Paddy Power and FanDuel owner Flutter Entertainment PLC (LSE:FLTR)’s annual results proved one thing- the group’s decision to list in the US was less of a risky gamble and more of a sure bet.
Flutter listed its shares on the New York Stock Exchange on 29 January, concurrently confirming a primary listing switcheroo while keeping a secondary listing on the London Stock Exchange.
“We believe a US primary listing is the natural home for Flutter given Fanduel's #1 position in the US, a market which we expect to contribute the largest proportion of profits in the near future," chief executive Peter Jackson said at the time.
Flutter reiterated this today, stating that “we believe that this will unlock long-term strategic and capital market benefits”.
The group is tipped to switch listings at the end of May, pending shareholder approval.
Like many companies that have moved their shares to the US, Flutter hopes to tap wider pools of capital and liquidity while benefiting from enhanced market perception and lower regulatory restrictions.
These benefits are sector-agnostic for the most part, but Flutter’s rationale is also writ large in today’s annual results.
By the numbers
Flutter experienced remarkable growth in the US in 2023, with revenues increasing by 40.7% year-on-year to $4.5 billion.
FanDuel continued to consolidate its position as the number one online sportsbook and iGaming brand, with around 3.7 million new punters coming onto the platform.
The US segment achieved a new milestone by reporting its first year of positive adjusted EBITDA.
Conversely, the UK and Ireland segment grew revenues by 14.4% to $3 billion.
Flutter’s UK market penetration is around 30% in the segments where it operates, having added 2% in the reporting period.
In the US, Flutter further entrenched its dominant position, with its sportsbook position climbing from 50% to 53.4% and iGaming increasing from 21% to 25.7%.
Both regions are seeing growth, but the US is undoubtedly where the strongest gains are being felt, despite Flutter already being the top dog there.
In fact, Flutter expects underlying earnings to triple in the year at hand, with revenues continuing to climb another third.
Jefferies, in a recent research note, outlined America’s liberation of gambling rules as a further catalyst to US growth.
Analysts said the 2018 repeal of the Professional and Amateur Sports Protection Act (PASPA) paved the way for individual US states to introduce their own legislation for sports betting.
“Today, we count a total of 22 states (21 US + Ontario) that have permitted ‘full access’ OSB (online sports betting) and formed a regulated, competitive market,” wrote Jefferies.
Jefferies estimated a 2030 iGaming total addressable market from these existing states of $15.6 billion, equivalent to a 10% compound annual growth rate or a 1.9 times increase in the current size of the market.
Flutter would be wise to do anything at its disposal to make good on these opportunities, including a primary listing switcheroo.