Published on: April 3, 2024, 03:36h.
Last updated on: April 3, 2024, 03:36h.
Flutter Entertainment (NYSE: FLUT), the parent company of FanDuel, is planning to switch its main stock listing to the New York Stock Exchange (NYSE) by the end of 2024 to attract more retail investors.
The news comes shortly after the Dublin-based gaming company debuted on the NYSE, leaving its EURONEXT listing behind. Currently, Flutter’s primary listing is on the London Stock Exchange (LSE), one of Europe’s largest stock exchanges. The company is also part of the respected FTSE 100 Index.
Flutter’s stock has seen an 11.84% increase year-to-date, but has dipped slightly after its Jan. 29 NYSE debut due to weaker earnings in some non-US markets in the fourth quarter.
The company will seek approval from shareholders at its upcoming annual meeting in May to move its primary listing to the NYSE from the LSE. With a market cap of $34.49 billion, Flutter is the second-largest gaming company traded in the US after Las Vegas Sands (NYSE: LVS).
Importance of Flutter’s Primary Listing in New York
Flutter’s decision to list its shares on the NYSE is a setback for the LSE. Arm Holdings, another UK-based company, made a similar move last year, possibly due to Brexit.
Brexit has played a role as well. Financial centers in Europe like London, Amsterdam, Frankfurt, and Paris are now seen as rivals since the UK’s departure from the EU. The US tends to benefit when foreign exchanges compete rather than collaborate,” noted Craig Clay, president of DFIN Solutions.
An additional reason for foreign companies like Flutter to list in the US is the potential to be included in leading US indexes like the S&P 500. Based on market cap and profitability, Flutter could be eligible for inclusion in major US indexes if it shifts its primary listing to New York.
This could incentivize Flutter to move its primary listing from London as fund managers benchmarked to these US indexes would need to purchase shares of the stock if it gets added to those indexes.
Flutter’s Growing Presence in the US
While Flutter operates globally, FanDuel is heavily involved in the US sports betting sector, which is growing at a rapid pace compared to other regions. After a profitable 2023, Flutter expects its US division through FanDuel to generate core profits of $635 million to $785 million in 2024, up from $167 million in 2023.
FanDuel is Flutter’s leading brand by revenue and is the top online sports betting operator in the US, with a 43% market share compared to 36% for rival DraftKings (NASDAQ: DKNG).
Another benefit of moving the primary listing to the US is the potential to attract more attention from retail investors, who have shown interest in online gaming equities.