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Flutter Entertainment, the gambling operators whose brands include Paddy Power, Betfair and the American firm FanDuel, has confirmed that they have left the domestic stock exchange.
Their vagabond shoes have been longing to stray for a while, but now they’re going to make a brand new start of it in old New York, going public on the New York Stock Exchange (NYSE) earlier this week.
Flutter will continue to operate in the UK, Ireland and across Europe, however their switch to the U.S. market is another sign of where the industry’s focus is heading – long term, that could potentially be bad news for punters on these shores.
A Bite of the Big Apple
As if setting up residence in the United States wasn’t hard enough for the UK gambling sector to take, Flutter have also confirmed their intention to make their NYSE presence their ‘primary listing’ as ‘soon as is practicable’ – meaning that they will leave the London Stock Exchange pronto.
Sports betting is a booming business in the United States, with $1.3 billion (around £1 billion) expected to be wagered on the upcoming Super Bowl 58 alone. Flutter made around £191 million a year from their American endeavours prior to the 2018 law change in the country, which allowed individual states to decide whether to deregulate gambling.
They acquired a controlling stake in FanDuel, one of the primary bookmakers in the U.S, for just £124 million – by the time they added another 37% to top up their holding, Flutter were forced to stump up a further £3.3 billion; so undervalued had the sector been prior to the law change.
By 2023, their revenue on American soil had increased to a whopping £3.6 billion annually, which equates to around 40% of their annual takings (up from 10% in 2018), so unsurprisingly Flutter bosses are keen to make further growth in the United States their primary aim.
As such, the firm is keen to pour as many resources into their U.S. adventure as possible, with FanDuel in a battle with the likes of DraftKings and BetMGM, who have recently gone the other way and entered the UK market, for supremacy.
“We believe a US primary listing is the natural home for Flutter given FanDuel’s number one position in the US, a market which we expect to contribute the largest proportion of profits in the near future,” so said Flutter chief, Peter Jackson.
Shareholders will convene in May to vote on whether or not the firm leaves the London Stock Exchange for good.
Grey Areas
One of the other reasons for Flutter’s bullishness is a general sense that some of the larger states in America will soon begin the deregulation process.
Georgia is the first state to legalise gambling in 2024, and the general consensus is that California will be another to follow this year – albeit after a protracted legal battle to get it through the Senate.
There’s even a chance that Texas, despite its largely religious populace, will also consider legalisation more seriously as a means to boost the coffers – opening up a new audience base worth billions.
The more states that deregulate betting, the fewer unregulated markets that will exist in America – one of the conditions of Flutter’s global growth was a demand for them to leave as many grey and black sectors as possible.
They have obliged, although unregulated operators continue to dog a sector looking to spruce up its image – particularly in the UK, where it’s thought that new tougher legislation is on the way in the midst of the government’s White Paper.
So-called crypto casinos are posing a particular problem. These are unregulated, unlicensed and effectively illegal, and a Sky News investigation has found that punters can buy access to an approved account for just £8 on Facebook and TikTok.
This ‘account squatting’ is not uncommon – bettors in countries where gambling is illegal pay for access to UK betting accounts, while some football punters also pay to have a fake account set up for them in Asia where, in many cases, they can access longer odds.
But the ease with which anybody can get hold of an illegal crypto casino account – with change from a tenner – is alarming industry watchdogs.
The accounts are set up and verified by an independent party, so the buyer is simply paying for a username and password – and a chance to bet with a site that is not held to the same strict licence criteria as a UK-facing firm. That means they are unlikely to be subject to any affordability checks.
It’s a loophole that needs to be closed – and fast.
