Just as it seemed Flutter Entertainment couldn’t be more dominant in the US iGaming market, the company has achieved 100% ownership of the FanDuel brand via a new deal with Boyd Gaming.
Subject to customary closing conditions, including certain regulatory approvals, the agreement will see Flutter acquire Boyd’s 5% stake in FanDuel for approximately $1.755bn, as well as revisit existing commercial terms.
Once completed, Flutter will own 100% of the FanDuel brand, a pursuit which began back in 2018 when the company acquired a controlling stake, before this was increased to 95% in a $4.18bn deal with Fastball Holdings in 2020.
However, it is worth noting that an option to buy 18.6% of FanDuel is held by the TV company FOX. This option can be triggered on or before 3 December 2030 for the price of FanDuel’s fair market value on 3 December 2020, which was $20bn, plus a 5% annual escalator (currently $4.5bn).
In addition, the two parties will extend their long-term strategic partnership until 2038, significantly reducing market access costs in US states where FanDuel’s market access is provided by Boyd, contributing to $65m in annual savings for Flutter beginning 1 July 2025.
The deal is forecasted to be completed in Q3 2025.
Help mitigate tax increases
Flutter noted that the savings further underpin its confidence in the US business’s long-term profitability, “demonstrating the ability to help mitigate both recent and future tax increases”.
An update on recent tax changes and their anticipated impact will be provided by the operator in its Q2 financial report on 7 August.
The company also stated that its leverage is expected to increase, but then fall due to highly visible profitable growth opportunities that exist across its operations, adding that it remains committed to its medium-term leverage ratio of 2.0-2.5x.
Peter Jackson, CEO of Flutter, commented: “Our acquisition of FanDuel in 2018 is one of the most transformational events in our Group’s history, with its natural competitive advantages combined with access to Flutter Edge capabilities driving impressive growth to become the well-established and clear leader in US online sports betting and iGaming.
“I am really pleased to drive future value for our shareholders by increasing our ownership of FanDuel to 100%.”
Revised market access deals
Upon close of the transaction, Boyd will have a fixed fee per state in Iowa, Indiana, Kansas, Louisiana and Pennsylvania from FanDuel’s mobile sports-betting operations, as well as FanDuel’s online casino operations in Pennsylvania.
Boyd’s retail sportsbooks outside of Nevada will continue to be operated by FanDuel through mid-2026, after which time Boyd will assume responsibility for these operations.
The operator has stated that under the revised market access deal terms, it expects $50m-$55m in operating income and adjusted EBITDAR for its online segment in 2025. For 2026, it expects this figure to be approximately $30m.
Flutter will fund the transaction by additional debt financing, entering into a definitive bridge credit agreement with certain banks for $1.75bn to help finance the acquisition, in addition to financing general corporate purposes and working capital.
Meanwhile, Boyd intends to use the net proceeds to reduce its debt.
“This transaction unlocks the tremendous unrealised value that our investment in FanDuel has created for our company,” added Keith Smith, President and CEO 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.”
