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- Fox holds option to buy 18.6% stake in FanDuel at US$4.5bn price tag
- Boyd and Flutter will collaborate on market access
Flutter Entertainment has agreed to acquire the five per cent of FanDuel it did not own already from Boyd Gaming.
The deal will see Flutter buy out Boyd’s stake for US$1.55 billion, with another US$205 million to be paid to amend various existing commercial terms. The US$1.76 billion transaction values FanDuel at US$31 billion.
Flutter said it expected the deal, which is subject to regulatory approvals, to be closed in the third quarter of this year. Meanwhile, its strategic partnership with Boyd has been extended to 2038, with the two to work together on new market access contracts in various US states.
According to Flutter, the revised deals will generate annual operating cost savings of about US$65 million.
Once the deal is completed, Boyd will receive a fixed fee per state from FanDuel’s mobile sports-betting operations in the states of Iowa, Indiana, Kansas, Louisiana and Pennsylvania, as well as from FanDuel’s online casino business in Pennsylvania.
FanDuel will also continue operating Boyd’s retail sportsbooks outside of Nevada until mid-2026, with Boyd to take over afterwards.
“This transaction unlocks the tremendous unrealised value that our investment in FanDuel has created for our company,” said Keith Smith, president and chief executive of Boyd. “As a result, we are in a significantly stronger financial position to continue executing our strategy of investing in our properties, pursuing growth opportunities, returning capital to our shareholders, and maintaining a strong balance sheet.”
The deal grants Flutter complete ownership of FanDuel, although Fox has the option to buy a 18.6 per cent stake on or before 3rd December 2030. The media conglomerate can buy the stake at FanDuel’s market value in 2020 at a price of US$4.5 billion.
Speaking last year, Fox chief executive Lachlan Murdoch said the company intends to exercise its option, having acquired the right through FanDuel’s takeover of The Stars Group (TSG) in 2020. That deal meant Fox’s option to buy equity in TSG converted into an option to acquire shares in FanDuel.
FanDuel was previously valued at US$11.22 billion in 2020 when Flutter bought a 37.2 per cent stake in the sportsbook to increase its shareholding to 95 per cent. Flutter said FanDuel had a 43 per cent market share in sports betting in the US.
“I am really pleased to drive future value for our shareholders by increasing our ownership of FanDuel to 100 per cent,” said Peter Jackson, chief executive of Flutter. “Boyd have been fantastic partners for FanDuel, and we are delighted to be extending our important strategic partnership through to 2038.”
SportsPro says…
The increasing legalisation of sports betting in the US has provided sportsbooks with a major revenue opportunity. Last year, US sports betting revenue grew by 25.4 per cent to a new record of US$13.71 billion, with 38 states and the District of Colombia currently permitting the practice.
FanDuel has moved quickly to become one of the leading sportsbooks in the country. It has partnered with several major sports leagues like the National Football League (NFL) and the National Hockey League (NHL) to appeal to sports fans, and is now the naming rights partner for Main Street Sports Group’s regional sports networks (RSNs).
With Missouri set to legalise sports betting later this year, Flutter will sense an opportunity to further grow revenues for FanDuel. Though Boyd is no longer a stakeholder, it will continue to work with FanDuel on widening its reach across the country.
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