Allwyn, a prominent lottery operator, is evaluating its options for a secondary stock market listing, with London and New York emerging as potential venues. This decision, as stated by Chief Financial Officer Kenneth Morton, comes in the wake of the company’s first-quarter financial results, which highlighted significant business operations in both Europe, particularly the UK, and the US. The timing and place of this listing are crucial as they could offer increased market liquidity and attract a broader range of investors and analysts, thus benefiting shareholders.
The secondary listing plan was initially announced in conjunction with Allwyn’s €16 billion merger with Greek lottery operator OPAP, finalized earlier this year following robust shareholder support. The merger’s completion was a complex transaction, and now the secondary listing is the subsequent strategic step for Allwyn. The primary advantage of such a listing would be amplified market liquidity and potentially enhanced investor interest, with New York and London being the frontrunners due to their substantial financial markets.
In the first quarter of this year, Allwyn reported an 8% increase in total revenue, reaching €2.39 billion, while net revenue surged by 21% year-on-year to €1.2 billion. Following the merger, Allwyn assumed OPAP’s listing on the Athens Stock Exchange, maintaining the share price at approximately €13.86. Allwyn CEO Robert Chvátal assured investors that their listing in Athens would not involve the issuance of new equity, and the public stock availability would remain stable.
Industry analysts suggest that this dual listing could facilitate Allwyn’s future mergers and acquisitions. Paul Richardson from Partis Solutions indicated a potential six to nine-month timeframe for a US listing, contingent on Allwyn demonstrating that its business operations deliver the anticipated benefits before proceeding with an international public offering. This patience and clarity in strategic execution are crucial for a successful listing.
Meanwhile, the financial landscape in London has been undergoing significant changes, as demonstrated by Flutter Entertainment’s recent decision to close its secondary listing on the London Stock Exchange (LSE). This move, announced on June 12, followed an extensive review of Flutter’s listing strategy, initially reported in their Q1 results. The decision was driven by persistently low trading volumes and the increasing costs and complexities of maintaining a dual listing. The LSE has been experiencing a decline, with 88 companies delisting or moving their primary listings elsewhere in 2024. London slipped to 20th in global IPO rankings that year, recording only 18 company listings.
Companies often regard US exchanges as more attractive due to deeper capital pools and improved liquidity. These factors may influence Allwyn’s decision as it considers its secondary listing options.
In the broader regulatory context, Allwyn’s focus on its lottery operations provides some insulation from the tax hikes impacting European iGaming and sports betting operators. Morton highlighted a €14 million impact from Austrian tax increases but noted that the lottery sector generally enjoys more stable taxation due to the complexities involved in altering statutory tax arrangements. Additionally, regulatory trends in several markets appear to favor incumbents like Allwyn, as governments increasingly crackdown on illegal gambling activities, potentially narrowing the market share of unlicensed operators.
The next steps for Allwyn involve finalizing its decision on the secondary listing location, considering the evolving regulatory and market conditions in both the UK and the US. This decision, expected in the coming months, will be pivotal for Allwyn’s strategic growth and its ability to leverage global capital markets effectively.
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