Investment Firm Eminence Capital Buys into Sports Betting Stocks, Drops MGM Holdings from Portfolio
Last updated on: May 16, 2025, 03:51h.
Todd Shriber @etfgodfather
Financial | Gaming Business | Mergers and Acquisitions
In a significant move, Ricky Sandler's Eminence Capital, a renowned hedge fund, has boosted its exposure to sports wagering stocks during the first quarter.
New Positions and Existing Stakes
A 13F filing with the Securities and Exchange Commission (SEC) on Thursday reveals that Eminence initiated a position in Flutter Entertainment (NYSE: FLUT), the parent company of FanDuel, and nearly tripled its stake in DraftKings (NASDAQ: DKNG). These moves suggest a strategic investment in the thriving sports betting sector.
Furthermore, Flutter was one of five new positions taken by Eminence in the first quarter, making it the only gaming stock among that quintet.
With these new positions and the existing stake in Entain Plc (OTC: GMVHF), which owns half of BetMGM, Eminence now holds significant exposure to the three largest US online sportsbook operators: FanDuel, DraftKings, and BetMGM.
Divestment from Traditional Casinos
The hedge fund's investment decisions also show a shift away from traditional casino operators. Eminence liquidated all of its Wynn Resorts (NASDAQ: WYNN) position in the first quarter, having also divested entirely from MGM Resorts International (NYSE: MGM) – Entain's 50/50 partner on BetMGM.
This move could suggest a preference for agile and growth-oriented companies in the online sports betting space with a leaner operational structure, such as Flutter and DraftKings.
Implications for Each Operator
Flutter Entertainment (FanDuel)
Eminence's new position in Flutter Entertainment signifies a vote of confidence in the company's international acquisitions like Snai and NSX, which have bolstered its global reach. This strategic investment could boost FanDuel’s market visibility and potentially increase its competitiveness.
DraftKings
The increased stake in DraftKings demonstrates Eminence's belief in the company's ability to expand its market share. This investment could provide DraftKings with greater financial flexibility and a competitive edge in the U.S. sports betting market.
BetMGM (Joint Venture of Entain and MGM Resorts)
Eminence's decision to liquidate its MGM Resorts International investment might signal a reduced focus on traditional casino operators. However, the continued investment in Entain suggests Eminence believes in BetMGM's potential, although it may indicate less confidence in MGM's broader operational strategies.
Market Consolidation and Competition
These moves by Eminence Capital could accelerate market consolidation and competition among the top players in the online sports betting sector, as investors seek exposure to companies with strong digital capabilities and global reach.
In summary, Eminence Capital's investments in Flutter Entertainment and DraftKings, while divesting MGM Resorts International, suggest a strategic bet on the growth potential of online sports betting operators with global reach and effective digital strategies.
[1] Data and insights courtesy of GlobalData, a leading provider of data, analytics, and insights on the gaming industry.
[4] Flutter's acquisition of Snai allowed the company to enter the Italian market more effectively and broaden its global presence (GlobalData, 2023)
- Eminence Capital's strategic investment in sports betting stocks, as shown by their increased stake in DraftKings and new position in Flutter Entertainment, indicates a shift from traditional finance to sports betting as an avenue for financial growth and diversification in their portfolio.
- The hedge fund's divestment from traditional casino operators like Wynn Resorts and MGM Resorts International, combined with their continued investment in the online sports betting sector, signals a preference for investing in agile and growth-oriented companies that specialize in digital sports betting services, such as Flutter and DraftKings.
