Fox Ups Stake In Flutter, Online Gaming Power
- by Karlene Lukovitz @KLmarketdaily, June 1, 2020
Fox Corp is increasing its stake in Flutter Entertainment, the world’s largest online gaming company.
Flutter, parent of betting platforms Betfair, Padd.yPower and FanDuel, also acquired The Stars Group (TSG) last October.
Fox purchased a nearly 5% interest in TSG in May 2019 for $236 million, to pump up its Fox Bet sports betting platform. That platform is currently available in New Jersey, Pennsylvania and Colorado, with plans to roll out across the country as more states legalize online sports betting.
Now, Flutter is selling 8.05 million shares at a nearly 5% discount from its closing price on May 28, and Fox — which sees iGaming and online and mobile sports wagering as an important area for future growth — has committed to buying a so-far undisclosed number of those shares.
“Fox is bullish about the opportunities in the digital sports wagering market,” Fox Corp CEO Lachlan Murdoch stated. “Fox Bet has shown strong growth since launching last fall, and we look forward to continuing that success with our partner, Flutter. Fox’s investment in Flutter underscores our confidence in Flutter’s business and its management’s ability to continue to drive leadership in the U.S. market.”
Flutter’s merger agreement with TSG allows Fox to increase its stake in FanDuel to as much as 18.5% by 2021. That could serve to replace Fox’s investment in the rival DraftKings sports betting and daily fantasy sports provider, which was among the 21st Century properties sold by Fox to Disney in 2019, notes Casino.org.
Flutter’s secondary offering, worth $1 billion in equity, is driven in large part by its push to expand its footprint in the U.S.
Dublin, Ireland-based Flutter “believes that one potential consequence of the COVID pandemic is that the pace of regulation in the U.S. could accelerate, as an increasing number of U.S. states look for new ways to raise additional sources of tax income,” the company said in announcing the offering and Fox’s participation. “Flutter is determined to give its U.S. business the best possible platform for future success and to replicate the leadership position it has achieved in the states that have regulated to date.”
