released a little over two weeks ago. Its US performance has been consistently positive, especially in terms of the net gain.
What is Flutter’s ultimate goal?
Flutter’s listing opens up new investment opportunities in the US for 2024.
Birkin says that Flutter will strive to become the market leader in igaming by gaining more shares. This is a tried and tested strategy.
He says that while some may think the US market is unique, it has been played out in other markets many times before. Paddy Power achieved this in the UK many years ago. The growth there was led by sport, followed by a period of time where the growth in igaming was strong.
William Hill has also grown their online business successfully with their big push into gaming from their sporting heritage.
FanDuel, as the leader of US sports betting in this country, will follow this path.
FanDuel’s plan is to maintain its leadership in sports betting and accelerate growth by increasing the company’s share of the online gaming market.
Scale is important and scale will translate into gains in online gaming.
