![]() The global sports-betting market is forecast to be worth US$140 billion by 2028, based on compound annual growth of 10.1% from 2021 to 2028. The business has global reach, scaled investment in product innovation and technology, and strong local brands. They offer a mix of regulated real-money and free-to-play sports betting, online gaming, daily fantasy sports and online racing wagering products.įlutter is well placed to capitalise in a long-term growth industry. It also owns TVG, FOX Bet and PokerStars. In the US, the crown jewel of Flutter’s operations is FanDuel. Over the past decade, Flutter has built its business both organically through superior execution, and via M&A. In 2009, Paddy Power acquired 51% of Sportsbet and bought the rest in 2011. In Australia, Flutter owns Sportsbet, the dominant player in our online sports-betting market with an estimated 50% market share. It also has more than 600 Paddy Power betting shops. In the UK and Ireland, Flutter owns Sky Betting and Gaming, Paddy Power, Betfair and Tombola. Another 30% comes from online gaming and 15% from online poker.īy country, about 80% of Flutter’s revenue is earned in the UK and Ireland, Australia and the US. ![]() 3 It began in 1988 as an Irish bookmaking business (through Paddy Power).Ībout half of Flutter’s revenue now comes from global sports betting via websites and Apps. In 2020, Flutter became the world’s largest online betting company with its US$6-billlion acquisition of The Stars Group, a Canadian gaming company.Ĭapitalised at £19.2 billion 2, Flutter is a top-100 company on the London Stock Exchange. In 2016, Flutter was created through the merger of Paddy Power and Betfair. Dominant position in a long-term growth market We believe Flutter can achieve this goal for five reasons: 1. ![]() Our goal is to sell when the company achieves a top-quartile valuation. Often, this means buying deeply out-of-favour stocks and holding them through a full investment cycle (7-10 years) as we wait for value to be realised. PM Capital’s investment style is to identify high-quality companies trading at bottom-quartile valuations. Importantly, at the time of PM Capital’s investment, Flutter traded at a material discount to our sum-of-the-parts valuation for it. The company’s leverage to the evolving legalised US sports-betting and online-gaming market could potentially provide years of growth. Flutter has a strong position in a structurally growing market. We believed Flutter had traits of other PM Capital investments. The Fund’s initial entry point was around £82 a share. In April 2022, PM Capital initiated a position in Flutter for the PM Capital Global Companies Fund. So, we watched and waited for value to emerge in sports-betting stocks with US exposure. PM Capital believed this market would become a significant, emerging opportunity. In 2017, investors largely ignored potential growth in US sports betting given its status as an unregulated ‘grey market’ outside of Nevada. PM Capital’s investment in global casino companies and our understanding of the local bookmaking industry added to our understanding of sports betting. PM Capital’s interest in Flutter emerged during our 2017 review of UK bookmaking sector, which included such companies as William Hill and Entain (at the time named GVC). Less understood is that Sportsbet is owned by Flutter Entertainment plc, a Dublin-based company that has its primary listing on the London Stock Exchange (LSE: FTLR). Some might have used Sportsbet’s App to bet on horse racing or other sports. Many Australian sports fans would be familiar with advertisements for Sportsbet.
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