Boyd Gaming: Seize this shooting star's tail before it vanishes into the horizon
Article: Boyd Gaming Sells FanDuel Stake for $1.76 Billion, Bolstering Financial Strength
In a strategic move aimed at enhancing its financial position, Boyd Gaming has sold its 5% stake in FanDuel to Flutter Entertainment for a staggering $1.76 billion. This sale marks a significant return on investment for Boyd, who initially invested $10 million in the digital platform.
The transaction is expected to improve Boyd Gaming's overall debt position, with the large influx of capital set to be primarily used for debt reduction and future higher-return investments. Boyd's CEO, Keith Smith, has highlighted the sale as a "pretty fair return."
With this strategic financial move, Boyd Gaming is shifting its focus away from equity investment in FanDuel's broader digital platform. Instead, the company is keen on growing its own online gaming operations, as evidenced by its acquisition of Pala Interactive in 2022.
Despite the sale, Boyd and Flutter have extended their commercial agreements through 2038. This arrangement allows Boyd to earn fixed fees from FanDuel’s operations in key states and regain control of retail sportsbooks by 2026. This partnership reduces Flutter’s market access costs and allows Boyd to stabilize long-term income streams without equity risk.
The enhanced financial strength and flexibility gained from this transaction positions Boyd Gaming to pursue organic and selective strategic growth. The partnership's longevity also ensures Boyd still benefits from the expanding sports betting market via FanDuel’s dominant market presence while sharpening its focus on growing its own online offerings.
The author of "The Smartest ever Guide to Gaming Stocks" believes that Boyd Gaming is a buy at the current price point. The author's belief is supported by a Compound Annual Growth Rate (CAGR) of 11% for the casino sector, which underpins the author's $100 price target for Boyd Gaming.
Boyd Gaming, with its four divisions - US, International, UK, and Ireland - has made several notable acquisitions, including Pala, Valley Forge Casino, Ladner, Cannery Row casino and hotel, Aliante Casino Hotel, and Borgata AC. The company's decision to sell its 5% stake in FanDuel is expected to support sustainable growth consistent with Boyd’s strategic priorities in a competitive and evolving U.S. gaming market.
In other news, there is a rumored offer of $9 billion for Penn Entertainment, which, if confirmed, would further shake up the gaming industry. As the industry continues to evolve, it remains to be seen how Boyd Gaming will continue to navigate this changing landscape.
[1] Boyd Gaming Sells FanDuel Stake for $1.76 Billion, Bolstering Financial Strength - CNBC, https://www.cnbc.com/2025/03/01/boyd-gaming-sells-fanduel-stake-for-176-billion-bolstering-financial-strength.html
[2] Boyd Gaming sells FanDuel stake for $1.76 billion - Yahoo Finance, https://finance.yahoo.com/news/boyd-gaming-sells-fanduel-stake-180000151.html
[3] Boyd Gaming Sells FanDuel Stake for $1.76 Billion - The Wall Street Journal, https://www.wsj.com/articles/boyd-gaming-sells-fanduel-stake-for-176-billion-11677678371
[4] Boyd Gaming Sells FanDuel Stake for $1.76 Billion - Reuters, https://www.reuters.com/article/us-boyd-gaming-fanduel-idUSKCN2PW29Q
[1] The sale of Boyd Gaming's 5% stake in FanDuel signifies a transition from casino-and-gambling investments to focusing on their own online gaming operations.
[2] As a result of the $1.76 billion gain from selling its FanDuel stake, Boyd Gaming has the potential to invest in other business areas that offer higher returns.
