Posted on: January 9, 2024, 01:19h.
Last updated on: January 9, 2024, 01:19h.
FanDuel, the largest online sportsbook operator in the US, recently paid $71 million for a new office in Beverly Hills, Calif.
That despite the fact that neither iGaming nor sports wagering is permitted in the state and it could be some time before that changes. FanDuel acquired a 50,200-square-foot three-story building at 9000 Wilshire Boulevard, paying $1,410 per square foot. By some estimates, that’s more than quadruple the going rate for commercial real estate in Southern California. Arguably, that’s a lofty price tag at a time of lethargy in the region’s office real estate market.
The Lost Angeles office market is expected to remain slow due to a persistent shortage of leasing activity and increasing vacancy rates. A few encouraging signals still exist, including government agencies in Los Angeles leasing large blocks of office space,” according to Kidder Matthews research.
It’s not yet clear how many staffers FanDuel will employee at the Beverly Hills location.
FanDuel Beverly Hills Office not Necessarily Betting Prelude
While there’s plenty of hope that California will eventually permit online sports wagering, it could be several years before that happens and online casinos are likely a nonstarter there due to Tribal control of the state’s casino gaming industry.
That is to say FanDuel’s new Beverly Hills digs likely aren’t a prelude to the operator taking bets in the state over the near-term. There are instances of gaming companies maintaining corporate offices in states in which they don’t book bets. For example, DraftKings opened a new office in Las Vegas last year even though it does offer daily fantasy sports (DFS) or sports betting in Nevada.
In the case of FanDuel, the new Beverly Hills location makes sense because its TVG cable channel is based in Los Angeles.
The gaming company currently has 15 job openings in Los Angeles, several of which pertain to TVG and none of which are directly linked to betting, according to its website.
FanDuel Sale Big Profit for Seller
Recent data from NAI Capital indicate Los Angeles County office sales declined 42% in 2023 while the average price paid per square foot plunged 41% to $295, indicating FanDuel did in fact pay a big price for the Beverly Hills property.
The transaction likely represented a big payday for Swedish developer Skanska, which acquired the property in 2019 for $18.2 million. Skanska replaced two buildings there, but likely still managed to turn a tidy profit with FanDuel paying $71 million for the new building.
FanDuel is expected to have been profitable over the entirety of 2023, becoming the first US sportsbook operator to accomplish that feat. Parent company Flutter Entertainment (OTC: PDYPY) is slated to list its shares on the New York Stock Exchange (NYSE) later this month.