Flutter moves primary listing to US and announces CFO change

Flutter Entertainment moved its primary listing to the New York Stock Exchange on Friday morning, completing a transition the company telegraphed during its initial public offering the first quarter earnings figures earlier this month.

Flutter, the parent company of FanDuel Sportsbookindicated during the call that the US is the natural home for the listing, underscoring the importance of the US sports betting and iGaming market for its total activities.

FanDuel retained the top position in the US online sports betting market during the first quarter, with a 52% market share in terms of net gaming revenue. Flutter made its debut on the NYSE in January after moving its secondary listing from Euronext Dublin to the New York Stock Exchange.

“Today marks a major milestone in Flutter’s evolution with the start of our primary listing on the New York Stock Exchange,” Peter Jackson, CEO of Flutter, said in a statement. “This closely follows the recent move of our operational headquarters to New York. We are in a fantastic position in the US, with FanDuel the clear number one operator, and we look forward to this next step in our journey.”

A leadership change

In conjunction with the move, the company announced that Paul Edgecliffe-Johnson, Flutter’s Chief Financial Officer, will leave the group with immediate effect. Edgecliffe-Johnson will be replaced by Rob Coldrake, who joined the company in 2020.

In light of his family commitments in Britain, Flutter’s board held discussions with Edgecliffe-Johnson prior to the listing change. Due to the extensive time requirements in the U.S., the board concluded that it would be in the best interests of the company for Edgecliffe-Johnson to step down from his role as group CFO, Flutter wrote in a regulatory filing.

Before the leadership change, Coldrake was CFO of Flutter International, a role he has held since joining the group four years ago. Coldrake previously worked for fourteen years at TUI Travel, a British travel company. The director started his career at PricewaterhouseCoopers, one of the largest accounting firms in the world.

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“The Board of Directors welcomes Rob’s appointment as Group CFO and is particularly pleased that we have been able to develop such a high-quality executive within our own company,” said John Bryant, Chairman of the Board of Flutter. “We look forward to working with him and the team in the future. I would also like to take this opportunity to wish Paul well and thank him for his contribution to the Group.”

Commenting on Coldrake’s appointment, Jackson added: “During his four years at Flutter, he has demonstrated himself to be a CFO of exceptional caliber, and his skills and experience will help us take advantage of the significant opportunities ahead .”

Flutter shareholders approved the listing change earlier this year, as about 98% of voting shareholders supported the move.

The move to a US primary listing will have global resonance, with London’s FTSE 100 expected to lose more than £22 billion ($28 billion) as a result of the change.

Flutter will continue to trade on the standard listing segment of the London Stock Exchange, the company wrote in a filing with the U.S. Securities and Exchange Commission (SEC). Flutter shares initially fell 6% in London before recovering on Friday to pare most of the losses.

In addition to the primary listing, Flutter’s next target could be an index inclusion in the S&P 500, JMP Securities analyst Jordan Bender wrote in an analyst note. Although the index does not currently have an online gaming company, Flutter meets “almost all the criteria” as a candidate for inclusion, according to JMP. The analyst cited Flutter’s profitability and global scale for potential inclusion.

Stock moves

In New YorkFlutter was trading around $191.50 during the Friday morning session, up about 2%.

Both Flutter and DesignKings suffered sharp losses earlier in the following week Illinois legislature passed a bill on progressive rate changes in the state’s sports betting tax structure.

Under the proposed change, the top tax rate will increase from a current flat rate of 15% to 40% of an operator’s adjusted gross sports betting revenue.

The amendments to HB 4951 in the Illinois House of Representatives set thresholds for annual revenues, with tranches ranging between 20% and 40%. Operators will be taxed at 20% for their first $30 million in adjusted gross revenue, with graduated steps for exceeding certain thresholds.

Operators will be taxed at 35% for revenues between $100 million and $200 million and 40% for all revenues above $200 million, the highest level.

A coalition for leading sportsbooks including FanDuel, DraftKings and BetMGMcriticized the decision, adding that it would push operators to reevaluate their “level of investment and participation in the state.”

The highest level is still below the 51% levied in New York, which along with New Hampshire is the highest level in the country. In the Empire State, FanDuel and DraftKings have maintained a “structural advantage” over smaller operators, who have been more reluctant to reinvest in their product, according to JMP.

“The graduated structure changes that equation where the top companies cannot structurally gain a strategic foothold in more stringent regulatory environments, creating a more level playing field when it comes to the tax environment,” Bender wrote.

Nevertheless, JMP maintained a “market outperform” rating on Flutter with a $246 price target. Potential index inclusion in the S&P 500, as well as improved liquidity levels, act as a catalyst for the stock, according to JMP. Flutter debuted on the NYSE in January at more than $200 per share.

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