- Why is Flutter so important?
- How big is Flutter?
Fox Corporation’s legal dispute with London-based gambling company Flutter over the share price of a US betting platform has shined a light on the land-grab that’s taking place as America relaxes its online gambling laws.
Flutter Entertainment, which owns iconic European betting brands such as Betfair and Paddy Power, increased its stake in US company Fan Duel to 95% in December at a cost of over $4bn.
The push was facilitated by Fox, who as part of a prior agreement to sell Canadian gambling firm The Stars Group to Flutter have an option to buy 18.5% of Fan Duel this July.
But the two companies are now at odds over the valuation of Fan Duel’s shares. Fox believe the share value for their purchase this summer should be the same as when Flutter invested further in Fan Duel last December. But Flutter have pointed to a raised share price since the investment and want that to be reflected in the Fox deal.
Rupert Murdoch’s company has now filed a lawsuit against Flutter.
Why is Fan Duel so Important?
Fan Duel, located in New York, is currently valued at $11.2bn and operates sportsbooks in a number of US states. It has been in operation for over a decade, during which time the majority of the US has outlawed or restricted online gambling.
But over the past few years states have begun loosening their strict online betting legislation, which has caused a boom in the market. While some states progress at glacial pace, others are actively approving licenses for online betting firms to operate.
Over in Europe, betting companies such as Flutter, Ladbrokes Coral and William Hill have launched hundreds of online gambling platforms and earned billions of dollars in the process. And the US is seen as the next big market that European operators are desperate to sink their teeth into.
How Big is Flutter?
The drawing of many European betting firms across the Atlantic has triggered a number of company mergers between EU and US brands. Flutter itself also owns brands in Canada and Australia, and its acquisition of a majority stake in Fan Duel means it has major access to the American market.
But online gambling in America remains a burgeoning industry compared to sports, movies and entertainment. For instance, Disney and WarnerBros combined generated $96bn in revenues in 2020, while the combined value of US sports franchises is thought to be around $75bn. Even Fox earned double the revenue Flutter brought in last year.
However, US online gambling is a market that has a bright future. It is expected that the US smartphone and computer betting sector will tip $100bn by 2026–a market size that is double what it is today.
Flutter Compared to Other US Entertainment
- Disney: $65.39bn
- Warner Bros: $30.44bn
- NFL: $12bn
- Fox: $12bn
- Flutter: $6bn