Flutter: FanDuel IPO Would Not Include FOX Bet, PokerStars

• FanDuel IPO would only make a small shareholding available but nothing is imminent.
• Flutter saw a 42% jump in online revenue during Q1 which was driven by online player growth being up 36%.
• FanDuel was responsible for 91.6% of Flutter’s revenue compared to only 8.4% for Fox Bet/PokerStars.

NEW YORK – The relationship between the two sports betting operators FanDuel and FOX Bet has taken another turn as now the companies will undergo an arbitration process over FOX being able to buy an 18.6% stake in FanDuel for $11.2 billion.

While the price for that 18.6% stake is negotiated that is not the only problem between these two operators. In addition to the looming legal showdown, a potential FanDuel IPO would leave off FOX Bet and PokerStars according to Flutter Entertainment which owns both FanDuel and FOX Bet.

Flutter CEO Peter Jackson said that the company remains the leader in the sports betting market with almost $400 million in the first quarter and will decide on the future of the IPO at the appropriate time.

“In the US, we continue to lead the market with revenue of almost $400m in the quarter. We believe that the quality and breadth of our offering remain a key differentiator for FanDuel sports and the key driver of our leadership position. Our US business had over 1.6m average monthly players in Q1, meaning that it is now twice the size of our Australian business and is quickly closing in on our International division. We are continuing to consider our options with respect to a possible US listing of a small shareholding of FanDuel Group. No decision has been made at this time and we will update the market as appropriate.”

In the trading update, Jackson went on to note the major difference between FanDuel and FOX Bet in terms of revenue generated for the company.

“Our market leading US business continues to expand rapidly, with successful state launches in Michigan and Virginia during the quarter and excellent ongoing momentum in existing states. Revenue in the quarter grew 135% to £288m ($396m). Of this, FanDuel Group accounted for 91.6% of revenue (Full Year 2020: 89.1%), with FOX Bet (including PokerStars US) accounting for 8.4%.”

That margin alone makes FanDuel much more valuable in Flutter’s eyes which could be a reason why FOX Bet/PokerStars were left off the IPO. This is very good news for FanDuel who could see the company valued higher than rival DraftKings upon hitting the open market.

FanDuel has consistently generated more revenue than Fox Bet/PokerStars for the entire year of 2020. FanDuel had $800 million in revenue while Fox Bet only made $96 million.

The FanDuel IPO is a valuable asset which is why FOX is fighting for the lowest possible cost for its stake. While the number of shares that would be available haven’t been released expect FanDuel to launch the IPO sooner rather than later especially as more major markets like Florida among other states begin to hold legislative sessions to legalize sports betting.

Flutter saw an uptick in both online revenues by 42% along with player growth being up 36% with recent launches in Michigan and Virginia being the catalyst. If anything, expect Flutter to continue to ride with FanDuel as FOX Bet will likely split amid the tension between the companies.

News tags: FanDuel | Flutter Entertainment | Fox | FOX Bet | Peter Jackson | PokerStars