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Small wonder the SP is up over 7% this morning. Fan Duel is now 50% bigger than Draft Kings in the US.
Last Friday, FD upped it's forecast year end revenue to between $1.21 to $1.29 billion. FLTR today forecasts $1.8 to $2.0 billion. Says it has 45% of the online sports betting market and 31% of the overall online gambling market.
The level of detail in this report is far greater than normally revealed and, imho, most useful to all of us who are anticipating a medium-term 'multi-bagger' from the UK bookies foray into the deregulating US. Fingers crossed!
They anticipate being cash-flow positive in sports by the end of 2023 based on the current market size, but warn that if any of California, Florida or Texas legalise before 2024, then that will require a further massive investment out of profits elsewhere, delaying cash for the PI's. Do I care? Not likely. The bigger the market gets, the greater the eventual profits for us.
Onward to Thursday and Entain's half-year results.
The prospects here are great and the company is an obvious target but is that priced in? I really don't know and so am holding and happy to do so.
Excellent H1 2021 Results today expecting approximately 75p eps by Year End.
They have turned around the ship... full steam ahead!
Better news form DraftKings in the US...Buying Golden Nugget Online Gaming for $1.56bn!
Next stop Flutter..
Hello Gewillia. Like you, I rely on fundamental analysis to select my investment in Flutter.
It was unfortunate that the management was unable to IPO its FanDuel subsidiary during the peak exuberance period over sports betting in the US in March, but the opportunity may present itself again, as the company has publicly declared its eagerness and willingness.
One dampening factor though is that it might not command as high a rating as it might have got in March - Draftking, which it benchmarks with, has fallen out of favour, having dropped by about a third from its March high, as investors are questioning the long term business models of pure sports betting companies.
I too held William Hill and sold them to Caesars in their takeover bid. I reinvested the proceeds in Caesars afterwards as I like the prospects for the company because, in addition to its newly acquired sports book, its huge Las Vegas casino properties and elsewhere in the US are prime destinations for staycation vacationers with the re-opening of the economy.
You have a good day.
Caesars have announced their June 30th Q numbers and there's a reasonably good transcript of management's call with analysts on Motley Fool. From our PI's perspective the interesting number was that William Hill US (now rebranded) made a net profit of $100 million in the Q. The CEO said that he expected to invest a further $1 billion on taking online sports gambling nationwide and stealing market share, but that once this expense was over, he anticipated an annual return of between $500 m and $1 billion in profits, which is a phenomenal number. Although the CEO declined to put a time frame on when we can expect this.
No estimate was provided for Hill's market share, tho' in the past, I think it's been 15 to 20%. How does this impact Flutter? Well, FLTR seems to have c. 30% market share, so it's beginning to look like the promise, 2 to 3 years ago, of a transformative expansion into the US, is turning into a reality. Expensive to orchestrate, but massively profitable in the medium term.
BTW Cukkas, I don't pay too much attention to people like Hindenburg. The shorting market is much bigger in the US and professionals like H are always looking to scalp a quick short-term profit using exaggerated scare tactics. It's only when the SP begins a serious collapse and the market, as a whole, loses faith (Like WeWork or Lehmans) that I run for the exit.
Another outfit tried this with one of my holdings, Future, back in June of '19. Made accusations of v. aggressive accounting and brought the SP down from from £12 to £9 for a couple of weeks. Bit unnerving, but the SP today is £35. I'm expecting the same from Fltr.
Hopefully starting with the half-year results on the 10th, next week. Fingers crossed!
https://twitter.com/TheTradingShack/status/1414258527527444484?s=20
Flutter is falling sharply today, but there is no company specific news out, I believe.
However, there is allegation of black market dealing by Draftking and is now kicking up a stink in the US! Don't know if that fallout is affecting Flutter...
https://hindenburgresearch.com/draftkings/?theme=1&color=2
Hi Gewillia, thanks a lot for your reply, much appreciated.
Hi Cukkas, As you say, there's no public news whatsoever to account for the fall from mid-March's £170 to mid-May's £120 and today's £140.
Just background noise in a volatile market, imho. The next news may well be Fox-Bet's exercise in July of it's FanDuel option to increase it's shareholding, over which there is a dispute regarding the exercise price. As silence has reigned over this argument since it was first revealed, I'm guessing both parties are in serious confidential discussions to resolve the matter.
Meantime, I sleep easy as the punters continue to lose some of their money and the publicly available monthly betting turnover from the states with legalised gambling, continues to show that the sports-betting market in the USA is growing like a weed on steroids.
For example, total sports wagering in New Jersey, for the January thru' April period, rose from $86 million in 2020 to $244 million in 2021. A rise of over 180%. FLTR has between 20% and 25% of this market and the profit margin is a rough average of8%.
If you're interested in following developments in all the states, you might begin at www.sportshandle.com. It has lots of good info', updated regularly.
Hello, is anyone aware of any possible reasons to account for the recent turn round in Flutter's precipitous falling share price from mid-May?
I've checked through all online sources, but couldn't see any possible positive catalysts.
Thanks.
The first quarter figures for the 12 states with legal sports gambling are in. Turnover wagered by punters totalled $916 million. This is bigger than the total amount wagered in all of Calendar 2019. The market effectively quadrupled in 18 months.
Most operators like Flutter expect to be open in another 8 states, covering 40% of the adult population by 31st December.
This sum excludes online and regular casino gambling, which totalled $11.1 billion for Q1-2021. Also a record, despite occupancy of physical premises mostly been capped at 50%, but this is now being relaxed; This week MGM & Caesars got permission to move to 100% in their 18 Las Vegas premises and Caesar's announced that all its LV hotels are booked 100% for weekends through the autumn.
The dispute with Fox, other volatility due to the crazy Kentucky court decision and the departure of the FanDuel CEO is, imho, irrelevant. While the SP will continue to jump up and down, the medium-term trend is strongly upwards toward £200 and FanDuel should IPO later this year. Fingers crossed that Covid is kept under control.
This drops looks over cooked. I find it hard to believe that something as critical / important as the price fox agreed on there fan dual option was not crystal clear on the contract and fully agreed. Thoughts folks ?
Reconfirmed and Bloomberg are reporting increased sports betting from the re opened casinos - should help our next results.
Here is the requested article:
Murdoch’s Fox poised to take FanDuel off air in Flutter row
Fox last week launched legal action in New York against Flutter, the operator behind Sky Bet, Paddy Power and Betfair
By
Oliver Gill
10 April 2021 • 8:00pm
Texas Rangers play the Toronto Blue Jays.
Crowds are returning to North American sport. The industry is opening up to gambling, too. CREDIT: Jeffrey McWhorter/AP
Rupert Murdoch is primed to impose an advertising blackout of America’s most popular sports betting brand if its British owner refuses to back down in a bitter legal row.
FanDuel, which is owned by FTSE 100 bookmaker Flutter Entertainment, risks being taken off the air by FoxSports, America’s second-biggest sports television network, The Sunday Telegraph has learnt.
The threat comes at a time when advertising is playing a key role in allowing operators to grab a toehold in what is expected to be the world’s biggest regulated market.
If followed through, it would mark a significant escalation of a row that erupted last week between Fox Corporation and Flutter.
Fox last week launched legal action in New York against Flutter, the operator behind Sky Bet, Paddy Power and Betfair, in a row over FanDuel, which has a 40pc share of the US market.
Fox has an option to buy an 18.6pc stake in FanDuel in July. It claims it is entitled to pay the same price that Flutter paid in December, when the London-listed operator acquired the shares of FanDuel that it did not own at the time.
But Flutter claims it must pay the “fair market value” in July and has alleged that Fox is trying to secure a “windfall” by buying the shares at a lower price.
One insider said that Fox’s preference was to resolve the dispute. However, if it could not be resolved, Fox would focus on advertising its own brand, FoxBet, instead of promoting FanDuel. Sources close to Flutter claimed that Fox had realised it has backed the wrong horse. Fox and Flutter declined to comment.
Thanks very much, Longview. I don't suppose you have a sub with the Torygraph, do you? They had an article on Saturday, with a lively headline suggesting that Foxbet was attempting to make life difficult for FanDuel by banning advertising somewhere. But I couldn't get past the paywall.
The link to the requested info is here:
https://www.reuters.com/article/idUSKBN2BU0X4
but there is no more details than was copied by Khunter:
"...London-listed shares in Flutter were down 1.6% at 155 pounds at 0830 GMT, having earlier traded as low as 151.25.
Separately, a bookrunner said a Flutter shareholder was selling about 2.3 mln shares at a 2.8% discount to Tuesday’s close, or 153.50 pounds per share.
Reporting by Graham Fahy; editing by Jason Neely, Kirsten Donovan..."
No other press seems to have any handle on this either, nor any RNS announcement.
This mocking parody on the classic 'starter's orders' for the Indianapolis 500 has always summed up business in the USA. Given that the members of the Murdoch family are practically down to their last $10 billion, it was to be expected that they'd jump on any loose wording in the FanDuel/Stars purchase and sale contracts, in order to score themselves a bargain.
The good news is that the paperwork calls for arbitration which is great for two reasons; 1. Speed. No waiting for clogged courts to hold hearings, and 2. A well-written arbitration judgement is virtually unappealable on the facts of the case. The arbitrators have to make errors in law.
khunter. Thank you for the GS post. Where do you find that 'info, please? An update on the overnight result, in due course, would be much appreciated.
*GOLDMAN SELLING ~2.3M FLUTTER ENTERTAINMENT SHRS VIA BOOKBUILD
The sports book just opening in another state was reported on Bloomberg news just now - so obviously a big deal over there- add in Bidens stimulus chaeques and a surge in profits is guaranteed imv.
Those are some startling numbers Gewillia.
I have a few other shares that have highlighted the discrepency in valuation between US P/e levels and the UK - Bio-tech, tech, crypto mining where US peers have up to 10x the value the UK market puts in a share. It seems the US has a wildly inflated view of shares or the UK is wildly discounted. IMHO a lot of the former and a bit of the latter. I am seeing a UK desire for dual listings to access the higher US value perception and I hope FLTR do take this opportunity to raise there to lower debt as i do think the US will have a correction this year as a result. TBH what surprises me most is the US companies are not using this to drive a much higher surge in takeover activity from the UK market.
NtD
I played with some numbers yesterday and take almost no responsibility for the fact that my steam-driven slide-rule may be wildly inaccurate. But try this on for size:
FanDuel had a turnover of $1.1 billion in 2020. It's smaller competitor, DraftKings, trades in on the NASDAQ in New York at 35 times turnover. Applying that multiple to FanDuel suggests a capitalisation of $37 billion, were FLTR to float, say, 10% to raise cash to pay down debt.
Last Friday FLTR closed at a capitalisation of £27 billion in London, which at $1.40 exchange rate = $37 billion. In other words, the rest of FLTR's assets are in the SP for nothing, if FanDuel (with 40% of the US market) is worth anything close to $37b.
Given that FLTR's non-US assets are worth a minimum of £10 billion, this suggests the SP is on its' way to north of £200. I stand to be corrected by anyone with a better slide-rule.
When the Biden cheques arrrive , many will be used on sports bets etc - so expecting a further surge here.
Been a good percentage increase today , should be due a TSG yearly update, 27/3/20 last one GLA
Best bet I made was investing here - stunning growth rvealed in the results - upgrade expected.