Eminence Capital Feasts on Sports Betting Stocks, Dumps MGM

Although Ricky Sandler’s Eminence Capital is already a significant shareholder in Entain Plc (OTC: GMVHF), which possesses 50% of BetMGM, it increased its investment in sports betting stocks during the first quarter. 

A Form 13F submitted to the Securities and Exchange Commission (SEC) on Thursday reveals that the hedge fund began a position in Flutter Entertainment (NYSE: FLUT) during the first quarter, acquiring 155,024 shares of the parent company of FanDuel. Flutter was one of five new investments made by Eminence in the initial three months and the sole gaming stock in that group. 

The money manager almost increased its investment in DraftKings (NASDAQ: DKNG) to 5.1 million shares. DraftKings was one of the 13 positions Eminence increased in the first quarter and one of the two gaming stocks among them, the other being Red Rock Resorts (NASDAQ: RRR). 

With the new Flutter role and the investments in DraftKings and Entain, the hedge fund now has stakes in the three largest online sportsbook operators in the US — FanDuel, DraftKings, and BetMGM. 

Selling MGM Stake Might Prompt Inquiries 

Sandler had previously been a staunch opponent of Entain management, and he turned that dissatisfaction into a board position at the Coral owner last year. 

At that time, certain analysts suggested that Sandler’s joining Entain might pave the way for the company to sell some or all of its 50% stake in BetMGM, an action he had advocated for earlier. There may be curiosity regarding this transaction related to Eminence since, in the first quarter, the money manager sold off all of an earlier stake in MGM Resorts International (NYSE: MGM) — the 50/50 partner of Entain on BetMGM. 

Casino.org contacted Eminence for feedback, asking about possible effects stemming from the liquidation of its MGM investment in relation to Entain, but that inquiry had not been responded to at the time of this writing. 

The hedge fund sold its entire position in Wynn Resorts (NASDAQ: WYNN) during the first quarter. 

Additional Advantages Supporting Flutter 

The recent series of 13F filings confirms that the first quarter marked the latest period in which US professional investors increased or started positions in Flutter, supporting the Dublin-based firm’s choice to list its shares in New York in 2024. 

That transition took place in early 2024, and almost a year has passed since the gaming firm moved its main listing from London to New York. One reason the operators took those actions was to attract more interest from American institutional investors. 

The ongoing 13F filing season shows that Flutter made a smart decision to list in New York, as several money managers, such as Eminence, increased or initiated new positions in the stock during the first quarter of the year.