Flutter potentially listing its sportsbook and daily fantasy sports betting business FanDuel in the US makes perfect sense for two reasons.
“First, it is likely to get a much higher valuation than is currently attributed to the operation as part of the Flutter group,” says AJ Bell’s Russ Mould.
“Second, this is arguably the most exciting part of its group and it seems logical to want to capitalise on positive momentum and give investors an opportunity to invest purely in this bit. It also helps there is already a listed peer in the form of DraftKings.
“Flutter would have to sell part of its holding in FanDuel to facilitate an IPO. On one hand this means giving up some of the potential future gains, but it could also generate a significant chunk of cash to help pay down debt.
“Importantly, Flutter has indicated it would only sell a small part of FanDuel to support an IPO. That would suggest that FanDuel would still play an important role within the larger group and be able to access funding.
“Daily fantasy sports involve the creation of teams made up of real players from a professional sport. Users play against each other for a single game or the entire season and earn points from how well their players perform.
“Each player has a different salary based on how they are likely to perform and each user is given a fixed budget to select their teams.
“FanDuel makes money by collecting a percentage of user entrance fees with the rest going to the pool which is paid out to the winners at the end of each game or season.”