Playing With Fire, Flutter Gets Burned By Fox Option In Q1

Like his “Lord of The Rings” movie director namesake, Flutter CEO Peter Jackson has built quite an entertainment franchise; but also, like many a putative successful businessman before him, he may very well end up getting burned–if not eaten alive–by that corporate Fox, aka Rupert Murdoch.

In so many ways Flutter Entertainment plc is flying high: Posting group revenues of US$3.4 billion (£2.7bn) in Q1, up 16 percent year-on-year; increasing its average monthly players to 13.7 million; dominating US iGaming and sports betting through its FanDuel vertical; moving its primary stock market action to the world-leading NYSE at the start of this month.

But there’s a blip on the horizon, a bone in the throat, a potential conflagration looming. It’s called, somewhat euphemistically: “The Fox Option”.

And–based on prior economic history–it could end with the fearsome Murdoch, lord of the Fox media empire, intercepting Jackson’s spectacular trajectory and grabbing Flutter’s riches for himself.

Despite the impressive revenues, a 46 percent surge in Adjusted EBITDA to US$514 million (£409.28m), for example, compared to Q1 2023; and other financial indicators, et al; Irish-origin Flutter–thanks to a “substantial change in the fair value” of the aforementioned Fox Option–posted a net loss of -US$177 million (-£140.94m) in the financial quarter, ending March 31 – US$66 million (£52.55m) more than in Q1 2023.

Flutter began its fiscal tryst with Fox with its acquisition of the Murdoch-owned Stars Group in May 2020.


The disentanglement, like many a break-up, has been complex, if not messy.

In August last year FOX Bet, a direct competitor of FanDuel, was closed, while Flutter retained ownership of PokerStars’ US operations.

But FOX continues to hold a 2.5 percent stake in Flutter and, crucially, an Option-–“The Fox Option”–to acquire 18.6 percent of FanDuel.

For the moment, FanDuel remains the outstanding performer on the still-potent, ever-evolving, US sportsbook and iGaming scene. Indicatively, it holds 46 percent of sportsbook GGR and 27 percent of iGaming GGR in The States.

And this Q1 FanDuel generated positive EBITDA of US$26 million (£20.7m), compared to the negative -US$53 million (-£42.2m) posted in the first quarter of last year.

“We have had an excellent start to the year,” affirmed Flutter CEO Jackson.

“In the US, FanDuel’s top line momentum is translating into strong growth in US Adjusted EBITDA and market share gains.

“We are focused on continuing to expand our player base, market share, and embedding future profits within our business through disciplined investment.”

Paper Loss

Notwithstanding the first quarter paper loss, the Flutter Board has maintained its positive 2024 guidance. It now expects increased US revenues of at least 30 percent, up to US$6.2 billion (£4.93bn). And it calculates an Adjusted EBITDA of between US$635 million to US$785 million (£505.63m-£625.07m).

Meantime, Flutter’s ex-US Q1 results delivered revenue of US$1.98 billion (£1.57bn), up eight percent year-on-year. Adjusted EBITDA, also non-US, grew by 20 percent to US$488 million (£388.58m), compared to Q1 2023.

The Group is now predicting non-US Full Year revenue of some US$7.65 billion to US$8.05 billion (£6.09bn-£6.4bn), up 6.3 percent; with Adjusted EBITDA of US$1.63 billion to US$$1.83 billion (£1.29bn-£1.45bn), an estimated 5.4 percent increase compared to 2023.

Flutter’s Irish and UK brands, led by Paddy Power, enjoyed revenues of US$861 million (£685.59m) and Adjusted EBITDA of US$268 million (£213.4m) in Q1, up 12 percent and 24 percent, respectively, year-on-year.

Concluded Jackson: “Outside of the US, our focus on delivering the best products for our players is driving good momentum in key markets such as the UK, where the launch of Super Sub on Paddy Power has been our most successful product launch to date, and in Italy, where we have been taking online sports betting and iGaming market share during Q1 and reached an all-time record in April.”

Everywhere–in Georgia and Armenia, in Spain, Brazil and Turkey–Jackson has undoubtedly got all his ducks in a row.

But, to mix our metaphors, while he may have all of Flutter’s chickens, for the moment, safely housed in the Flutter coop, outside lurks the Murdoch Fox; licking his chops and swishing his tail at the prospect of the bursting iGaming feast on offer.

Watch this space.

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