Paddy Power owner Flutter is to consult with shareholders about listing its shares on the New York stock exchange due to the growing importance of the betting group's US subsidiary, FanDuel, to its fortunes.
Flutter expects that FanDuel will become its largest business in terms of revenue while taking a greater proportion of its overall value as gambling continues to be legalised on a state-by-state basis in the US and grow in popularity.
The Flutter board has reached the view that listing company shares in New York, in addition to London, will yield long-term strategic and capital market benefits such as enhancing the group's profile in the US and better access to US talent.
Board members said the double listing would also give the group access to much deeper capital markets and to new US domestic investors, provide greater overall liquidity in Flutter shares, and give the group the option of a primary US listing, and thus access to important US indices such as the Dow and Nasdaq.
"The board appreciates that this is an important topic for shareholders and intends to consult extensively before deciding whether to put forward a formal resolution for approval," Flutter said in a statement.
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The group expects to start this consultation immediately, and provided there is broad shareholder support for the plan, a US listing of Flutter shares would take precedence over any plans to list a small shareholding in FanDuel.
FanDuel is the largest betting group with an estimated 42% share of the American sports betting market and 18% of gaming.
Flutter has invested some £4.3bn of capital in the FanDuel since the companies merged in 2018, and FanDuel has built a customer base of 7m registered players since a federal ban on sports betting was lifted the same year.
At FanDuel's capital markets day in New York last November, it estimated its market opportunity at 10x the size of New Jersey and expressed confidence that it is "uniquely positioned" to capture it due to its scale, brand and access to Flutter's balance sheet.
FanDuel has grown revenues from $300m to $3bn since 2018 and is on course to turn a profit in 2023. The company has projected the US gambling market will be worth $40.5bn by the end of the decade.
Flutter overall turned a profit of £620m from revenues of £6bn in 2021. By the Q3 2023, the group had grown its average monthly player numbers to 9.6m and projected full-year revenue of around £1.3bn for its operations outside the US.
"We are really pleased with our performance in our US division since the start of the NFL in September where we are now averaging over 1m players on a regular NFL Sunday," Peter Jackson, CEO of Flutter, said in a Q3 trading update.
"In addition, we are seeing an increase in customer retention rates as our parlay products continue to grow in popularity, boosted by the start of the NBA season.
"The ongoing momentum in our US division has led to an upgrade to our outlook for the year, underpinning our confidence that we will be profitable for 2023."
(Pic: Artur Widak/NurPhoto via Getty Images)
