Betting group Flutter proposes moving listing to New York

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Flutter, the gambling group that owns Paddy Power, is planning to quit the UK’s FTSE 100 index by moving its primary listing to New York, dealing another blow to London’s ailing equity market.

If approved by shareholders, Flutter’s transition to a US primary listing, away from the London Stock Exchange, could take place as soon as this year, the company said on Monday.

The Ireland-based gambling group said a primary US listing would offer “access to much deeper capital markets” as well as new investors across the Atlantic. The board plans to retain a secondary listing in the UK after the move but a primary listing is required for inclusion in the FTSE 100.

The announcement by Flutter — one of the FTSE’s top 20 companies with a valuation of about £29bn — is another setback for London’s stock market.

A number of companies have recently opted to ditch their existing UK listings in favour of rival exchanges such as New York and Frankfurt, citing a significant decrease in liquidity on UK equity markets over recent years and the potential for higher valuations in the US.

Miner BHP, building materials group CRH, packaging company Smurfit Kappa and plumbing supplier Ferguson are among the companies to have quit the FTSE 100 for primary listings in Australia or the US. British chip designer Arm floated in New York last year, resisting lobbying to choose London.

UK pollster YouGov and Europe’s largest tour operator Tui are also considering cancelling their London listings.

UK ministers are attempting to shore up the London market through a series of regulatory reforms and measures to encourage pension funds to invest in high-growth private companies, which may eventually list on the stock market.

The government is also preparing a potential retail offer of shares in NatWest, the bank in which it still owns a stake of more than one-third after bailing it out in the 2008 financial crisis.

Flutter announced the plan to shift its primary trading venue as its company’s ordinary shares debuted in a new secondary listing on the New York Stock Exchange on Monday, while its secondary Dublin listing has been cancelled. Its shares fell 1.4 per cent immediately after the announcement, ending down 0.9 per cent.

“We believe a US primary listing is the natural home for Flutter,” said chief executive Peter Jackson, noting that it expected to earn most of its profits in the US in the near future.

The company, which also owns the Sportsbet brand, has been considering a primary US listing since last February and said the idea had received “very supportive” feedback from its investors and shareholders.

Unaudited revenue for its US sports and gaming book rose by 26 per cent to £1.14bn in the final quarter of 2023, compared with the same period a year earlier. This is considerably higher than the £647mn revenue generated in the UK and Ireland.

Gambling companies have been spending large sums on marketing in the US in the hope of capitalising on the country’s online gambling boom, ever since a federal ban on the sports betting was lifted by the Supreme Court in 2018.

Flutter’s US business FanDuel has a 43 per cent gross revenue share of the sports-betting market in the country, rivalling fantasy sports and online gambling giant DraftKings.

At the same time Flutter, along with competitors such as 888, has been hit with heavier regulation in the UK and Ireland as governments seek to tackle problem gambling.