Eminence Capital Feasts on Sports Betting Stocks, Dumps MGM

Ricky Sandler’s Eminence Capital increased its stake in sports betting stocks during the first quarter, despite already being a major shareholder of Entain Plc (OTC: GMVHF), which owns 50% of BetMGM. 

A Form 13F submitted to the Securities and Exchange Commission (SEC) on Thursday reveals that the hedge fund started a stake in Flutter Entertainment (NYSE: FLUT) in the first quarter, purchasing 155,024 shares of the parent company of FanDuel. Flutter was one of five new assets acquired by Eminence in the initial quarter, being the sole gaming stock within that group. 

The money manager almost tripled its investment in DraftKings (NASDAQ: DKNG) to 5.1 million shares. In the first quarter, Eminence increased its holdings in DraftKings among 13 positions added, making it one of two gaming stocks in that group, with Red Rock Resorts (NASDAQ: RRR) being the other. 

By acquiring the new Flutter role and stakes in DraftKings and Entain, the hedge fund has now invested in the three biggest online sportsbook operators in the US — FanDuel, DraftKings, and BetMGM. 

Selling MGM Stake Might Prompt Inquiries 

Sandler had been an outspoken critic of Entain management for quite some time, and he turned that frustration into a board seat at the Coral parent company last year. 

During that period, certain analysts suggested that Sandler's involvement with Entain might pave the way for the firm to sell off a portion or its entire 50% share in BetMGM, an action he had advocated for earlier. There may be curiosity regarding this transaction concerning Eminence since, in the first quarter, the money manager sold off all of its previously held stake in MGM Resorts International (NYSE: MGM) — Entain’s 50/50 partner in BetMGM. 

Casino.org contacted Eminence for a statement regarding the possible effects of selling its MGM investment on Entain, but no response had been received at the time of this writing. 

The hedge fund completely divested its Wynn Resorts (NASDAQ: WYNN) stake during the first quarter. 

Additional Support for Flutter 

The recent series of 13F filings has confirmed that professional investors in the US increased or started new positions in Flutter during the first quarter, supporting the Dublin-based company's choice to list its shares in New York in 2024. 

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

The ongoing 13F filing season shows that Flutter made a smart choice to go public in New York, as several money managers, including Eminence, have either increased or initiated new holdings in the stock during the year's first quarter.