£800m Flutter as investors bet on gaming group

Betting giant Flutter, which owns Leeds-based Sky Betting and Gaming, has raised more than £800m from institutional investors to support its expansion strategies in the United States and online.

Flutter is the world’s largest gambling business with ambitions to grow further.

It has been created by the merger of some of the largest gaming brands. Its recent £6bn acquisition of Stars Group added Sky Betting and Gaming, and PokerStars, to its existing brands led by Betfair and Paddy Power.

The placing comes at a time when the firm is trading at a 52-week high. Flutter’s fundraising was priced at 10,100p per share, 4.7% below yesterday’s closing price but almost double the price of both a year ago and when the market briefly sank in mid-March.

America is seen as a huge growth market for betting companies. Individual states have been changing their regulations and Flutter believes the pace of regulation in the US could accelerate as states look for new ways to raise additional sources of tax income in the wake of Covid-19.

The group said: “Flutter is determined to give its US business the best possible platform for future success and to replicate the leadership position it has achieved in the states that have regulated to date.”

It wants to be able to move quickly so it can invest to secure additional market access deals in individual US states and spend on customer acquisition.

Fox Corporation has increased its investment in Flutter, having previously invested £190m in Stars last year.

Lachlan Murdoch, executive chairman and CEO of Fox Corporation said: “Fox is bullish about the opportunities in the digital sports wagering market.

“Fox’s investment in Flutter underscores our confidence in Flutter’s business and its management’s ability to continue to drive leadership in the US market.”

The fundraising will also support its customer retention strategies. Its online customer base has experienced “strong growth” as a result of the closure of betting shops and a “resurgence” for its online poker products and the group wants to retain these newly acquired and reactivated customers.

Good online poker and gaming performance has offset reduced sports revenue for the group, which has increased revenue in the second quarter by 10%.

Flutter said strong momentum in both Australia and the US had helped to partially mitigate the impact of national lock-downs, particularly in Europe.

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