The board of Flutter Entertainment has opened a consultation with shareholders on an additional US listing of the operator’s ordinary shares.

The growing dominance of the FanDuel brand as part of Flutter’s portfolio has been laid bare in recent financial reports, with US revenue up 82% year-on-year to £598m in Q3 2022.

That put the US firmly in the top spot as Flutter’s biggest-earning market, comfortably ahead of the UK & Ireland which generated £509m in revenue during the same period.

FanDuel is also the standout market leader in the US for combined share of online sports betting and online casino.

In a statement released today (14 February), Flutter said that the trend is expected to continue, with FanDuel rapidly becoming Flutter’s largest business segment by revenue and generating an ever-greater proportion of the group’s overall value.

In that context, Flutter’s board has reached a preliminary view that an additional US listing of the firm’s ordinary shares will bring about several long-term strategic and capital market benefits.

A US listing would enhance the group’s profile in the US, better enable the recruitment and retention of US talent, and give the group access to deeper capital markets and new US domestic investors, according to a statement to shareholders. 

Further, a listing would provide greater overall liquidity in Flutter shares and provide the optionality to pursue a primary US listing as an additional step further down the line.

Flutter’s board said it intends to consult extensively before deciding whether to put forward a formal resolution for approval.

In the event there is broad shareholder support for an additional US listing, that strategy would take precedence over any plans to list a small shareholding in FanDuel.

Flutter first announced plans to explore an IPO for a small stake in FanDuel in March 2021, before reportedly dropping the idea last year.

The firm had considered capitalising on a boom in US online gambling stocks which saw the market cap of rival DraftKings hit a record high of $28.5bn, overtaking the value of Flutter in the process.

Goodbody gaming and leisure analyst David Brohan explained at the time: “For better or for worse, a lot of the valuation of FanDuel is tied to DraftKings since it IPO’d.

“DraftKings was trading at 15x forward sales and you were looking at that and thinking FanDuel is a better business, it has a bigger market share, a bigger revenue pool and is losing less money. It also has a better management team.”

Flutter therefore wanted to find a way of unlocking the value of its FanDuel brand, which was thought not to have been properly considered in the company’s overall valuation at the time.

The operator will now undertake its shareholder consultation on the matter immediately and will announce the results in due course, it said.