Flutter Entertainment confirmed to investors in its Q3 2023 trading update that a US stock listing is definitively coming for the company and that they can now expect that to happen in the first quarter of 2024. It also made clear that the listing will be on the New York Stock Exchange (NYSE). Other online gaming stocks for the US market are split between the NYSE and Nasdaq.
Flutter is primarily of interest to US investors as the parent of FanDuel, one of the “Big Three” US online gambling operators alongside DraftKings and BetMGM. At one time, Flutter was looking at spinning off FanDuel as a separately traded entity. However, those plans fell through earlier this year, and the company opted to create a secondary listing in the US as a compromise. At the time, it said it expected the listing to go live in Q4 2023, but the process appears to be taking a few months longer than anticipated.
Still, the trading update makes clear that Flutter has now submitted its application, so barring rejection by the Securities Exchange Commission (SEC), the move is officially happening. Alongside its listing on the NYSE, Flutter plans to remove its existing secondary listing from Euronext Dublin. Formerly known as Paddy Power Betfair, Flutter originates in Ireland and still has its headquarters in Dublin. However, its business is increasingly international.
Aside from FanDuel, Flutter subsidiaries currently or formerly serving the US market include PokerStars, Betfair, and the now-defunct Fox Bet. It also operated Stardust Casino for a time, though control of that brand has reverted to its owner, Boyd Gaming.
CFO Edgecliffe-Johnson: Market Leadership Debatable
Flutter’s shares (FLTR: Flutter Entertainment 25,22 0,00%) have been on the decline since June and took a sharp dip alongside the trading update. Its sports revenue took a small year-over-year hit in the quarter, but investors may be more spooked by news that DraftKings claims to have overtaken BetMGM and Flutter for market leadership in the US.
Market leadership isn’t a term with a formal definition. When companies are in such tight contention for the title as the Big Three, each may try to claim it based on different metrics.
When asked about DraftKings’ claim, Flutter CFO Paul Edgecliffe-Johnson told investors that he thinks net gaming revenue—rather than gross revenue—is the more meaningful metric.
DraftKings has been known for its heavy spending on promotions to attract players. It has cut back dramatically this year, but so have its competitors. Edgecliffe-Johnson stated that Flutter leads the market when looking at net revenue. The implication, essentially, was that DraftKings’ greater gross revenue doesn’t mean much if it is returning a substantial part of that money to players.
Overall, Flutter’s gaming revenue was up 8% year-over-year for the quarter while average monthly players rose 16%. The gains have been largely in its gaming vertical (casino and poker), while the sports vertical has been stagnant.