Flutter Purchases 5% Share of FanDuel Belonging to Boyd Gaming for $1.8 Billion, Valuing FanDuel at $31 Billion
In a significant move within the gaming industry, Fox Corporation holds an option to acquire an 18.6% stake in FanDuel, the US-based sports betting and online gaming company, by the end of 2030. This option arises from Fox's partnership with The Stars Group, which was later acquired by Flutter Entertainment in 2020, and formed Fox Bet.
Fox's potential acquisition of the stake is valued at around $4.5 billion according to the terms set in 2020, when FanDuel was valued at approximately $20 billion. However, recent valuations place FanDuel at around $31 billion to $35 billion, making the stake worth more, approximately $6.5 billion based on Goldman Sachs estimates.
Lachlan Murdoch, CEO of Fox Corporation, has confirmed the company's intention to exercise this option. Fox is currently working on obtaining the necessary regulatory approval for gaming licenses to facilitate the purchase. The option includes a financial incentive to buy sooner rather than later, with a 5% annual price escalator.
Meanwhile, Flutter Entertainment, the current majority owner of FanDuel, has agreed to buy out Boyd Gaming’s 5% stake for approximately $1.76 billion. This deal, expected to close in Q3 2025, does not affect Fox's option to purchase the 18.6% stake. The option remains valid and enforceable until December 2030.
The sale of Boyd Gaming's stake to Flutter will save the latter approximately $65 million annually due to lower market access rates. Flutter plans to use debt financing to fund the transaction, with the proceeds to be used for paying down existing debt, pursuing new opportunities, investing in existing properties, returning to shareholders, and maintaining a healthy financial footing.
This development underscores the dynamic nature of the gaming industry, with companies continuously restructuring to maximise their potential and seize opportunities. As Fox prepares for regulatory clearance, the future of FanDuel's ownership structure remains a topic of interest.
[1] Source: Goldman Sachs estimates [2] Source: Flutter Entertainment press release [3] Source: Fox Corporation press release [4] Source: Boyd Gaming press release
- Fox Corporation's potential acquisition of the 18.6% stake in FanDuel, valued at around $6.5 billion according to Goldman Sachs estimates, is fueled by the company's intention to leverage technology in the sports and finance sectors, as indicated by the 5% annual price escalator in the option.
- The planned acquisition by Flutter Entertainment of Boyd Gaming’s 5% stake in FanDuel for approximately $1.76 billion serves as a strategic move to optimize their finance and technology resources, enabling Flutter to pursue new opportunities and maintain a strong financial position.
