Information on the Target

Flutter Entertainment (NYSE: FLUT; LSE: FLTR) is recognized as the world's leading online sports betting and iGaming operator. On July 10, 2025, Flutter announced a significant milestone in its growth strategy by extending its long-term strategic partnership with Boyd Gaming Corporation until 2038. As part of this agreement, Flutter will acquire Boyd's 5% stake in FanDuel Group, further consolidating its position in the competitive U.S. sports betting market.

The acquisition entails a payment of approximately $1.755 billion, which will elevate Flutter's stake in FanDuel to 100%. FanDuel holds a prominent position in the U.S. gaming landscape, commanding a robust 43% market share in sports betting and 27% in iGaming. This acquisition allows Flutter to solidify its domain as the number one player in the U.S. market, driven by unique competitive advantages.

Industry Overview in the U.S.

The online sports betting and iGaming industry in the United States has experienced rapid growth in recent years, driven by legislative changes and increased acceptance of gambling. In 2018, the Supreme Court's decision to strike down PASPA opened avenues for states to legislate sports betting, leading to widespread adoption across the nation. In states where it is permitted, operators have witnessed exponential increases in user engagement and revenue.

The U.S. gaming market is currently valued at approximately $31 billion, with estimates projecting this figure to continue rising as more states legalize and regulate sports betting and online casino games. Major operators like Flutter, DraftKings, and Caesars are competing fiercely for market share, leveraging technology, marketing strategies, and partnerships to expand their customer bases.

Flutter's FanDuel Group is especially well-positioned due to its established brand presence, innovative product offerings, and access to lucrative markets through strategic alliances. The company's ability to adapt and respond to consumer trends, alongside its strong investment in technology, has contributed significantly to its leading status in the industry.

As competition heats up and regulatory frameworks evolve, operators in the U.S. are required to navigate a complex landscape while ensuring compliance with state-specific regulations. This dynamic environment presents opportunities for both growth and challenges, necessitating robust business strategies and partnerships.

The Rationale Behind the Deal

The acquisition of Boyd's 5% stake in FanDuel serves multiple strategic objectives for Flutter. First and foremost, it provides Flutter with complete ownership of a prime asset in the rapidly expanding U.S. sports betting sector. FanDuel's industry-leading market shares in both sports betting and iGaming present significant opportunities for revenue generation, and this acquisition validates Flutter's commitment to capturing long-term profitability in the U.S. market.

Additionally, the agreement to revise commercial terms with Boyd will lead to reduced market access costs, allowing Flutter to save approximately $65 million annually starting July 1, 2025. This cost reduction strengthens Flutter's operational efficiency and demonstrates its ability to enhance margins amid an evolving regulatory landscape.

Information About the Investor

Flutter Entertainment is a global gaming leader, with a portfolio that includes notable brands such as Betfair, PokerStars, and Paddy Power. The company has made significant investments in technology and market expansion, exemplified by its acquisitions in the U.S. market. With a strong commitment to responsible gambling and customer-centric practices, Flutter has established itself as a trusted operator, ensuring compliance with regulations while pursuing growth opportunities.

Peter Jackson, CEO of Flutter, highlighted the transformative nature of their initial acquisition of FanDuel in 2018. Under his leadership, Flutter has successfully positioned itself as the leading player in the U.S. online sports betting and iGaming market, creating substantial value for shareholders through strategic acquisitions and partnerships.

View of Dealert

From an investment perspective, Flutter's acquisition of Boyd's stake in FanDuel appears to be a strategic move poised for success. With this deal, Flutter not only secures complete ownership of an industry leader but also reduces operational costs significantly, enhancing overall profitability. Given FanDuel's strong market position and Flutter’s proven track record, this transaction can be viewed as a decisive step towards establishing dominance in the burgeoning U.S. gaming market.

The projected savings and increased operational efficiencies further validate the attractiveness of this agreement. The ability to leverage enhanced market access conditions will likely strengthen Flutter's financial outlook and bolster its competitive advantages over rivals, which is crucial in an increasingly crowded market.

However, while the initial outlook is positive, it is essential to consider potential risks such as regulatory changes and evolving consumer behaviors. Flutter's management will need to remain vigilant and adaptive to these dynamics to fully realize the benefits of this acquisition.

Overall, this acquisition can be viewed as a robust investment opportunity, aligning with Flutter’s long-term growth strategy and commitment to maximizing shareholder value through strategic market actions.

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