United States
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GAN who is the platform provider for FanDuel and DraftKings have enjoyed strong IPO’s in the United States in the last few weeks. Financial analysts believe that the IPO success of these gambling firms will spur other gambling firms to follow in their footsteps.
Financial analysts believe that the next two firms who could launch a U.S. IPO could be William Hill and Kambi. Both operators already maintain a presence in the U.S market and their share value in London and Stockholm could be undervalued, pushing them into a U.S. listing.
GAN and DraftKings have seen their public listings rise over the past weeks, due to frenzied activity by US investors, many of whom expect a surge in online gambling once the COVID-19 pandemic abates enough for mainstream sports to resume.
The $7 billion market cap for DraftKings is now more than double their initial projections of $3.3 billion, with shares trading at almost $24 last week. Shares of GAN, which recently moved its listing to the Nasdaq from London, are now trading at nearly $14 each, around double their IPO projections of $6.50 to $8.50.
The lofty projections of both DraftKings and GAN have both been surpassed by the appetite of US investors, which may induce similar firms to make the same leap. However, Dermot Smurfit, CEO of GAN, noted that the hurdles set by the Securities and Exchange Commission (SEC) made this move difficult.
Hurdles Faced by Kambi and William Hill
According to Symmetry Invest’s CEO Andreas Aaen, Kambi’s revenue is gradually growing in the U.S market. Aaen believes that Kambi’s shares would benefit from being listed in the US, estimating its shares’ trading value at around SEK500, based on the valuations of GAN and DraftKings.
However, Kambi’s potential public listing in the US may be hindered by its reliance on its European businesses. Kambi derives just 37% of its revenues from the US. For their part, Kambi has maintained that an IPO in the US is not a high priority in the meantime.
William Hill may also benefit from listing itself on the US market. However, its US business is bundled with its other businesses, primarily in Europe.
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One potential method for William Hill to take advantage is to divest a chunk of its equity stake in William Hill US, which would allow the operator to list itself in the US market. Divesting part of their stake would also prevent their shareholders from stopping the move due to concerns about share dilution. Selling to a private equity company could also be considered.
