The following article lays out the potential size of the US market - PBH is not mentioned, however huge opportunities
Rupert Murdoch set to increase wager on US gambling boom
Rupert Murdoch is poised to take advantage of the boom in America’s sports gambling industry by deepening ties with the owner of the FTSE betting giant behind Sky Bet.The media mogul is positioned to increase his stake in FanDuel, the US fantasy sports and betting website, by nearly a fifth later this year.The media mogul is positioned to increase his stake in FanDuel, the US fantasy sports and betting website, by nearly a fifth later this year.CREDIT:APMr
Murdoch’s Fox Corporation is in line to buy part of the business from owner Flutter Entertainment, the FTSE 100 betting giant behind Sky Bet and a host of gambling brands.The move would mark a strengthening of ties between Fox and Flutter, which has emerged as an early victor of the liberalisation of sports betting in the US as firms race to conquer what is likely to become the world’s most lucrative market.AdvertisementFanDuel has surged ahead of rivals as the decades-long ban on sports wagering is rolled back on a state-by-state basis. Peter Jackson, Flutter chief executive, said: “We are the number one player there [in the US].“Our revenues in 2020 were greater than the number two and number three players combined.”The ties between Flutter and Fox stem from a deal between Fox Bet and Toronto-listed Stars Group. Flutter merged with Stars Group, the owner of Sky Bet, in a deal worth $US11 billion ($14.1 billion) last year.Fox is also one of Flutter’s biggest shareholders with a 2.6 per cent stake worth about £650 million ($1.16 billion).Mr Jackson admitted over the weekend that Fox Bet has not “got the same market share and traction” as FanDuel.While insisting that the “power of Fox” is important to Flutter, Mr Jackson added that Fox Bet is “not a great product and they didn’t come to market with an enormous set of customers on their database”.
Flutter now expects its US revenues to hit $US20 billion by 2025, double last year’s estimate.The US is expected to become the world’s most lucrative sports gambling market.CREDIT:APAnnual revenue across the wider group doubled to £4.4 billion following the merger between what was Paddy Power Betfair with Stars Group, the Canadian bookmaker behind Sky Bet. Pre-tax profit collapsed by £136 million to just £1 million after the company took a slew of costs relating to the Stars Group merger.Analysts at stockbroker Jefferies estimated that Flutter is undervalued by about £5 billion when compared with its number two rival in the US, DraftKings. In third place is BetMGM, a joint venture between Ladbrokes owner Entain and casino operator MGM Resorts.
DraftKings has a $US27 billion stockmarket value despite not yet turning a profit. Flutter is worth just over £25 billion.Mr Jackson said: “We need to leave the market to form their view of what our business is worth. You have to believe that our business in America is more valuable than the DraftKings business. So there is some mismatch between the valuations of the businesses.“It’s probably more difficult for the Robinhood type of investor to put money to play in Flutter - I think it’s a little bit more difficult for them and they are more focused on domestic US businesses.”David Kimberley, an analyst at Freetrade, said: “The bookies have been in prime position to take advantage of the pandemic. But the big news here is obviously the US. Looser regulations mean the world’s largest economy is fast becoming the most important jurisdiction for bookmakers.“Telegraph, London
PBH Price at posting:
$14.75 Sentiment: Buy Disclosure: Held
(20min delay)