The latest merger between big gambling and big media became official Monday, foretelling a not-too-distant future of monolithic corporations and in-game wagering from home.
The deal makes FOX Bet and parent company Flutter Entertainment a 95% shareholder in New York-based FanDuel.
To complete the acquisition, Dublin-based Flutter will get a 37% additional stake in FanDuel from Fastball Holdings for almost $4.2 billion. The deal, set in motion last Thursday, is set for shareholders’ approval by the end of the month.
Fastball Holdings, a collaboration between Google Ventures, Comcast Ventures, KKR, Verizon Ventures, NBC Sports Group, and Shamrock, will hold 7% of Flutter once the transaction is complete. The rest of the buyout will be in cash (approx. $2 billion.)
Murdoch Family Quietly Grows Gambling Side of Empire
Flutter officials said the deal strengthens their position on FOX Bet, which Fastball got as part of Flutter’s 2019 merger with Canada’s Stars Group. The FanDuel buyout will also terminate Fastball’s economic relationship with FOX Bet.
“Maintaining our ownership stake signifies our long-term commitment to Flutter,” Lachlan Murdoch, Executive Chairman and CEO of the Fox Corporation, said in a statement.
Murdoch noted the deal should lead to more involvement by New York-based FOX Sports, owned and operated by the Fox Corporation. In the wake of the agreement, the Murdochs’ company has an option to buy an 18.5% stake of FanDuel in July 2021.
“FOX’s audiences have proven to be highly engaged with free to play and wagering content,” Murdoch said. “We are excited to offer them access to products from Flutter’s market-leading stable of U.S. brands.”
Flutter’s shares closed at $100.65 Monday, up nearly 17% from $89.35 last Wednesday just before the acquisition’s announcement.
Deal Has Vast Media-Gambling Implications
The deal’s history dates back to May 2018, when FanDuel first merged with Flutter Entertainment. At the time, the latter sought to expand the base to expand its U.S. sports betting business.
Founded in 2009 as a daily fantasy sports operator, FanDuel operates sportsbooks in a growing number of U.S. states, including top-five 2020 grossers New Jersey, Pennsylvania, and Indiana.
“Flutter’s initial acquisition of a controlling stake in FanDuel in 2018 has been transformational for the shape of the group,” Flutter CEO Peter Peter Jackson said in a release. “We look forward to continuing to grow our U.S. business, alongside our key media partner FOX, as further states move to regulate sports betting and gaming.”
Listed on the London Stock Exchange, Flutter was created in September 2015 after Ireland’s Paddy Power merged with British rival Betfair. The business is owned 52% by the former Paddy Power shareholders and 48% by the former Betfair shareholders.
Additional Fall Mergers Portend a Multinational, Cross-Branded Future
In September, Britain’s William Hill was bought by Caesars Entertainment for $3.9 billion, merging one of gambling’s biggest brick and mortar companies with an overseas sportsbook.
In November, regional U.S. news network juggernaut Sinclair entered an $85 million partnership with Bally’s to rebrand 190 broadcast stations, 21 regional sports networks, the Tennis Channel, its 24-hour sports network Stadium with the casino’s moniker.
The idea behind the Sinclair-Bally’s merger is to give “consumers of live sports a more dynamic and engaging sports viewing experience,” said Chris Ripley, President and CEO of Sinclair.