Short sellers rake in profits on bets against the gambling sector
The Financial Times reports that hedge funds have made millions by
UK.- The Financial Times has reported that hedge funds have made at least $2.3bn (€1.96bn) this year by betting against publicly listed online gambling firms. With the stock price of Flutter Entertainment down by 55 per cent and DraftKings and Entain both down by 30 per cent in the year to date, sellers shorting the stocks have made profits of around $2bn, $351m and $35m, the newspaper says.
The downturn on the markets has extended to smaller operators, with Stockholm‑listed Betsson also down by a third this year and the Malta-based affiliate company Raketech down nearly 10 per cent. Paris‑listed FDJ United, owner of Unibet, is down by only 1 per cent in the year to date but by almost 9 per cent in the past month following its Q1 results.
Some listed operators have bucked the trend. Playtech, Evolution AB and Rank Group have held firm while Evoke Plc, the former 888 holdings, is up 56 per cent in the year to date, although still down by 37.5 per cent year-on-year amid a takeover offer at 50p‑per‑share from Bally’s Intralot.
Amid regulatory headwinds and increases in gambling taxes in Europe along with the challenge posed by the rise of prediction platforms, major gambling stocks could continue to face pressure.
JP Morgan Chase recently trimmed its holding in Entain to under 3 per cent only 10 days after upping its position to 7 per cent. On the other hand, the Canadian Imperial Bank of Commerce has declared a 5.3 per cent stake in FanFuel owner Flutter, while BlackRock has increased its stake to over 5 per cent and Kenneth Dart, the largest private shareholder, had expanded his control to 27 per cent.
