The chief executive officer of FanDuel Group is stepping down, throwing a wrench into a potential initial public offering of shares of the New York-based sports-betting company.
FanDuel’s parent company, Dublin-headquartered Flutter Entertainment Plc, announced the news on Wednesday, saying Matt King, FanDuel’s CEO, had given notice that he plans to leave the group after four years in the role. King will still stay with the company while a search for his replacement is conducted, Flutter said.
Flutter also noted that King’s departure will weigh on the possibility of listing a small percentage of FanDuel's shares on a stock exchange in the United States, which Flutter’s board of directors has been considering.
“Whilst Matt's departure will affect the timing of any potential U.S. listing, the Board will continue to keep this option under review,” Flutter stated in its press release.
During King’s time in charge, and in the wake of a landmark decision by the U.S. Supreme Court in 2018, FanDuel branched out from its daily fantasy roots to become one of the major players in the sports betting industry as well. According to Flutter, FanDuel also accounted for 91.6 percent of the US$396 million in revenue its U.S. business generated in the first quarter.
“With FanDuel well positioned for the next chapter of its growth and always an entrepreneur at heart, now is the time for me to take on new opportunities as the next step in my career,” King said in a statement in the Flutter press release.
Fox vs Flutter
In addition to FanDuel, Flutter owns Paddy Power, Betfair and PokerStars. However, King’s departure also comes as Flutter and Fox Corp. are butting heads over the latter’s option to buy an 18.6-percent ownership stake in FanDuel.
Fox said in April that it was suing Flutter to ensure it could buy its interest for the same price Flutter paid in December 2020, when Flutter bought an additional 37.2 percent of FanDuel for £3.34 billion, increasing its ownership to 95 percent. Fox's lawsuit was filed as an arbitration.
Flutter has said the option was granted to Fox “in order to achieve economic alignment” of third-party relationships of both Flutter and The Stars Group Inc. (TSG), which Flutter acquired in 2020. As a result of that merger, Flutter also became party to an agreement between TSG and Fox Sports regarding their FOXBet wagering partnership.
Flutter, however, said Fox’s position to buy its interest based on what was then a USD$11.2-billion valuation of FanDuel was wrong.
“It would represent a windfall to FOX compared to the fair market valuation as of July 2021, to which the parties had previously agreed,” Flutter said in a statement in April. “Flutter will not allow FOX's filing, which is without merit, to distract from its business and will vigorously defend its position in the arbitration.”
Flutter CEO Peter Jackson said during a conference call near the end of April that their position in the matter had not changed and that an arbitrator's appointment was nearly finalized. In a press release, Jackson also said the company is “continuing to consider our options” when it comes to a possible FanDuel IPO.
“No decision has been made at this time and we will update the market as appropriate,” he added.